**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-Q/A**





**Amendment
      No. 1**





(MARK
      ONE)





x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE QUARTERLY PERIOD ENDED March 31,
                2008.




o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934
              FOR
                THE TRANSITION PERIOD FROM ________ TO
                __________





COMMISSION
      FILE NUMBER: 0-52549





**RINO
      International Corporation**


(EXACT
      NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)





**NEVADA**
            
            **41-1508112**(STATE
                OR OTHER JURISDICTION OF
            
            (I.R.S.
                EMPLOYER IDENTIFICATION NO.)INCORPORATION
                OR ORGANIZATION




**11
      Youquan Road, Zhanqian Street, Jinzhou District**


**Dalian,
      People’s Republic of China 116100**


(ADDRESS
      OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)





REGISTRANT’S
      TELEPHONE NUMBER, INCLUDING AREA CODE: **+86-411-87661222**


_______________





Indicate
      by check mark whether the Registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the Registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes x 
      No o .





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.









Large Accelerated Filer o Accelerated
      Filer o


Non-Accelerated Filer x Smaller Reporting Company o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act.) Yes o No x




The
      number of shares of Common Stock of the Registrant, par value $.0001 per share,
      outstanding on May 11, 2008, was 25,000,000.





**Explanatory
      Note**





This
      Quarterly Report on Form 10-Q/A, Amendment No. 1 (“Amendment No. 1”) is being
      filed by the registrant solely to amend Part I, Item 1 (Financial Statements)
      and Item 2 (Management’s Discussion and Analysis of Financial Condition and
      Results of Operations) and Part II, Item 6 (Exhibits) contained in the Quarterly
      Report on Form 10-Q which was filed with the Securities and Exchange Commission
      on May 15, 2008 (the “Original 10-Q”).





Subsequent
      to the filing of the Original 10-Q, management of the registrant determined
      that
      there were errors in the financial statements filed with Original 10-Q causing
      redeemable common stock to be presented as permanent equity. The restatement
      had
      no effect on the income statement, including net income and earnings per share.
      This Amendment No. 1 is being filed to restate the financial statements and
      footnotes thereto, to revise the Management’s Discussion and Analysis of Results
      of Operations as a result of the restatement of the financial statements and
      to
      file as exhibits and include in the list of exhibits new certifications of
      the
      principal executive officer and principal financial officer of the Company.
      All
      of the Items which have been amended are being restated in their
      entirety.





Except
      as
      described in the above, no other provisions of the Quarterly Report on Form
      10-Q
      are being amended.





1


Part
      I





Item
      1.
      Financial Statements





**INDEX
      TO FINANCIAL STATEMENTS**





Consolidated
                Financial Statements of RINO International Corporation for the Three
                Months ended March 31, 2008 and 2007i.
            Consolidated
                Balance Sheets as of March 31, 2008 (unaudited) and December 31,
                2007
            F-1ii.
            Consolidated
                Statements of Income and Other Comprehensive Income for the three
                months
                ended March 31, 2008 and 2007 (unaudited)
            F-2iii.
            Consolidated
                Statements of Common Stock and Other Stockholders’ Equity for the Three
                Months Ended March 31, 2008 (unaudited)
            F-3iv
            Consolidated
                Statements of Cash Flows for the three months ended March 31, 2008
                and
                2007 (unaudited)
            F-4v.
            Notes
                to the Consolidated Financial Statements (unaudited)
            F-5
                - F-25










RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES
 (FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)
 CONSOLIDATED
        BALANCE SHEETS
 AS
        OF
        MARCH 31, 2008 AND DECEMBER 31, 2007
 March 31, 2008
                
                December 31, 2007(Unaudited)
                  (Restated)
                
                (Restated)ASSETSCURRENT
                    ASSETSCash
                    and cash equivalents
                
                $
                6,147,346
                
                $
                7,390,631Restricted
                    cash
                
                
                4,991,412
                
                
                1,000,000Accounts
                    receivable
                
                
                25,271,971
                
                
                20,840,336Notes
                    receivable
                
                
                952,087
                
                
                202,670Costs
                    and estimated earnings in excess of billings
                
                
                1,049,322
                
                
                2,818,122Inventories
                
                
                244,323
                
                
                178,480Advances
                    for inventory purchase
                
                
                14,754,199
                
                
                12,092,202Other
                    current assets and prepaid expenses
                
                
                1,685,924
                
                
                1,174,464Total
                    current assets
                
                
                55,096,584
                
                
                45,696,905PROPERTY
                    AND EQUIPMENT, NET
                
                
                11,426,247
                
                
                11,000,581OTHER
                    ASSETSPrepaid
                    expenses (non-current)
                
                
                89,250
                
                
                95,706Advances
                    for equipment and construction material purchase
                
                
                6,219,083
                
                
                3,751,343Intangible
                    assets, net
                
                
                1,674,283
                
                
                1,618,590Total
                    other assets
                
                
                7,982,616
                
                
                5,465,639Total
                    assets
                
                $
                74,505,447
                
                $
                62,163,125LIABILITIES
                    AND SHAREHOLDERS' EQUITYCURRENT
                    LIABILITIESAccounts
                    payable
                
                $
                2,160,540
                
                $
                2,534,858Liquidated
                    damages payable
                
                
                1,500,000
                
                
                1,000,000Other
                    payables and accrued liabilities
                
                
                830,810
                
                
                802,245Notes
                    payable
                
                
                2,392,052
                
                
                -Sales
                    commission payable
                
                
                786,561
                
                
                -Due
                    to a stockholder
                
                
                79,753
                
                
                106,963Other
                    taxes payable
                
                
                (56,465
                )
                
                581,444Income
                    tax payable
                
                
                1,233,524
                
                
                5,970,794Value
                    added tax payable
                
                
                2,937,899
                
                
                2,989,365Short-term
                    loan
                
                
                7,140,000
                
                
                -Total
                    current liabilities
                
                
                19,004,674
                
                
                13,985,669REDEEMABLE
                        COMMON STOCK ($0.0001 par value, 5,464,357 shares issued
                        with conditions
                        for redemption outside the control of the
                        company)
                
                
                24,480,319
                
                
                24,480,319COMMITMENTS
                    AND CONTINGENCIES
                
                
                -
                
                
                -COMMON
                    STOCK AND OTHER STOCKHOLDERS' EQUITYPreferred
                    Stock ($0.0001 par value, 50,000,000 shares authorized, none
                    issued and
                    outstanding)
                
                
                -
                
                
                -Common
                    Stock ($0.0001 par value, 10,000,000,000 shares authorized, 25,000,000
                    shares issued and outstanding including 5,464,357 redeemable
                    shares as of
                    March 31, 2008 and December 31, 2007)
                
                
                2,500
                
                
                2,500Additional
                    paid-in capital
                
                
                8,261,729
                
                
                8,221,663Retained
                    earnings
                
                
                15,841,263
                
                
                11,376,163Statutory
                    reserves
                
                
                2,664,785
                
                
                2,109,539Accumulated
                    other comprehensive income
                
                
                4,250,177
                
                
                1,987,272Total
                    common stock and other stockholders' equity
                
                
                31,020,454
                
                
                23,697,137Total
                    liabilities and shareholders' equity
                
                $
                74,505,447
                
                $
                62,163,125
 
 The
        accompanying notes are an integral part of these statements.
  F-1
 
 RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES
 (FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)
 CONSOLIDATED
        STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
 FOR
        THE
        THREE MONTHS ENDED MARCH 31, 2008 AND 2007
 (UNAUDITED)
 2008
                
                2007REVENUES:Contracts
                
                $
                16,297,745
                
                $
                5,536,867Services
                
                
                2,747,680
                
                
                4,253,45419,045,425
                
                
                9,790,321COST
                    OF SALESCost
                    of contracts
                
                
                10,262,689
                
                
                3,373,786Cost
                    of services
                
                
                902,394
                
                
                1,396,920Depreciation
                
                
                157,775
                
                
                120,48411,322,858
                
                
                4,891,190GROSS
                    PROFIT
                
                
                7,722,567
                
                
                4,899,131OPERATING
                    EXPENSESSelling,
                    general and administrative expenses
                
                
                2,145,491
                
                
                1,297,348Depreciation
                
                
                32,605
                
                
                26,526Amortization
                
                
                15,914
                
                
                11,464Research
                    and development
                
                
                10,483
                
                
                -TOTAL
                    OPERATING EXPENSES
                
                
                2,204,493
                
                
                1,335,338INCOME
                    FROM OPERATIONS
                
                
                5,518,074
                
                
                3,563,793OTHER
                    INCOME (EXPENSE), NETOther
                    income
                
                
                73,377
                
                
                -Interest
                    income
                
                
                21,926
                
                
                1,643Interest
                    expenses
                
                
                (78,704
                )
                
                (153,857
                )Liquidated
                    damage expense
                
                
                (500,000
                )
                
                -Other
                    expenses
                
                
                (14,327
                )
                
                (2,623
                )TOTAL
                    OTHER EXPENSES
                
                
                (497,728
                )
                
                (154,837
                )INCOME
                    BEFORE PROVISION FOR INCOME TAXES
                
                
                5,020,346
                
                
                3,408,956PROVISION
                    FOR INCOME TAXES
                
                
                -
                
                
                -NET
                    INCOME
                
                
                5,020,346
                
                
                3,408,956OTHER
                    COMPREHENSIVE INCOME:Foreign
                    currency translation adjustment
                
                
                2,262,905
                
                
                (364,264
                )COMPREHENSIVE
                    INCOME
                
                $
                7,283,251
                
                $
                3,044,692WEIGHTED
                    AVERAGE NUMBER OF SHARES:Basic
                
                
                25,000,000
                
                
                17,899,643Diluted
                
                
                25,161,062
                
                
                17,899,643EARNINGS
                    PER SHARE:Basic
                
                $
                0.20
                
                $
                0.19Diluted
                
                $
                0.20
                
                $
                0.19
 
 The
        accompanying notes are an integral part of these statements.
  F-2
  RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES
 (FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)
 CONSOLIDATED
        STATEMENTS OF COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY
        (RESTATED)
 FOR
        THE
        THREE MONTHS ENDED MARCH 31, 2008
 (UNAUDITED)
 
 Common StockPar Value $0.0001
              
              Additional
              
              Retained Earnings
              
              Accumulated otherNumber
              
              Common
              
              Paid-in
              
              Statutory
              
              Unrestricted
              
              comprehensiveof shares
              
              stock
              
              capital
              
              reserve
              
              earnings
              
              income
              
              TotalsBALANCE, December 31,
                  2007
              
              
              25,000,000
              
              $
              2,500
              
              $
              8,221,663
              
              $
              2,109,539
              
              $
              11,376,163
              
              $
              1,987,272
              
              $
              23,697,137Stock
                  compensation expenese-options issued
              
              
              
              
              
              
              
              
              38,204
              
              
              
              
              
              
              
              
              
              
              
              38,204Imputed
                  interest on advances from a shareholder
              
              
              
              
              
              
              
              
              1,862
              
              
              
              
              
              
              
              
              
              
              
              1,862Net
                  income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              5,020,346
              
              
              
              
              
              5,020,346Allocation
                  to statutory reserve
              
              
              
              
              
              
              
              
              
              
              
              555,246
              
              
              (555,246
              )
              
              
              
              
              -Foreign
                  currency translation gain
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,262,905
              
              
              2,262,905BALANCE,
                  March 31, 2008 (Unaudited)
              
              
              25,000,000
              
              $
              2,500
              
              $
              8,261,729
              
              $
              2,664,785
              
              $
              15,841,263
              
              $
              4,250,177
              
              $
              31,020,454
 
 The
        accompanying notes are an integral part of these statements.
  F-3
  RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES
 (FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 FOR
        THE
        THREE MONTHS ENDED MARCH 31, 2008 AND 2007
 (UNAUDITED)
 2008
                
                2007**CASH
                    FLOWS FROM OPERATING ACTIVITIES**Net
                    income
                
                $
                5,020,346
                
                $
                3,408,956Adjusted
                    to reconcile net income to cash provided by operating
                    activities:Depreciation
                
                
                190,379
                
                
                155,689Amortization
                
                
                15,914
                
                
                11,998Imputed
                    interest
                
                
                1,862
                
                
                18,271Amortization
                    of long term prepaid expense
                
                
                10,483
                
                
                -Accrued
                    liquidated damages
                
                
                500,000
                
                
                -Changes
                    in operating assets and liabilitiesAccounts
                    receivable
                
                
                (3,430,834
                )
                
                3,985,692Notes
                    receivable
                
                
                (724,697
                )
                
                (190,704
                )Contract
                    in process
                
                
                1,853,886
                
                
                (7,631,873
                )Inventories
                
                
                (56,679
                )
                
                (17,003
                )Other
                    receivables and prepaid expenses
                
                
                550,260
                
                
                (340,565
                )Advances
                    for inventory purchase
                
                
                (2,079,379
                )
                
                (1,852,751
                )Accounts
                    payable
                
                
                (476,669
                )
                
                (122,583
                )Sales
                    commission payable
                
                
                769,871
                
                
                -Other
                    payables and accrued liabilities
                
                
                (5,329
                )
                
                1,233,615Value
                    added tax payables
                
                
                (180,442
                )
                
                (1,547,597
                )Income
                    tax and other tax payables
                
                
                (5,546,217
                )
                
                (434,443
                )Net
                    cash provided by (used in) operating activities
                
                
                (3,587,245
                )
                
                (3,323,298
                )**CASH
                    FLOWS FROM INVESTING ACTIVITIES**Addition
                    to construction in progress
                
                
                -
                
                
                60,863Purchase
                    of property and equipment
                
                
                (128,377
                )
                
                (164,783
                )Purchase
                    of intangible assets
                
                
                -
                
                
                (584,336
                )Advances
                    for construction material and equipment purchase
                
                
                (2,252,156
                )
                
                (21,284
                )Net
                    cash used in investing activities
                
                
                (2,380,533
                )
                
                (709,540
                )**CASH
                    FLOWS FROM FINANCING ACTIVITIES******Increase (decrease) due to related parties
                
                
                (31,231
                )
                
                597,384****Increase of restricted cash
                
                
                (4,906,720
                )
                
                -Increase
                    of notes payable
                
                
                2,341,296
                
                
                -Proceeds
                    from short-term bank loan
                
                
                6,988,500
                
                
                52,202Payments
                    on long-term bank loans
                
                
                -
                
                
                42,710Net cash provided by financing activities
                
                
                4,391,845
                
                
                692,296**EFFECT
                    OF EXCHANGE RATE ON CASH**
                
                
                332,648
                
                
                111,646**DECREASE
                    IN CASH AND CASH EQUIVALENTS**
                
                
                (1,243,285
                )
                
                (3,228,896
                )**CASH
                    AND CASH EQUIVALENTS AT BEGINNING OF PERIOD**
                
                
                7,390,631
                
                
                3,604,350**CASH
                    AND CASH EQUIVALENTS AT END OF PERIOD**
                
                $
                6,147,346
                
                $
                375,454**SUPPLEMENTAL
                    DISCLOSURE OF CASH FLOW INFORMATION**Cash
                    paid during the period for:Interest
                    expense
                
                $
                76,856
                
                $
                129,314Income
                    taxes
                
                $
                4,896,545
                
                $
                495,995
 
 The
        accompanying notes are an integral part of this statement.
  F-4
 
 **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31,
        2008
 (UNAUDITED)
 
 **NOTE
        1 – ORGANIZATION AND BUSINESS**
  RINO
        International Corporation (formerly known as “Jade Mountain Corporation” or
“JMC”), (the“Company) was originally incorporated in 1984 as Applied Biometrics,
        Inc. in accordance with the laws of the State of Minnesota. In August 2000,
        the
        Company determined that it would be unable to complete the development of
        its
        primary product and ceased its ongoing business operations.
 
 On
        December 27, 2006, the shareholders of JMC approved a proposal to re-domicile
        JMC from the State of Minnesota to the State of Nevada. JMC effected the
        re-domicile through a merger with a new Nevada corporation which was formed
        by
        JMC on September 12, 2006 solely and specifically for the purpose of effecting
        the re-domicile of JMC. At this time, JMC changed its name to Jade Mountain
        Corporation. During the first six months ended June 30, 2007, JMC ceased
        all
        business operations and disposed of all its assets, liabilities and operating
        activities. JMC has had no operations or significant assets since the year
        ended
        December 31, 2006.
 
 Innomind
        Group Limited (“Innomind”) was incorporated in the British Virgin Islands
        (“BVI”) on November 17, 2006 as an investment holding company. Through its
        wholly owned subsidiary, Dalian Innomind Environment Engineering Co., Ltd.
        (“Dalian Innomind”) incorporated in the People’s Republic of China (“PRC”) as a
        wholly owned foreign limited liability company on July 9, 2007. Innomind’s
        principal activities are the design, development, manufacture and installation
        of industrial equipment used mainly for environmental protection purposes
        in the
        PRC. In accordance with the business permit, Dalian Innomind’s right of
        operation expires on July 8, 2022 and is renewable on expiry.
 
 Dalian
        Rino Environment Engineering Science And Technology Co., Ltd. (“Dalian Rino”)
        was incorporated in the PRC on March 5, 2003 as a limited liability company.
        The
        business activities of Dalian Rino are the same with those of Dalian Innomind.
        In accordance with the business permit, Dalian Rino’s right of operation expires
        on March 4, 2021 and is renewable.
  On
        October 5, 2007, JMC consummated a Share Exchange Agreement (“the Agreement”)
        with the shareholders of Innomind pursuant to which JMC issued 17,899,643
        shares
        of Common Stock, par value $0.0001 per share to the shareholders of Innomind
        for
        100% equity interest in Innomind. Prior to the Share Exchange: (i) on July
        16,
        2007, the Company consummated a one (1) share for two hundred thousand (200,000)
        shares reverse split of its Common Stock, with fractional shares rounded
        up to
        the nearest whole number (the “Reverse Split”); and (ii) on August 31, 2007, the
        Company’s Board of Directors authorized a one hundred (100) shares for one (1)
        share forward split of the issued and outstanding shares of its Common Stock
        (the “Forward Split”). All share and per share amounts set forth in this Current
        Report as of dates on or after July 16, 2007, give effect to the Reverse
        Split
        and all share and per share amounts set forth in this Current Report as of
        dates
        after August 31, 2007, give effect to the Forward Split.
  F-5
 
 **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31,
        2008
 (UNAUDITED)
  The
        merger of JMC and Innomind is being treated for accounting purposes as a
        capital
        transaction and recapitalization by Innomind (the “accounting acquirer”) and
        re-organization by JMC (the “accounting acquiree”). As a result, Innomind
        acquired the net assets of Jade Mountain at book value.
 
 The
        financial statements have been prepared as if the re-organization had occurred
        retroactively. Accordingly, these financial statements include:
 
 1)
              The
                  balance sheet consisting of the net assets of the accounting acquirer
                  at
                  historical cost and the net assets of the accounting acquiree at
                  historical cost.
 
 2)
              The
                  statement of operations including the operations of the accounting
                  acquirer for the periods presented and the operations of the accounting
                  acquiree from the date of the
                  transaction.
 
 On
        October 3, 2007, Dalian Innomind entered into a series of agreements
        (collectively known as the Restructuring Agreements) with Dalian Rino and
        the
        shareholders of Dalian Rino in which Dalian Innomind assumed the management
        of
        the business activities of Dalian Rino, making Dalian Rino a contractually
        controlled affiliate under EITF 97-2. As both companies were under common
        control before and after the consummation of the Restructuring Agreements
        on
        October 5, 2007, this was accounted for as a reorganization of entities under
        common control and consolidated financial statements were prepared as if
        the
        reorganization occurred at the beginning of the first period
        presented.
 
 Effective
        May 9, 2008, Jade Mountain Corporation changed its original name to “RINO
        International Corporation.” The board approved the changed name and deemed it
        better reflect the direction and business of the Company.
 
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 Principles
        of Consolidation
 
 The
        accompanying consolidated financial statements of Jade Mountain Corporation
        reflect the activities of JMC and its 100% owned subsidiaries Innomind, Dalian
        Innomind and Dalian Rino, a Contractually Controlled Affiliate of Dalian
        Innomind, (collectively, the “Company”). All inter-company balances and
        transactions have been eliminated in consolidation.
 
 Basis
        of Presentation
 
 The
        financial statements of the Company have been prepared in accordance with
        accounting principles generally accepted in the United States and are expressed
        in US dollars.
  F-6
 
 **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31,
        2008
 (UNAUDITED)
  The
        Company has included all normal recurring adjustments considered necessary
        to
        give a fair presentation of operating results for the periods presented.
        Interim
        results are not necessarily indicative of results for a full year. The
        information included in this Form 10-Q should be read in conjunction with
        information included in the 2007 annual report filed on Form
        10-K.
 
 Use
        of
        Estimates
 
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the Unites States requires management to make estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and
        disclosure of contingent assets and liabilities at the date of the financial
        statements and the reported amounts of revenues and expenses during the
        reporting period. Management believes that the estimates utilized in preparing
        its financial statements are reasonable and prudent. Actual results could
        differ
        from those estimates.
 
 Cash
        and Cash Equivalents
 
 For
        purposes of the statements of cash flows, cash and cash equivalents include
        cash
        on hand and demand deposits with a bank with an original maturity of less
        than 3
        months.
 
 The
        cash
        held in escrow pursuant to the Board Escrow Holdback as described in Note
        20 is
        accounted for as other current assets and is not shown as cash or cash
        equivalents on the balance sheet until such funds have been released from
        escrow
        pursuant to the terms of the Securities Purchase Agreement.
 
 Restricted
        Cash
 
 The
        Company records cash deposits in banks or other institutions subject to
        restrictions on the withdrawal or use of the fund as restricted
        cash.
 
 Accounts
        Receivable
 
 Accounts
        receivable represents amounts due from customers for products sales and
        services. Overdue balances are reviewed regularly by senior management. Reserves
        are recorded when collection of amounts due are in doubt. The Company’s current
        accounts receivables are outstanding for less than one year and the Company
        has
        not experienced any loss from uncollected accounts receivable. The Company
        did
        not reserve any allowance for doubtful account as of March 31,
        2008.
 
 Inventories
 
 Inventories
        are stated at the lower of cost or market using weighted average
        method.
  F-7
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31,
        2008
 (UNAUDITED)
 Property,
        Plant and Equipment
 
 Property
        and equipment are stated at cost, less accumulated depreciation. Expenditures
        for additions, major renewals and betterments are capitalized and expenditures
        for maintenance and repairs are charged to expense as incurred. Depreciation
        is
        provided on a straight-line basis, less estimated residual value over the
        assets’ estimated useful lives. The estimated useful lives are as
        follows:
 
 Buildings
              
              
              30
                  YearsPlant
                  and machinery
              
              
              15
                  YearsMotor
                  vehicles
              
              
              10
                  YearsFurniture,
                  fixtures and equipment
              
              
              5
                  Years
 
 Intangible
        Assets
 
 Intangible
        assets are stated at cost, less accumulated amortization and impairments.
        Land
        use rights are stated at cost, less accumulated amortization and are amortized
        over the term of the relevant rights of 50 years from the date of
        acquisition.
 
 Other
        Long-Lived Assets
 
 In
        accordance with SFAS No. 144, “Accounting for the impairment or disposal of
        Long-Lived Assets", long-lived assets and certain identifiable intangible
        assets
        are reviewed for impairment at least annually, or more often whenever events
        or
        changes in circumstances indicate that the carrying amount of an asset may
        not
        be recoverable. For purposes of evaluating the recoverability of long-lived
        assets, the recoverability test is performed using undiscounted net cash
        flows
        related to the long- lived assets. As of March 31, 2008, the Company expected
        these assets to be fully recoverable.
 
 Fair
        Value of Financial Instruments
 
 On
        January 1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements.”
SFAS No. 157, defines fair value, establishes a three-level valuation hierarchy
        for disclosures of fair value measurement and enhances disclosures requirements
        for fair value measures. The carrying amounts reported in the balance sheets
        for
        receivables and payables qualified as financial instruments and are a reasonable
        estimate of fair value because of the short period of time between the
        origination of such instruments and their expected realization and their
        current
        market rate of interest. The three levels are defined as follow:
 
 ·
              Level
                  1 – inputs to the valuation methodology are quoted prices
                  (unadjusted) for identical assets or liabilities in active
                  markets.·
              Level
                  2 – inputs to the valuation methodology include quoted prices for
                  similar assets and liabilities in active markets, and inputs that
                  are
                  observable for the assets or liability, either directly or indirectly,
                  for
                  substantially the full term of the financial
                  instruments.·
              Level
                  3 – inputs to the valuation methodology are unobservable and
                  significant to the fair value.
  F-8
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31,
        2008
 (UNAUDITED)
  As
        of
        March 31, 2008, the short term bank loans amounted to $7,140,000. In accordance
        with SFAS 157, the Company determined that the carrying value of these loans
        approximated the fair value using the level 2 inputs by comparing the stated
        loan interest rate to the rate charged by the Bank of China to similar loans,
        since no quoted market is available.
 
 As
        of
        March 31, 2008, the Company had notes payable of $2,392,052 outstanding.
        This
        amount represents notes issued by banks to vendors with the Company’s restricted
        cash deposit in bank as a guarantee for the payment. These notes were actually
        issued checks with a clearing period ranging from three months to six months.
        These notes are not interest bearing and the cash deposit in bank is restricted
        for withdrawals. The Company determined the carrying amount of the notes
        payable
        approximated the fair value due to its short term in nature and the difference
        between the carrying value and the fair value would be immaterial, if any,
        by
        using the level 3 inputs to discount the payment of notes to the present
        fair
        value.
  The
        Company did not identify any assets or liabilities that are required to be
        presented on the balance sheet at fair value in accordance with SFAS No.
        157.
 
 Revenue
        Recognition
 
 **Contracts**
 
 The
        Company enters into long-term fixed price contracts with customers to
        manufacture and install industrial equipment. Revenue on long-term fixed
        price
        contracts is recognized under the percentage-of-completion method in accordance
        with the American Institute of Certified Public Accountants Statement of
        Position 81-1 “Accounting for Performance of Construction-Type and Certain
        Production-Type Contracts”. Under the percentage-of-completion method,
        management estimates the percentage-of-completion based upon costs incurred
        as a
        percentage of the total estimated costs to the contract. When total cost
        estimates exceed projected revenues, the Company accrues for the estimated
        losses immediately. The use of the percentage of completion method requires
        significant judgment relative to estimating total contract revenues and costs,
        including assumptions relative to the length of time to complete the project,
        the nature and complexity of the work to be performed, and anticipated changes
        in estimated costs. Estimates of total contract revenues and costs are
        continuously monitored during the term of the contract, and recorded revenues
        and costs are subject to revision as the contract progresses. When revisions
        in
        estimated contract revenues and costs are determined, such adjustments are
        recorded in the period in which they are first identified.
  F-9
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31,
        2008
 (UNAUDITED)
 
 **Services**
 
 In
        addition to our specialty equipment sales, the Company uses heavy machining
        equipment to perform machining services for third parties. These engagements
        -
        numbering several hundred per year - are essentially piecework and are completed
        in usually less than one month. Accordingly, these heavy machinery contracts
        do
        not fall within the scope of SOP 81-1. Each machining engagement is governed
        by
        a separate contract, indicating existence of an arrangement. Revenue is
        recognized when service is performed, which is usually concurrent with delivery
        to the customer, the contract price is set by contract, collectibility is
        reasonably assured. Accordingly, these revenues are recognized under Staff
        Accounting Bulletin No. 104.
 
 The
        Company also provides technical professional services to its customers based
        on
        a fixed-price time contract. The Company recognizes services-based revenue
        from
        all of its contracts when the services have been performed, the customers
        have
        approved the completion of the services and invoices have been issued and
        collectibility is reasonably assured.
 
 **Government
        Grant**
 
 The
        Dalian municipal government also approved grants to the Company to encourage
        the
        high technology industry. The grants are recognized as other income on receipt
        from the local government.
 
 **Shipping
        and Handling**
 
 Shipping
        and handling for raw materials purchased are included in cost of goods sold.
        Shipping and handling cost incurred for shipping of finished products to
        customers are included in selling expenses. Shipping and handling expenses
        for
        the three months ended March 31, 2008 and 2007 amounted to $104,275 and $67,913,
        respectively. In addition, $26,997 and $648 of transportation and unloading
        charges and product inspection charges were charged to Cost of Sales in the
        three months ended March 31, 2008 and 2007, respectively.
 
 Research
        and Development Costs
 
 Research
        and development (or “R&D”) expenses include salaries, material, contract and
        other outside service fees, and facilities and overhead costs. Under the
        guidance of SFAS 2, “Accounting for Research and Development Costs”, the Company
        expenses the costs associated with the R&D activities when
        incurred.
 
 Stock-based
        Compensation
 
 Stock-based
        compensation is accounted for at fair value in accordance with SFAS 123(R)
        “Accounting for Stock-Based Compensation”. SFAS 123R requires that compensation
        cost relating to stock-based payment transactions be recognized in financial
        statements. That cost is measured based on the fair value of the equity or
        liability instruments issued on the grant date of such instruments and is
        recognized over the period during which a party is required to provide service
        in exchange for the award (typically the vesting period).
  F-10
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31,
        2008
 (UNAUDITED)
 
 Income
        Taxes
 
 The
        Company accounts for income taxes under the SFAS 109, “Accounting for Income
        Taxes”. Under SFAS 109, deferred tax assets and liabilities are recognized for
        the future tax consequences attributable to differences between the financial
        statement carrying amounts of existing assets and liabilities and their
        respective tax bases. Deferred tax assets and liabilities are measured using
        enacted tax rates expected to apply to taxable income in the years in which
        those temporary differences are expected to be recovered or settled. Under
        SFAS
        109, the effect on deferred tax assets and liabilities of a change in tax
        rates
        is recognized in income in the period included the enactment date.
 
 The
        Company adopted FASB Interpretation 48, “Accounting for Uncertainty in Income
        Taxes” (“FIN 48”) as of January 1, 2007. A tax position is recognized as a
        benefit only if it is “more likely than not” that the tax position would be
        sustained in a tax examination, with a tax examination being presumed to
        occur.
        The amount recognized is the largest amount of tax benefit that is greater
        than
        50% likely of being realized on examination. For tax positions not meeting
        the
“more likely than not” test, no tax benefit is recorded. The adoption had no
        effect on the Company’s financial statements.
 
 China
        Income Taxes
 
 The
        Company’s subsidiaries are governed by the Income Tax Law of the People’s
        Republic of China (PRC) concerning Foreign Investment Enterprises and Foreign
        Enterprises and various local income tax laws (the Income Tax
        Laws).
 
 Beginning
        January 1, 2008, the new Enterprise Income Tax (“EIT”) law has replaced the old
        laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises
        (“FIEs”).
 
 The
        key
        changes are:
 
 a.
              The
                  new standard EIT rate of 25% replaces the 33% rate applicable to
                  both DES
                  and FIEs, except for High Tech companies that pay a reduced rate
                  of
                  15%;
 
 b.
              Companies
                  established before March 16, 2007 continue to enjoy tax holiday
                  treatment
                  approved by local government for a grace period of either for the
                  next 5
                  years or until the tax holiday term is completed, whichever is
                  sooner.
 
 In
        addition, the new EIT also grants tax holidays to entities operating in certain
        beneficial industries, such as the agriculture, fishing, and environmental
        protection. Entities in beneficial industries enjoy a three-year period tax
        exempt and a three-year period with 50% reduction in the income tax
        rates.
 
 Dalian
        Innomind and Rino are entities in the environmental protection industry,
        which
        is qualified for the tax exemption for three years and a 50% reduction for
        the
        following three years. As a result, Dalian Innomind and Rino enjoy a 100%
        tax
        exemption for the years 2008 through 2010 and a 50% income tax reduction
        for the
        years 2011 through 2013.
  F-11
   **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
  Foreign
        Currency Translation
 
 JMC
        and Innomind maintain their accounting records in their functional currency
        in
        the United States dollars and Hong Kong Dollars, respectively, whereas Dalian
        Innomind and Dalian Rino maintain their accounting records in their functional
        currency, Chinese Renminbi (“RMB”). The reporting currency of the Company is the
        United States dollar.
 
 Dalian
        Innomind and Dalian Rino assets and liabilities are translated into United
        States dollars at period-end exchange rates ($0.14280 and $0.13710 at March
        31,
        2008 and December 31, 2007, respectively). Dalian Innomind and Dalian Rino
        revenues and expenses are translated into United States dollars at weighted
        average exchange rates for the periods ($0.13977 and $0.12901 for the years
        ended March 31, 2008 and 2007, respectively). Resulting translation adjustments
        are recorded as a component of accumulated other comprehensive income (loss)
        within stockholders’ equity. The resulting translation gains and losses that
        arise from exchange rate fluctuations on transactions denominated in a currency
        other than the functional currency are included in the results of operations
        as
        incurred. Items in the cash flow statement are translated at the average
        exchange rate for the period. As a result, amounts related to assets and
        liabilities reported on the statement of cash flows will not necessarily
        agree
        with changes in the corresponding balances on the balance sheet.
 
 As
        of March 31, 2008 and December 31, 2007, translation adjustments resulting
        from
        this process included in accumulated other comprehensive income in the
        consolidated statement of stockholders’ equity amounted to $4,250,177 and
        $1,987,272.
 
 Earnings
        Per Share
 
 Basic
        earnings (loss) per share is computed by dividing the net income (loss)
        available to common stockholders by the weighted-average number of common
        shares
        outstanding during the respective period presented in the accompanying financial
        statements.
 
 Fully
        diluted earnings (loss) per share are computed similar to basic income (loss)
        per share except that the denominator is increased to include the number
        of
        common stock equivalents (primarily outstanding options and
        warrants).
 
 Common
        stock equivalents represent the dilutive effect of the assumed exercise of
        the
        outstanding stock options and warrants, using the treasury stock method,
        at
        either the beginning of the respective period presented or the date of issuance,
        whichever is later, and only if the common stock equivalents are considered
        dilutive based upon the Company's net income (loss) position at the calculation
        date.
 
 Segments
 
 The
        Company designs and manufactures pollution control equipment and other equipment
        designed to reduce the resource intensity of steel production, effectively
        serving one segment. Accordingly, segment disclosure is not presented.
        Additional detail on the composition of revenues is presented in Note 16,
        Concentrations and Risks, below.
  F-12
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
  Reclassifications
 
 Certain
        prior year amounts have been reclassified to conform to the current year
        presentation.
 
 Recent
        Accounting Pronouncements
 
 In
        September 2006, FASB issued SFAS 157, Fair Value Measurements. This statement
        defines fair value and establishes a framework for measuring fair value in
        generally accepted accounting principles (GAAP). More precisely, this statement
        sets forth a standard definition of fair value as it applies to assets or
        liabilities, the principle market (or most advantageous market) for determining
        fair value (price), the market participants, inputs and the application of
        the
        derived fair value to those assets and liabilities. The Company adopted SFAS
        No.
        157 as of January 1, 2008 and the adoption did not have an impact on the
        Company’s results of operations or financial condition.
 
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities” (SFAS 159) which permits entities to
        choose to measure many financial instruments and certain other items at fair
        value that are not currently required to be measured at fair value. The SFAS
        159
        became effective for us on January 1, 2008. The Company chose not to elect
        the
        option to measure the fair value of eligible financial assets and
        liabilities.
 
 In
        June 2007, the FASB issued FASB Staff Position No. EITF 07-3, “Accounting for
        Nonrefundable Advance Payments for Goods or Services Received for use in
        Future
        Research and Development Activities” (“FSP EITF 07-3”), which addresses whether
        nonrefundable advance payments for goods or services that used or rendered
        for
        research and development activities should be expensed when the advance payment
        is made or when the research and development activity has been performed.
        The
        Company adopted FSP EITF 07-3 and expensed the research and development as
        incurred.
 
 In
        December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in
        Consolidated Financial Statements - an amendment of Accounting Research Bulletin
        No. 51” (“SFAS 160”), which establishes accounting and reporting standards for
        ownership interests ** in subsidiaries held by parties other than the parent, the amount of
        consolidated net income attributable to the parent and to the noncontrolling
        interest, changes in a parent’s ownership interest and the valuation of retained
        non-controlling equity investments when a subsidiary is deconsolidated. The
        Statement also establishes reporting requirements that provide sufficient
        disclosures that clearly ** identify and distinguish between the interests of the parent and the interests
        of the non-controlling owners. SFAS 160 is effective for ** fiscal years beginning after December 15, 2008. The Company believes that
        the
        application of SFAS 160 will ** not have an impact on its consolidated financial statements.
  F-13
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
 
 In
        December 2007, the FASB issued SFAS 141R, “Business Combinations,” which applies
        to all transactions or other events in which an entity obtains control of
        one or
        more businesses, including those sometimes referred to as “true mergers” or
“mergers of equals” and combinations achieved without the transfer of
        consideration. This statement replaces FASB Statement No. 141 and applies
        to all
        business entities, including mutual entities that previously used the
        pooling-of-interests method of accounting for some business combinations.
        The
        adoption of SFAS No. 141R will have an impact on the Company’s accounting for
        business combination, but the effect is dependent upon acquisition at that
        time.
  **NOTE
        3 – RESTRICTED CASH**
 
 Restricted
        cash consisted of the following:
 
 March 31, 2008
              
              December 31, 2007(unaudited)Project
                  bidding
              
              $
              1,599,360
              
              $
              -Security
                  deposit for notes payable
              
              
              2,392,052
              
              
              -Escrow
                  account
              
              
              1,000,000
              
              
              1,000,000Total
              
              $
              4,991,412
              
              $
              1,000,000
  **NOTE
        4 - ACCOUNTS RECEIVABLE**
 
 Accounts
        receivable consisted of the following:
 
 March 31, 2008
              
              December 31, 2007(unaudited)Accounts
                  receivable
              
              $
              25,271,971
              
              $
              20,840,336Less:
                  allowance for doubtful accounts
              
              
              -
              
              
              -Accounts
                  receivable, net of allowance
              
              $
              25,271,971
              
              $
              20,840,336
 
 As
        of March 31, 2008 and December 31, 2007, the Company considered all accounts
        receivable collectable and has not recorded a provision for doubtful accounts.
        Our equipment sales contracts call for performance retainages of 10% of contract
        value for one year after commissioning. Accounts receivable as of March 31,
        2008
        and December 31, 2007 contain performance retainages of $2,954,804 and
        $1,618,203, respectively.
 
 **NOTE
        5 – INVENTORIES**
 
 As
        of March 31, 2008 and December 31, 2007, inventories consisted of raw material
        and supplies amounted to $244,323 and $178,480, respectively.
 
 For
        the periods ended March 31, 2008 and December 31, 2007, no provision for
        obsolete inventories was recorded by the Company.
  F-14
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
 
 **NOTE
        6 – COST AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS**
 
 The
        current costs and estimated earnings in excess of billings represent revenues
        recognized in excess of amounts billed pursuant to the percentage-of-completion
        method used to recognize revenue. As of March 31, 2008 and December 31, 2007,
        revenues recognized in excess of amounts billed were $1,049,322 and $2,818,122,
        respectively.
  March 31,
                2008
              
              December 31,
                2007(Unaudited)Contracts
                  costs incurred plus recognizedprofits
                  less recognized losses to date
              
              $
              17,105,019
              
              $
              44,074,924Less
                  progress billings
              
              
              16,055,697
              
              
              41,256,802Costs
                  and estimated earnings in excess of billings
              
              $
              1,049,322
              
              $
              2,818,122
  **NOTE
        7 – PROPERTY, PLANT AND EQUIPMENT**
 
 The
        following is a summary of property and equipment at March 31, 2008 and December
        31, 2007:
 
 March 31, 2008
              
              
              December 31, 2007(Unaudited)Buildings
              
              $
              3,772,997
              
              $
              3,612,413Equipment
                  and machinery
              
              
              7,763,938
              
              
              7,430,865Motor
                  Vehicles
              
              
              1,140,033
              
              
              986,274Furniture
                  and office equipment
              
              
              387,023
              
              
              352,840Construction
                  in progress
              
              
              6,588
              
              
              6,30713,070,579
              
              
              12,388,699Less:
                  accumulated depreciation
              
              
              1,644,332
              
              
              1,388,118Property,
                  plant and equipment, net
              
              $
              11,426,247
              
              $
              11,000,581
 
 Depreciation
        expense for the three months ended March 31, 2008 and 2007 was $190,379 and
        $155,689, respectively. For the three months ended March 31, 2008 and 2007,
        no
        interest was capitalized into construction in progress.
 
 **NOTE
        8 – INTANGIBLE ASSETS**
 
 The
        following is a summary of intangible assets at March 31, 2008 and December
        31,
        2007:
  F-15
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
 
 March 31,
                2008
              
              December 31,
                2007(Unaudited)Land
                  use rights
              
              $
              1,079,934
              
              $
              1,033,970Patents
                  and licenses
              
              
              714,000
              
              
              683,6111,793,934
              
              
              1,717,581Less:
                  accumulated amortization
              
              
              119,651
              
              
              98,991Net
              
              $
              1,674,283
              
              $
              1,618,590
 
 Amortization
        expense for the three months ended March 31, 2008 and 2007 amounted to $15,914
        and $11,998, respectively.
 
 **NOTE
        9 – LIQUIDATED DAMAGES PAYABLE**
 
 Registration
        Rights
 
 Pursuant
        to the Securities Purchase Agreement entered into between the Company and
        a
        group of accredited investors (“Securities Purchase Agreement”) on October 5,
        2007, the Company was obligated to make efforts to file a registration statement
        with the SEC to be declared effective by the SEC on or before March 3, 2008.
        After March 3, 2008 and for each 30-calender day period thereafter in which
        the
        registration statement fails to be declared effective, the Company shall
        pay
        liquidated damages to investors equal to 1% of the funds raised, or $244,803,
        subject to a cap of 10% of total funds raised, or total liquidated damages
        of
        $2,448,032.
 
 On
        the date of the transaction, the Company determined that the registration
        statement would not be filed and declared effective within the required period
        and accrued $500,000 as liquidated damages payable. The liquidated damages
        payment was treated as financing cost at the inception and was recorded as
        a
        deduction from additional paid-in capital in accordance with the provisions
        of
        FSP EITF 00-19-2. This amount accrued is based on the penalties due between
        March 4, 2008 and May 3, 2008, the date before which the Company originally
        anticipated the registration statement would be declared effective. To date,
        the
        registration statement has not been declared effective. Accordingly, the
        Company
        recorded an additional reserve of $500,000 in March 2008.
 
 Independent
        Directors
 
 Pursuant
        to the Securities Purchase Agreement, the Company’s Board of Directors must
        consist of a minimum of 5 members, a majority of whom must be “independent
        directors” as defined in NASDAQ Marketplace Rule 4200(a)(15) not later than 120
        days after the date of the agreement. The Company was required to hold
        $1,000,000 in escrow (“Board Escrow Holdback”) and will only be released by the
        escrow agent on receiving requisite written notice from the investor
        representatives when this requirement is met. Failing to comply with this
        requirement, the Company shall pay liquidated damages to investors equal
        to 1%
        of the funds raised, or $244,803, for each month or part of a month, pro
        rata,
        in which independent directors do not constitute a majority of the 5-member
        board.
  F-16
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
 
 On
        the date of the transaction, the Company determined that this requirement
        would
        not be met within the required period and accrued $500,000 as liquidated
        damages
        payable. The liquidated damages payment was treated as financing cost at
        the
        inception and was recorded as a deduction from additional paid-in capital
        in
        accordance with the provisions of FSP EITF 00-19-2. This amount accrued is
        based
        on the penalties due between December 8, 2007 to April 8, 2008 on or before
        which the Company originally anticipated the Board of Directors would consist
        of
        a minimum of 5 members with a majority being independent directors. The
        independent directors were seated on March 20, 2008, curing this delinquency.
        Total liquidated damages payable for the independent board member requirement
        therefore is $418,513. To date, no liquidated damages have been
        paid.
 
 **NOTE
        10 – NOTES PAYABLE**
 
 Balances
        at March 31, 2008 and December 31, 2007 consist of the following:
 
 March 31,
                2008
              
              December 31,
                2007(Unaudited)Notes
                  payable to one domestic equipment provider, no interest, due in
                  September
                  2009, secured by restricted cash balance reported in**NOTE
                  3 - RESTRICTED CASH**,
                  above.
              
              $
              2,392,052
              
              $
              -Total
              
              $
              2,392,052
              
              $
              -
 
 **NOTE
        11 – SHORT TERM BANK LOANS PAYABLE**
 
 Balances
        at March 31, 2008 and December 31, 2007 consist of the following:
 
 March 31,
                2008
              
              December 31,
                2007(Unaudited)Due
                  to bank, interest at 7.47%, in February 2009, secured by certain
                  buildings, equipment, and land use rights
              
              $
              7,140,000
              
              $
              -Total
              
              $
              7,140,000
              
              
              -
 
 Total
        interest expense on the bank loans for the three months ended March 31, 2008
        and
        2007 amounted to $78,704 and $153,857, respectively.
 
 **NOTE
        12 – INCOME TAXES**
 
 Income
        Taxes
 
 The
        Company is subject to income taxes on an entity basis on income arising in
        or
        derived from the tax jurisdiction in which each entity is
        domiciled.
 
 RINO
        International Corporation was incorporated in the United States and has incurred
        net operating loss for income tax purpose for the period ended March 31,
        2008.
        The Company had loss carry forwards of approximately $86,200 for U.S. income
        tax
        purposes available for offset against future taxable U.S. income expiring
        in
        2027. Management believes that the realization of the benefits from these
        losses
        appears uncertain due to the Company’s historical operating income and
        continuing losses. Accordingly, a full deferred tax asset valuation allowance
        has been provided and no deferred tax asset benefit has been recorded. The
        valuation allowance at March 31, 2008 was $86,200. The net change in the
        valuation allowance was an increase of $86,200.
  F-17
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
  Innomind
        was incorporated in the BVI and under current law of the BVI, income is not
        subject to income tax.
 
 Dalian
        Innomind and Dalian Rino were incorporated in the PRC and are subject to
        PRC
        income tax which is computed according to the relevant laws and regulations
        in
        the PRC.
 
 In
        2007, Dalian Innomind was entitled to tax exemption granted to entities
        qualified as Foreign Invested Enterprise (“FIE”) so no provision for income tax
        was made.
 
 Before
        July 2007, Dalian Rino was also qualified as Foreign Invested Enterprise
        (“FIE”)
        so no provision for income tax was made for the three months ended March
        31,
        2007. On July 12, 2007, Dalian Rino changed its license status to as a domestic
        entity and was subject to an income tax rate of 33%.
 
 Starting
        January 1, 2008, the new Enterprise Income Tax laws went effective. Under
        the
        new law, Dalian Innomind and Dalian Rino are entitled to a three-year income
        tax
        exemption and a 50% income tax reduction for the following three years, no
        provision for income tax was made for 2008.
 
 The
        provision for income taxes differs from the amount computed by applying the
        statutory United States federal income tax rate to income before income taxes.
        The following table reconciles the statutory rates to the Company’s effective
        tax rate for the three months ended March 31, 2008 and 2007:
  2008
              
              2007U.S.
                  Statutory rate
              
              
              34.0
              %
              
              34.0
              %Foreign
                  income not recognized in USA
              
              
              (34.0
              )
              
              (34.0
              )China
                  income taxes
              
              
              25.0
              
              
              25.0China
                  income tax exemption
              
              
              (25.0
              )
              
              (25.0
              )Effective
                  income tax rate
              
              
              0.0
              %
              
              0.0
              %
 
 Value
        Added Tax
 
 Enterprises
        or individuals who sell commodities, engage in repair and maintenance or
        import
        and export goods in the PRC are subject to a value added tax, VAT, in accordance
        with Chinese laws. The VAT standard rate is 17% of the gross sales price.
        A
        credit is available whereby VAT paid on the purchases of semi-finished products
        or raw materials used in the production of the Company’s finished products can
        be used to offset the VAT due on sales of the finished product.
  F-18
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
  VAT
        on sales and VAT on purchases amounted to $5,056,817, and $3,349,927 for
        the
        periods ended March 31, 2008 and $1,311,221 and $1,766,157 for the period
        ended
        March 31, 2007, respectively. Sales and purchases are recorded net of VAT
        collected and paid as the Company acts as an agent because the VAT taxes
        are not
        impacted by the income tax holiday. As of March 31, 2008 and December 31,
        2007,
        the VAT payable amounted to $2,937,899 and $2,989,365,
        respectively.
 
 **NOTE
        13 – REDEEMABLE COMMON STOCK**
 
 On
        October 5, 2007, the Company received $24,480,319 (or $21,253,722 net proceeds
        after deducting the offering expenses) from a group of accredited investors
        and
        issued 5,464,357 shares of restricted common stock at $4.48 per share. The
        Securities Purchase Agreement contained a transferrable provision such that
        if
        any governmental agency in the PRC takes action that adversely affects the
        Restructuring Agreements or the Share Exchange Agreement and the company
        doesn’t
        mitigate the adverse effect to the investors’ reasonable satisfaction within 60
        days of the PRC action, then the company is required to pay liquidated damages
        in an amount equal to the initial investment without interest and the
        shareholder must return the shares acquired under the agreement. Consequently,
        the total amount of the gross proceeds has been excluded from permanent equity
        and recorded as redeemable common stock in accordance with Rule 5-02.28 of
        Regulation S-X and Section 211 of the Codification of Financial Reporting
        Policies. Although there is no fixed redemption requirement in any of the
        next
        five years, the entire amount of $24,480,319 could become redeemable in any
        of
        the next five years. These shares are included as outstanding common stock
        for
        purposes of earnings per share.
 
 **NOTE
        14 – COMMON STOCK AND OTHER STOCKHOLDERS’ EQUITY**
 
 Statutory
        Reserves
 
 The
        Company is required to make appropriations to the statutory surplus reserve
        based on the after-tax net income determined in accordance with the laws
        and
        regulations of the PRC. Prior to January 1, 2006 the appropriation to the
        statutory surplus reserve should be at least 10% of the after tax net income
        determined in accordance with the laws and regulations of the PRC until the
        reserve is equal to 50% of the entities’ registered capital. Appropriations to
        the statutory public welfare fund are at 5% to 10% of the after tax net income
        determined by the Board of Directors. Effective January 1, 2006, the Company
        is
        only required to contribute to one statutory reserve fund at 10 percent of
        net
        income after tax per annum, such contributions not to exceed 50 percent of
        the
        respective company’s registered capital.
 
 The
        statutory reserve funds are restricted for use to set off against prior period
        losses, expansion of production and operation or for the increase in the
        registered capital of the Company. These reserves are not transferable to
        the
        Company in the form of cash dividends, loans or advances. These reserves
        are
        therefore not available for distribution except in liquidation.
 
 As
        of March 31, 2008 and December 31, 2007, the Company appropriated $2,664,785
        and
        $2,109,539 respectively to the reserves funds based on its net income in
        accordance with the laws and regulations of the PRC.
 
 Common
        Stock and Warrants
 
 **Issuance
        of Common Stock in Private Placement**
 
 In
        connection with the private placement, 250,000 shares of common stock were
        issued to a consultant for advisory services. This was accounted for as a
        cost
        of issuance and recorded as additional paid-in capital in the accompanying
        financial statements.
  F-19
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
 
 In
        connection with the private placement and pursuant to the Engagement Agreement
        Providing for Investment Banking Services, dated January 19, 2007 by and
        between
        the Company and the placement agent, the placement agent received the following
        compensation: (i) $80,000 cash as an engagement and documentation fee; (ii)
        $1,750,000 as a placement commission; (iii) 875,000 shares of Common Stock,
        and
        (iv) warrants to purchase 382,500 shares of Common Stock at an exercise price
        of
        $5.376 per share, exercisable within 6 years of the date of issue. The exercise
        price of the warrant is subject to adjustments under certain circumstances
        and
        the warrants permit cashless exercise by the holders. This was accounted
        for as
        a cost of issuance and recorded as additional paid-in capital in the
        accompanying financial statements.
 
 The
        warrants issued to the placement agent qualify as permanent equity under
        EITF
        00-19, the value of which warrants has created offsetting debit and credit
        entries to additional paid-in capital.
 
 **Issuance
        of Common Stock to Former Chief Financial Officer of Dalian
        Rino**
 
 At
        the Closing of the Share Exchange Agreement and the private placement, the
        Company issued 20,000 shares of common stock to the former chief financial
        officer of Dalian Rino, in full satisfaction of Dalian Rino’s obligations to the
        former chief financial officer under a Compensation Agreement dated July
        30,
        2007. The shares were valued at market on the date of issuance, yielding
        an
        aggregate fair value of total $49,000. This expense was recorded as stock
        compensation expense.
 
 **NOTE
        15 – STOCK BASED COMPENSATION**
 
 On
        September 27, 2007, pursuant to an Employment Agreement, the Company granted
        to
        Mr. Bruce Richardson, the Chief Financial Officer and Secretary, a non-qualified
        stock option to purchase 250,000 shares of its Common Stock at an exercise
        price
        of $5.376 per share, vesting in 3 equal annual installments beginning on
        January
        2, 2009. The options will be issued as soon as practical after January 2,
        2009.
 
 The
        fair values of stock options granted to the executive were estimated at the
        date
        of grant using the Black-Scholes option-pricing model with the following
        assumptions:
  Expected
              
              Expected
              
              Dividend
              
              Risk Free
              
              Grant DateLife
              
              Volatility
              
              Yield
              
              Interest Rate
              
              Fair ValueExecutives
              
              
              3.0
                  yrs
              
              
              50
              %
              
              0
              %
              
              4.05
              %
              $
              4.48
 
 -
              Volatility:
                  One year historical volatility of our stock is 82.04%. Adjustment
                  is made
                  based on volatility of industry peers average which is 31%, to
                  arrive at
                  50% as expected volatility.
 
 -
              Dividend
                  Yield: The expected dividend yield is zero. The Company has not
                  paid a
                  cash dividend and does not anticipate paying cash dividends in
                  the
                  foreseeable future.
  F-20
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
  -
              Risk
                  Free Rate: Risk-free interest rate of 4.05% was used. The risk-free
                  interest rate was based on U.S. Treasury yields with a remaining
                  term that
                  corresponded to the expected term of the option calculated on the
                  granted
                  date.
 
 -
              Expected
                  Life: Life of three years was used. Because the Company has no
                  historical share option exercise experience to estimate future
                  exercise
                  patterns, the expected life was determined using the simplified
                  method as
                  these awards meet the definition of "plain-vanilla" options under
                  the
                  rules prescribed by Staff Accounting Bulletin No.
                  107.
 
 The
        fair value of the stock option grant to the executives was $4.48 per share
        on
        the date of grant.  The fair value of the stock option grant to the Chief
        financial Officer and Secretary was $1.83 per share on the date of
        grant.
 
 Stock
        compensation expense is recognized based on awards expected to vest. There
        were
        no estimated forfeitures as the Company has a short history of issuing options.
        SFAS No. 123R requires forfeitures to be estimated at the time of grant and
        revised in subsequent periods, if necessary, if actual forfeitures differ
        from
        those estimates.
 
 The
        250,000 options granted in 2007 had fair value of approximately $458,448.
        The
        Company recognized $38,204 of compensation expense in general and administrative
        expenses for the three months ended March 31, 2008.
 
 As
        of March 31, 2008, the total compensation cost related to stock options not
        yet
        recognized was $382,040 and will be recognized over the weighted average
        life of
        3 years.
 
 The
        following is a summary of the stock options activity:
  Number of
                Options
                Outstanding
              
              Weighted-
                Average
                Exercise
                Price
              
              Aggregate
                Intrinsic
                ValueBalance, December
                  31, 2007
              
              
              250,000
              
              $
              5.38
              
              
              -GrantedForfeitedExercisedBalance,
                  March 31, 2008
              
              
              250,000
              
              $
              5.38
              
              
              -
  F-21
 
 **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
 
 The
        following is a summary of the status of options outstanding at March 31,
        2008:
 
 
 Outstanding Options
              
              Exercisable OptionsExercise
                Price
              
              
              Number
              
              
              Average
                Remaining
                Contractual
                Life
              
              
              Average
                Exercise
                Price
              
              
              Number
              
              
              Weighted
                Average
                Exercise
                Price$5.38
              
              
              250,000
              
              
              2.50
                  years
              
              
              $5.38
              
              
              -
              
              
              $5.38Total
              
              
              250,000
              
              
              
              
              
              
              
              
              -
  **NOTE
        16 - EARNINGS PER SHARE**
 
 The
        following demonstrates the calculation for earnings per share for the three
        months ended March 31:
  2008
              
              2007Net
                  income
              
              $
              5,020,346
              
              $
              3,408,956Adjustments
                  for diluted EPS calculation
              
              
              -
              
              
              -Adjusted
                  net income for calculating EPS-diluted
              
              $
              5,020,346
              
              $
              3,408,956Weighted
                  average number of common stock**–**Basic
              
              
              25,000,000
              
              
              17,899,643Effect
                  of dilutive securities:Warrants
                  and options
              
              
              161,062
              
              
              -Weighted
                  average number of common stock**–**Diluted
              
              
              25,161,062
              
              
              17,899,643Earnings
                  per share:Basic
              
              $
              0.20
              
              $
              0.19Diluted
              
              $
              0.20
              
              $
              0.19
 
 **NOTE
        17 – RELATED PARTY TRANSACTIONS**
 
 The
        Company owed $79,753 and $106,963 to a stockholder as of March 31, 2008 and
        December 31, 2007 respectively for advances made on an unsecured basis,
        repayable on demand and interest free. Imputed interest is charged per annum
        on
        the amount due at 7% and 6% for the periods ended March 31, 2008 and December
        31, 2007 respectively. Total imputed interest recorded as additional paid-in
        capital amounted to $1,862 and $18,271 for the periods ended March 31, 2008
        and
        2007, respectively.
 
 **NOTE
        18 – CONCENTRATIONS AND RISKS**
 
 Cash
        includes cash on hand and demand deposits in accounts maintained with state **** owned banks within the People’s Republic of China. Total cash deposited with
        these banks at March 31, 2008 and December 31, 2007 amounted to $11,138,758
        and
        $8,390,631, respectively, of which no deposits are covered by insurance.
        The
        Company has not experienced any losses in such accounts and believes it is
        not
        exposed to any risks on its cash in bank accounts.
  F-22
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
 
 The
        Company relied on a small number of customers. During the three months ended
        March 31, 2008 and 2007, five major customers accounted for 64.5% and 94.4%
        respectively, of the Company’s total sales. At March 31, 2008 and December 31,
        2007, accounts receivable from those customers totaled $10,287,355 and
        $13,627,578 respectively.
 
 PRC
        Risks
 
 The
        Company's operations are carried out in the PRC. Accordingly, the Company's
        business, financial condition and results of operations may be influenced
        by the
        political, economic and legal environments in the PRC, and by the general
        state
        of the economy in the regions where the Company’s customers are located. The
        Company's operations in the PRC are subject to specific considerations and
        significant risks not typically associated with companies in the North America
        and Western Europe. These include risks associated with, among others, the
        political, economic and legal environments and foreign currency exchange.
        The
        Company's results may be adversely affected by changes in governmental policies
        with respect to laws and regulations, anti-inflationary measures, currency
        conversion and remittance abroad, and rates and methods of taxation, among
        other
        things.
 
 The
        PRC government imposes controls on the convertibility of RMB into foreign
        currencies and, in certain cases, the remittance of currency out of the PRC.
        Under existing PRC foreign exchange regulations, payment of current account
        items, including profit distributions, interest payments and expenditures
        from
        the transaction, can be made in foreign currencies without prior approval
        from
        the PRC State Administration of Foreign Exchange by complying with certain
        procedural requirements. However, approval from appropriate governmental
        authorities is required where RMB is to be converted into foreign currency
        and
        remitted out of the PRC to pay capital expenses, such as the repayment of
        bank
        loans denominated in foreign currencies. The PRC government may also at its
        discretion restrict access in the future to foreign currencies for current
        account transactions.
 
 **NOTE
        19 – COMMITMENTS AND CONTINGENCIES**
 
 Employee
        Benefits
 
 The
        full time employees of the Company are entitled to employee benefits including
        medical care, welfare subsidies, unemployment insurance and pension benefits
        through a Chinese government mandated multi-employer defined contribution
        plan.
        The Company is required to accrue for those benefits based on certain
        percentages of the employees’ salaries and make contributions to the plans out
        of the amounts accrued for medical and pension benefits. The total provisions
        and contributions made for such employee benefits was $4,739 and $3,725or
        the
        three months ended March 31, 2008 and 2007, respectively. The Chinese government
        is responsible for the medical benefits and the pension liability to be paid
        to
        these employees.
  F-23
  **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
 
 Capital
        Commitments
 
 As
        of March 31, 2008 and December 31, 2007, the Company had firm purchase
        commitments for capital projects in progress of $0 and $750,844
        respectively.
 
 Issuance
        of Options to Purchase Common Stock to Current Chief Financial
        Officer
 
 Pursuant
        to an employment agreement signed on September 27, 2007, the current chief
        financial officer was granted options to purchase 250,000 shares of common
        stock.
 
 **NOTE
        20 – ESCROW ACCOUNTS**
 
 At
        the private placement closing, Zou Dejun and Qiu Jianping, who, through The
        Innomind Trust, together control 71.6% of the Company’s outstanding common
        stock, and are the founders of Dalian Rino - delivered to an escrow agent
        a
        total of 5,580,000 of their beneficially owned shares of common stock in
        order
        to secure the Company’s obligation under the Securities Purchase Agreement to
        deliver additional common stock to the private placement investors in the
        event
        the Company fails to achieve certain after-tax net income targets for fiscal
        years 2007 and 2008 (“Make Good Escrow Shares”). Those targets are $16,000,000
        in after-tax net income (“ATNI”) for the fiscal year ended December 31, 2007,
        and $28,000,000 in after-tax net income for the fiscal year ending December
        31,
        2008. For purposes of the Make Good agreements only, no expense related to
        return of the shares from escrow would be charged against ATNI. If the Company
        not achieved the 2007 net income target, Zou Dejun and Qiu Jianping would
        have
        been obligated to transfer 1,674,000 shares of their common stock to the
        private
        placement investors on a pro-rata basis. The 2007 net income target was achieved
        and the shares are to be returned to Zou and Qiu. If we fail to achieve the
        2008
        net income target, Zou and Qiu must transfer to the investors the remaining
        3,906,000 shares still in escrow.
 
 No
        later than February 2, 2008, the Company’s Board of Directors were to consist of
        a minimum of 5 members, a majority of whom must be “independent directors” as
        defined in NASDAQ Marketplace Rule 4200(a)(15). This covenant was complied
        with
        on March 20, 2008. Until this covenant was complied with, we were required
        to
        hold $1,000,000 in escrow (“Board Escrow Holdback”). If for any reason or no
        reason the escrow agent did not receive requisite written notice from the
        investor representatives as to releasing this sum from escrow within 120
        days
        after the private placement closing, we were required to pay liquidated damages
        of $244,803 per month (or partial month) until the default is cured. No
        liquidated damages have yet been paid.
  F-24
 
 **RINO
        INTERNATIONAL CORPORATION AND SUBSIDIARIES**
 **(FORMERLY
        KNOWN AS JADE MOUNTAIN CORPORATION)**
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
        31, 2008
 (UNAUDITED)
  The
        cash held in escrow pursuant to the Board Escrow Holdback as described above
        will be accounted for as other current assets and will not be shown as cash
        or
        cash equivalents on the balance sheet until such funds have been released
        from
        escrow pursuant to the terms of the Securities Purchase Agreement. The shares
        held in escrow as Make Good Escrow Shares will not be accounted for on our
        books
        until such shares became releasable from escrow pursuant to the terms of
        the
        Securities Purchase Agreement. If any Make Good Escrow Shares are released
        to
        the company management or employees, the value of such shares at the time
        of
        release will be recorded as compensation expense with a corresponding offset
        to
        additional paid-in capital in accordance with SFAS 123(R) paragraph 11. As
        a
        result, the Company recognized $7,499,520 of compensation expense for the
        year
        ended December 31, 2008. If any Make Good Escrow Shares are released to the
        Investors, no entry will be made. During the time such Make Good Escrow Shares
        are held in escrow, they will be accounted for as contingently issuable shares
        in determining the EPS denominator in accordance with SFAS 128.
 
 **NOTE
        21 – RESTATEMENT**
 
 Subsequent
        to the publication of the financial statements Management determined that
        there
        were material errors in the presentation of redeemable stock that was presented
        as permanent equity. These financial statements have been restated to correct
        those errors. Each financial statement line item that was affected is detailed
        in the following table.
 
 March 31, 2008
              
              March 31, 2008
              
              December 31,
                2007
              
              December 31,
                2007Original
              
              Restated
              
              Original
              
              RestatedConsolidated
                  Balance SheetsRedeemable
                  common stock
              
              
              -
              
              
              24,480,319
              
              
              -
              
              
              24,480,319Additional
                  paid-in capital
              
              
              32,742,048
              
              
              8,261,729
              
              
              32,701,982
              
              
              8,221,663Total
                  common stock and other stockholders’ equity (previously ‘Stockholders’
                  equity’)
              
              
              55,500,773
              
              
              31,020,454
              
              
              48,177,456
              
              
              23,697,137
 
 The
        restatement had no effect on the statements of income and comprehensive income,
        including net income and earnings per share, or the statements of changes
        in
        cash flows.
  F-25


Item
      2.
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations.





Disclaimer
      Regarding Forward-looking Statements




Certain
      statements made in this report, and other written or oral statements made by
      or
      on behalf of Jade Mountain Corporation, may constitute “forward-looking
      statements” under the Private Securities Litigation Reform Act of 1995,
      which represent the expectations or beliefs of, including, but not limited
      to,
      statements concerning Jade Mountain Corporation’s operations, performance,
      financial condition and growth. For this purpose, any statements contained
      in
      this report that are not statements of historical fact may be deemed
      forward-looking statements. Without limiting the generality of the foregoing,
      when used in this report, the word “believes,” “expects,” “estimates,”
“intends,” “will,” “may,” “anticipate,” “could,” “should,” “can,” or “continue”
or the negative or other variations thereof or comparable terminology are
      intended to identify forward-looking statements. Examples of such statements
      in
      this report include descriptions of our plans and strategies with respect to
      developing certain market opportunities, our overall business plan, our plans
      to
      develop additional strategic partnerships, our intention to develop our products
      and platform technologies, our continuing growth and our ability to contain
      our operating expenses. All forward-looking statements are subject to certain
      risks and uncertainties that could cause actual events to differ materially
      from
      those projected, including those described under the caption “Risk Factors” in
      our Annual Report on Form 10-K and matters described in this report generally.
      In light of these risks and uncertainties, there can be no assurance that the
      forward-looking statements contained in this filing will in fact occur. You
      should not place undue reliance on these forward-looking
      statements.





The
      following discussion and analysis of our financial condition and results of
      operations should be read in conjunction with the financial statements and
      accompanying notes and the other financial information appearing in Part I,
      Item 1 and elsewhere in this report.





*Except
      as otherwise specifically stated or unless the context otherwise requires,
      the
      "Company", "we," "us," "our," and the "Registrant" refer to (i) RINO
      International Corporation (formerly, Jade Mountain Corporation), (ii) Innomind
      Group Limited (“Innomind”), a wholly-owned subsidiary of RINO International
      Corporation organized under the laws of the British Virgin Islands, Dalian
      Innomind Environment Engineering Co., Ltd. (“Dalian Innomind”), a wholly-owned
      subsidiary of Innomind organized under the laws of the People’s Republic of
      China (the “PRC”), and Dalian RINO Environment Engineering Science and
      Technology Co., Ltd., a contractually controlled affiliate of Dalian Innomind
      organized under the laws of the PRC (“RINO” or “Dalian
      Rino”).*





**Overview**





The
      Company is engaged in designing, developing, manufacturing, and installing
      environmental protection and energy saving equipment for the Chinese iron and
      steel industry. Most of our customers are large, state-owned iron and steel
      companies. Our business operations are conducted throughout China.




China’s
      iron and steel companies have experienced robust growth during the last twenty
      years, following the expansion of China’s economy and industrial base,
      generally. Along with this growth, the iron and steel industry has produced
      large amounts of waterborne and airborne industrial waste and pollution, and
      as
      a consequence it faces increasingly stringent governmental mandates to reduce
      or
      eliminate sulphur dioxide emissions and untreated wastewater discharges. Failure
      to meet mandated emission and discharge standards can result in financial
      penalties.





Demand
      for our core product, the Lamella Wastewater System, increased 26.7% to $6.97
      million in 2007 and continued to record strong growth in the first quarter
      of
      2008, rising 17.6% over first quarter 2007. Our Desulphurization System which
      we
      introduced in late 2006 is based on proprietary technology we jointly developed
      with the Research Institute of the Chinese Academy of Sciences, and can reduce
      flue gas sulphur dioxide levels by over 90%. We expect to see strong demand
      from
      the industry for the solutions that our Desulphurization System offers for
      airborne sulphur dioxide emissions. Starting in January 2007, we launched
      another new product, our Anti-Oxidation System that materially reduces oxidation
      loss in the production of hot rolled steel plate. Anti-oxidation is a
      long-sought solution in the Iron and Steel industry. We believe our
      Anti-Oxidation System, including coatings and spraying equipment is the only
      online system that prevents or reduces oxidation without needing to first cool
      down the steel slab. We anticipate that our Anti-Oxidation System will be an
      important driver of revenue growth.




2




In
      addition to the foregoing, we provide machining services to third parties,
      utilizing our heavy machine tools’ idle time to generate contract manufacturing
      revenue. In the first quarter of 2007, we also earned a significant amount
      of
      revenue from providing technical support to a business partner for the
      fulfillment of its desulphurization contract. That technical support business
      maintained our revenue growth while we experienced production capacity
      constraints. This business declined throughout the final 2 quarters of 2007
      as
      we built up adequate production capacity which allowed us to refocus on our
      manufacturing business. . We did not generate any revenue from technical support
      business in the three months ended March 31, 2008.




We
      also
      receive grants from the local government with amounts varying from year to
      year
      as rewards for our continued investment in new technologies. While being
      selected for these grants signals important government support for our
      technology development efforts, we believe the amounts of these grants are
      immaterial to our business. In the twelve months ended December 31, 2007, we
      received government grants of $228,430, or 0.4% of our total equipment and
      services sales revenue for the period. In the twelve months ended December
      31,
      2006, we received government grants of $448,515, or 4.4% of our total sales
      revenue for those periods. In the three months ended March 31, 2008 and 2007,
      we
      received no government grants. For the three months ended March 31, 2008, we
      were awarded a government incentive prize in the amount of $73,377 by the local
      PRC government for Dalian RINO’s significant tax contribution as a tax-payer
      which we recorded as our other income.




All
      our
      products are custom-built to our customers’ specific requirements. We enter into
      fixed price engineering and installation agreements with our customers that
      are
      performed in engineering, manufacturing, construction and installation phases.
      Equipment and components are engineered and manufactured primarily at our
      headquarter facilities before being installed at our customers’ sites.
      Generally, we fulfill our contracts in twelve months.




Our
      project-based revenue is affected directly by our customers’ capital budgets and
      need to build new plants. Since most of our customers are
      state-owned-enterprises, their budgeting decisions are influenced by the central
      government’s environmental protection and pollution control policies, which
      presently are favorable to our business and products. We expect such policy
      emphasis to continue for the foreseeable future.




The
      cost
      of revenue for our products includes direct materials, direct labor, and
      manufacturing overhead, with a significant portion allocable to materials costs,
      which are subject to fluctuation.




**Recent
      Developments**




*Change
      in Independent Accountants*




On
      April
      29, 2008, our board of directors approved our termination of Jimmy C.H. Cheung
      & Co., CPAs as our independent accountants and our engagement of Moore
      Stephens Wurth Frazer and Torbet, LLP as our independent accountants.




*Name
      Change and Trading Symbol Change*





Effective
      May 9, 2008, we changed our name from Jade Mountain Corporation to “RINO
      International Corporation.” The board approved the changed name and deemed it a
      better reflection of the direction and business of the Company.





The
      name
      change is completed in connection with a merger pursuant to Section 92A.180
      of the Nevada Revised Statutes, according to which, the merger is in the form
      that the Company’s wholly-owned subsidiary, China RINO, Inc., a corporation
      incorporated under the laws of the State of Nevada on March 21, 2008, merged
      into the Company itself, having the Company as the surviving corporation.
      Therefore, no shareholder approval for the merger and the related name change
      from either the parent or the subsidiary company is required. The change to
      the
      Company’s name is reflected in the Articles of Merger attached herein, filed on
      April 28, 2008 with the State of Nevada. We filed a Current Report on Form
      8-K
      with the Securities and Exchange Commission to report our name change on May
      9,
      2008.




3




In
      connection with our name change, NASDAQ assigned a new symbol to our common
      stock effective May 13, 2008. As a result, our common stock is now quoted on
      the
      National Association of Securities Dealers Over-the-Counter Bulletin Board
      under
      the symbol “RINO”.





*Key
      Man Life Insurance*





Our
      Securities Purchase Agreement requires the Company to obtain key man life
      insurance coverage of $5,000,000 for each of our two founders. This coverage
      has
      been arranged and will take effect as soon as payment can be effected under
      PRC
      foreign exchange regulations. Currently, we expect the payment to be rendered
      within 10 days of this report.





**Results
      of Operations**




***Three
      Months Ended March 31, 2008 and March 31, 2007***





**Results
      of Operations**





***Net
      Sales***





Net
      sales
      increased by $9,255,104 to $19,045,425 or 94.5% for the three months ended
      March
      31, 2008, as compared to the three months ended March 31, 2007. The increase
      in
      first quarter 2008 was due to continued growth in demand across our entire
      product lines except for technical support services which we discontinued in
      the
      first quarter of 2008. The breakdown of the revenue growth is as
      follows:





For the three months ended March 31,2008
            
            2007Net Sales
              000
            
            % to Total
            
            Net Sales
              000
            
            % to Total
            
            % IncreaseWastewater treatment
                equipment
            
            $
            2,178.1
            
            
            11.4
            %
            $
            1,852.5
            
            
            18.9
            %
            
            17.6
            %Flue
                gas desulphurization (including ancillary equipment)
            
            
            12,471.1
            
            
            65.5
            %
            
            3,164.6
            
            
            32.3
            
            
            294.1
            %Anti-oxidation
                equipment and coatings
            
            
            1,648.6
            
            
            8.7
            %
            
            519.8
            
            
            5.3
            
            
            217.2
            %Machining
                service contracts
            
            
            2,747.6
            
            
            14.4
            %
            
            1,652.6
            
            
            16.9
            
            
            66.3
            %Technical
                support services
            
            
            -
            
            
            -
            
            
            2,600.8
            
            
            26.6
            
            
            -100.0
            %Total
                Net Sales
            
            $
            19,045.4
            
            
            100.0
            %
            $
            9,790.3
            
            
            100.0
            %
            
            94.5
            %




*Wastewater
      treatment equipment* .
      Our
      line of wastewater treatment continued to enjoy strong demand in the face of
      increasingly strict environmental enforcement. In the first quarter of 2008,
      we
      executed wastewater treatment equipment contracts in the amount of $2.2 million.
      Our net sales from wastewater treatment for the first quarter of 2008 increased
      17.6% as compared to our net sales from wastewater treatment for the
      corresponding period in 2007. Net sales increased primarily on rising unit
      volumes, as we recorded revenues on two contracts related to 51 water filtration
      canisters in first quarter 2008, versus revenues on one contract related to
      40
      canisters in first quarter 2007. We have orders for an additional approximately
      100 wastewater filtration canisters and related slurry and sludge handling
      equipment, for which the company is in the process of evaluating the scope
      of
      work and complexity of the custom-design for each order in order to fix the
      prices for the contracts.  We estimate the value of these contracts will be
      at least $12.0 million. However, we can not guarantee that these orders will
      become contracts or that we will be paid should our efforts be successful in
      performing the contracts.




4




*Flue
      Gas Desulphurization equipment* .
      Our
      flue gas desulphurization equipment continued to enjoy strong growth in the
      first quarter of 2008 with an increase of 294.1% as compared to that for the
      corresponding period in 2007 as tightening environmental policies required
      increased reductions in emissions of sulfur dioxide. Increased activity in
      desulphurization of sintering operations has attracted competitors, including
      some international providers. This has lead to increased time spent in the
      tendering and negotiation processes, but as of the date of this report we have
      succeeded in one major long-term round of bidding, winning against international
      competitors. In addition to continuing to win bids, we are now
      winning tenders for very large sinters; both the sales volumes and the
      expected gross margins on these products are higher than those of existing
      installations in our current portfolio. Although we have a strong record of
      performance and profitability, with nearly no bad debt, we cannot guarantee
      that
      the contracts won will be successfully executed or that we will be paid should
      our efforts be successful.





*Anti-Oxidation
      Equipment* .
      Our
      anti-oxidation equipment has achieved considerable technical success,
      outperforming our projected reductions in oxidation loss during heat processing
      of hot-rolled steel, one of China’s major steel categories. We installed two
      sets of anti-oxidation equipment in 2007 for two separate customers and have
      signed one additional contract in 2008. During the first three months of 2008
      we
      have focused our sales efforts on desulphurization equipment, and expect to
      continue so in the second quarter, when we expect the new contract activity
      for
      desulphurization equipment for 2008 will slow in keeping with steelmakers’
budgetary cycles. Thus we are planning increased sales activity of
      anti-oxidation equipment and coatings beginning in third quarter 2008. To this
      end, we have already exhibited our working anti-oxidation installations to
      approximately 30 of China’s steelmakers. Although these prospective customers
      have expressed great interest in our anti-oxidation solutions and we have a
      strong record of performance, we cannot guarantee that the contracts won will
      be
      successfully executed or that we will be paid should our efforts be
      successful.





*Machining
      service contracts.* Our
      machining services continued to record strong growth for the three months ended
      Marsch 31, 2008 with an increase of 66.3% as compared to that for the
      corresponding period in 2007. The increase was primarily attributable to the
      increase of service orders and our increased ability to obtain orders with
      higher contract prices because of our reputation, track record and proven
      ability to handle more technically sophisticated and challenging projects.
      In
      addition, we were able to obtain service orders directly from repeat customers
      without having to go through third parties to whom we would be required to
      pay
      commissions and new customers who approached us because of our reputation.
      Although we enjoy good relations with customers of our machining services,
      we
      can offer no assurance of future growth in this product line.





*Technical
      support services* .
      Before
      we had production capacity to manufacture desulphurization equipment, we offered
      technical support services on desulphurization of sinter flue gases to a single
      client. These services were provided in first and second quarters of 2007.
      After
      we obtained manufacturing capacity we discontinued technical support
      services.





*Cost
      of Sales*





The
      cost
      of sales for the three months ended March 31, 2008 increased by $6.4 million
      to
      $11.3 million from $4.9 million for the three months ended March 31, 2007,
      largely due to increased sales. As a percentage of sales, the cost of sales
      rose
      to 59.5% for the three months ended March 31, 2008 compared to 50.0% for the
      same period of 2007. This decline in gross profitability reflects the combined
      effects of changes in product mix, with none of the higher margin services
      revenue recorded in first quarter 2008, and the effects of rising prices of
      steel, one of our primary raw materials. The gross margin achieved in the three
      months ended March 31, 2008 is however within the historical range of the
      Company’s quarterly gross margins.




5




*Operating
      Expense.*





Operating
      expenses for the three months ended March 31, 2008 increased to $2.2 million
      from $1.3 million for the same period ended March 31, 2007. The 65% increase
      in
      our selling, general and administrative expenses was also a result of higher
      levels of operations in 2008 and on increased sales and travel expenses related
      to bidding on higher value-added projects.  Specifically, sales commissions
      rose 86.9% to $952,271 for the three months ended March 31, 2008 from
      $509,563 in the same period in 2007, while expenses related to compliance with
      securities regulators rose to $235,874 in the three months ended March 31,
      2008
      from $0 in the same period in 2007.  Similarly, labor expenses rose to
      $391,473 in the first three months of 2008, a 140.1% increase from the $162,519
      recorded in the first quarter of 2007.  Only consulting expense recorded a
      material fall, dropping 92.3% to $26,646 in the three months ended March 31,
      2008 from $350,425 in the same period in 2007.





*Other
      Income and Expense.*




Our
      other
      income increased to $73,377 for the three months ended March 31, 2008 from
      $0
      for the corresponding period in 2007, which consisted of a government incentive
      prize awarded by the local PRC government to reward Dalian RINO for its
      significant tax contribution as a tax-payer. Our other expenses increased to
      $14,327 for the three months ended March 31, 2008 from $2,623 for the
      corresponding period in 2007, representing an increase of 446.2%. Approximately
      $11,271 of other expenses represents discretionary donations to educational
      scholarships.




Interest
      income rose sharply from a low base as our cash balances increased after raising
      equity capital in October 2007, but the absolute amount of interest income
      remains immaterial. Interest expense fell to $78,704 for the three months ended
      March 31, 2008 from $153,857 for the period ended March 31, 2007, due to a
      reduced amount of bank debt financing as we applied collections of accounts
      receivable in the third and fourth quarters of 2007 to repay bank loans. All
      bank debt that we had outstanding prior to December 31, 2007 was repaid by
      December 31, 2007, however we incurred a short-term bank loan amounted to
      $7,140,000 from one commercial bank in China in January, 2008 with annual
      interest at 7.47%, which will mature in February 2009 and is secured by certain
      buildings, equipment and land use rights. These funds were borrowed to ensure
      adequate working capital to fund rapid growth in orders in the first half of
      2008.





An
      amount
      of $500,000 was recorded for the three months ended March 31, 2008 for
      additional liquidated damages payable under the Securities Purchase Agreement
      relating to the Company’s delay in obtaining an effective registration
      statement. The Company was obligated to make efforts to file a registration
      statement with the SEC for the registration of 5,580,428 shares of Common Stock
      offered by selling stockholders to be declared effective by the SEC on or before
      March 3, 2008. After March 3, 2008 and for each 30-calender day period
      thereafter in which the registration statement fails to be declared effective,
      the Company shall pay liquidated damages to investors equal to 1% of the funds
      raised, or $244,803, subject to a cap of 10% of total funds raised, or total
      liquidated damages of $2,448,032. The registration process is now in its third
      round of questions from the SEC, we can offer no firm assurance as to when
      the
      registration statement will be made effective.





**Liquidity
      and Capital Resources**





We
      have
      historically funded our working capital needs from operations, advance payments
      from customers, bank borrowings, and capital from shareholders. Our working
      capital requirements are influenced by the level of our operations, the
      numerical and dollar volume of our project contracts, the progress of our
      contract execution, and the timing of accounts receivable collections.




6




As
      of
      March 31, 2008, and December 31, 2007, the Company had firm purchase commitments
      of $0 and $750,844, respectively. As compared to December 31, 2007, our firm
      purchase commitments at March 31, 2008 decreased by $750,844 as we completed
      advance arrangements for expansion in production capacity.





*Cash
      and Cash Equivalents*





Cash
      and
      cash equivalents totaled $6.1 million as of March 31, 2008, as compared to
      $7.4
      million as of December 31, 2007, representing a decrease of 16.8%. The decrease
      was attributable to continued investment in accounts receivable, settlement
      of
      income taxes payable, investment in plant, property and equipment, and a rise
      in
      restricted cash, partially offset by falling contracts in progress and advances
      for supplies, and increased notes payable and bank loans.





The
      following tables present our net cash flows for the three months ended March
      31,
      2008 and for the same period ended March 31, 2007.




For the three months ended
              March 31,US$ thousands
            
            2008
            
            2007Cash
                provided by (used in) operating activities
            
            $
            (3,587
            )
            $
            (3,323
            )Cash
                used in investing activities
            
            $
            (2,381
            )
            $
            (710
            )Cash
                provided by financing activities
            
            $
            4,392
            
            $
            692




*Cash
      flow from operating activities.*





Net
      cash used in operating activities was $3,587,245 for the three
      months ended March 31, 2008 as compared to net cash used in operations of
      $3.3 million in the same period ended March 31, 2007. Increased net income
      and
      higher non-cash expenses increased cash flows from operations, as did a sharp
      drop in contracts in progress. These increases to cash flow from operations
      were
      partially offset by increased accounts receivable and by settlement of income
      taxes payable.





*Accounts
      Receivables*





During
      the three months ended March 31, 2008, our accounts receivable rose to $25.3
      million from $20.8 million at December 31, 2007. Of the $20.8 million
      outstanding as of December 31, 2007, approximately $8.9 million, or 42% has
      been
      collected as of March 31, 2008.   As a percentage of total assets, our
      accounts receivable remained steady at 33.9% at March 31, 2008, as compared
      to
      that of 33.5% at December 31, 2007. The level of our receivables reflects the
      combined effect of our growing revenues and our sales to a small number of
      large
      clients, which means that repayment or delay in repayment on even a single
      account can have a disproportionate effect on total receivables in any given
      period. While our growth in receivables is due largely to rising sales, the
      terms of our sales contracts also raise our accounts receivable as revenues
      are
      recorded and accounts receivable increased in accord with our estimates of
      percentage completion, but repayments of accounts receivable are driven solely
      by our contract terms.





Accounts
      receivable as days sales outstanding increased to 125 days as of March 31,
      2008,
      versus days sales outstanding of 119 days as of December 31, 2007. This increase
      is in part due to increased sales revenue and in part due to an increased amount
      of performance retainages under our sales contracts, which call for total
      prepayments of 90% of contract price at equipment commissioning, with a 10%
      performance retainer for one year after commissioning. The total value of these
      10% performance retainages is added to as projects are commissioned and is
      subtracted from as the first anniversary of commissioning passes and the
      retainage is paid to the Company. We track repayments of accounts receivable
      by
      customer but do not track repayments by contract. Accordingly, we estimate
      that
      our accounts receivable balance as of March 31, 2008 contains retainages of
      $2,954,804.




7




Our
      accounts receivable are owed to us by major participants in China’s steel
      sector, these firms receive government policy support and have access to funding
      from China’s banks and in some cases from equity capital markets. Over the
      course of our Company’s operations only *de
      minimis* receivables have been written off. Moreover, our receivables relate largely
      to
      sales of environmental protection equipment, a priority item as China’s
      authorities are now requiring steelmakers to retrofit environmental protection
      solutions. However, regardless of our past experience, we cannot guarantee
      that
      current receivables will be fully collected.





As
      we
      sell almost exclusively to a few significant customers with established credit
      history with us, historically, we have not experienced collection issues,
      therefore we generally do not need to record a reserve for doubtful
      accounts.




*Costs
      and Estimated Earnings in Excess of Billings*





During
      the three months ended March 31, 2008, costs and estimated earnings in
      excess of billings fell to $1.0 million from $2.8 million at December 31,
      2007, due in part to seasonal factors such as Chinese New Year, and the
      budgetary cycle of our major customers, who operate on calendar year
      budgets.  Accordingly, our clients issue requests for
      proposals in December or January, and then spend the first
      quarter evaluating bids and negotiating contracts for work that will
      be performed later in the same year.





*Advances
      for Inventory Purchase*




Advances
      for inventory purchase are required to ensure timely delivery of raw materials
      needed to execute existing production contracts as well as to expand the
      business. Our advances for inventory purchase increase to $14.8
      million at March 31, 2008, an increase of $2.7 million, from the $12.1 million
      recorded at December 31, 2007 as more orders of raw materials were placed for
      production. Of the $12.1 million outstanding as of December 31, 2007,
      approximately $7.3 million, or 60% as been used as of March 31,
      2008.




*Advances
      for Equipment and Construction Material Purchase*




Our
      advances equipment and construction material purchase increase to $6.2 million
      at March 31, 2008, an increase of $2.5 million, from the $3.8 million recorded
      at December 31, 2007. Such increase in advances for equipment and construct
      material purchase was attributable to our expansion in our manufacturing
      capacity and increased business activities.





*Other
      Current Assets*





During
      the three months ended March 31, 2008, our other current assets and prepaid
      expenses rose to $1.7 million from $1.2 million at year-end 2007. The increase
      was caused by our advances to employees and prepaid future operating costs.





*Cash
      used in investing activities.*





For
      the
      three months ended March 31, 2008, net cash used in investing activities
      increased to $2.3 million as compared to $0.7 million for the same period
      ended March 31, 2007. This increase primarily resulted from the purchase of
      property, plant and equipment to be used in capacity expansion.




*Cash
      provided by financing activities.*





Our
      operations historically have been financed by capital contributions and loans
      from Dalian RINO’s founder and by short-term bank loans. For the three months
      ended March 31, 2008, net cash provided by financing activities increased by
      $3.7 million to $4.4 million as compared to $0.7 million for the same period
      ended March 31, 2007. This was principally the result of an increase in
      short-term bank loans in during first quarter 2008.




8




**Contractual
      Obligations**





As
      of
      March 31, 2008, we did not have any long-term debt, capital lease, operating
      lease or other long-term liabilities reflected on our balance sheet under GAAP
      except the following:





As
      of
      March 31, 2008, the Company had firm purchase commitments for capital projects
      in progress of $0, compared with firm purchase commitments of $750,844 at
      December 31, 2007.





**Item
      6. Exhibits**





(a)
            Exhibits





31.1 -
      Certification of Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.





31.2 -
      Certification of Chief Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.





32.1 -
      Certification of Chief Executive Officer and Chief Financial Officer pursuant
      to
      Section 906 of the Sarbanes-Oxley Act of 2002.


9





**SIGNATURES**





Pursuant
      to the requirements of the Securities Act of 1934, the Registrant has duly
      caused this report to be signed on its behalf by the undersigned there unto
      duly
      authorized.





**RINO
                INTERNATIONAL CORPORATION**Date:
                August 1, 2008
            BY:
            /s/
                Bruce
                RichardsonBruce
                RichardsonChief
                Financial Officer




10