**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**









**FORM
      10-K/A**


**Amendment
      No. 1**





x
            **ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.**




For
      the
      fiscal year ended: December 31, 2007




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: 000-52383


**Fuqi
      International, Inc.**


*(Exact
      name of registrant as specified in its charter)*





**Delaware**
              *(State
                or other jurisdiction of*
              *incorporation
                or organization)*
            **20-1579407**
              *(I.R.S.
                Employer*
              *Identification
                No.)*





**5/F.,
                Block 1, Shi Hua Industrial Zone**
              **Cui
                Zhu Road North**
              **Shenzhen,
                518019**
              **People’s
                Republic of China**
            
            **N/A***(Address
                of principal executive offices)*
            
            *(Zip
                Code)*





REGISTRANT’S
      TELEPHONE NUMBER, INCLUDING AREA CODE: **+86(755)2580-1888**





SECURITIES
      REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:




**Title
                of Each Class**
            **Name
                of Each Exchange on Which Registered**Common
                Stock, $0.001 par value
            NASDAQ
                Global Market





SECURITIES
      REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:




None.




Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act. Yes o  No x





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act. Yes o  No x









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 if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the
      best of registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any
      amendment to this Form 10-K. 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. (Check one):





Large
                accelerated filero
            Accelerated
                fileroNon-accelerated
                filerx
            Smaller
                reporting companyo*(Do
                not check if a smaller reporting company)*





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





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates of the registrant on December 31, 2007 (the last business day
      of
      the registrant’s most recently completed fiscal year), was $80,919,190 based on
      the closing price of the registrant’s common stock on The Nasdaq Global Market
      of $8.30 per share. The registrant’s common stock commenced trading on The
      Nasdaq Global Market on October 23, 2007.




There
      were 20,924,843 shares of common stock outstanding as of March 28,
      2008.





DOCUMENTS
      INCORPORATED BY REFERENCE: None.





*Explanatory
      Note* :
      This
      Form 10-K/A for is being filed in order to complete Part III of Form 10-K filed
      with the Securities and Exchange Commission on March 28, 2008 (the “Original
      Filing”) and fully comply with all required information pursuant to Regulation
      S-K and Section 13 or 15(d) of the Securities Exchange Act of 1934. This
      Amendment contains only the sections to the Original Filing which are being
      amended, and those unaffected parts or exhibits are not included
      herein.













**FUQI
      INTERNATIONAL, INC.**




**TABLE
      OF CONTENTS TO ANNUAL REPORT ON FORM 10-K/A**




**For
      the Fiscal Year Ended December 31, 2007**


**ITEM**
            
            
            
            ******Page****PART
                III**Item
                10.
            
            Directors,
                Executive Officers and Corporate Governance
            
            1Item
                11.
            
            Executive
                Compensation
            
            5Item
                12.
            
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            
            12Item
                13.
            
            Certain
                Relationships and Related Transactions, and Director
                Independence
            
            13Item
                14.
            
            Principal
                Accounting Fees and Services
            
            16**PART
                IV**Item
                15.
            
            Exhibits
                and Financial Statement Schedules
            
            16Signatures
            
            17









i


**PART
      I** **II**




**ITEM
      10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
      GOVERNANCE**




**Directors
      and Executive Officers**





The
      following individuals compose our current board of directors and executive
      officers.





**Name**
            
            **Age**
            
            **Position**Yu
                Kwai Chong
            
            48
            
            President,
                Chief Executive Officer and Chairman of the BoardChing
                Wan Wong
            
            40
            
            Chief
                Financial Officer and DirectorLie
                Xi Zhuang
            
            39
            
            Chief
                Operating Officer and DirectorXi
                Zhou Zhuo
            
            39
            
            Marketing
                DirectorHeung
                Sang Fong
            
            48
            
            Executive
                Vice President of Corporate DevelopmentHon.
                Lily Lee Chen
            
            71
            
            DirectorVictor
                A. Hollander
            
            75
            
            DirectorEileen
                B. Brody
            
            46
            
            DirectorJeff
                Haiyong Liu
            
            45
            
            Director





**Yu
      Kwai Chong**





Mr.
      Yu
      Kwai Chong is the principal founder of our company and has served as President,
      Chief Executive Officer and Chairman of the Board of Directors since April
      2001.
      As the principal founder and Chief Executive Officer, Mr. Chong is dedicated
      to
      develop our company as the leader of the Chinese jewelry industry; in day-to-day
      operations, Mr. Chong is responsible for the strategic planning, marketing
      and
      overall growth of our company. Mr. Chong has significant experience in the
      Chinese jewelry industry, having established the first gold jewelry
      manufacturing and sales company in Shenzhen over 20 years ago. Since January
      1995, Mr. Chong has served as the Chief Executive Officer and Chairman of the
      Board of Directors of Shenzhen Rong Xing (Group) Co., Ltd. Mr. Chong is also
      the
      Permanent Director of the Gems & Jewelry Trade Association of China,
      Permanent Director of the Gems & Jewelry Trade Association of Guangdong and
      Associate President of Shenzhen Gold Jewelry Association. Mr. Chong also
      currently serves as a director at a number of private companies that he owns
      in
      China, including Shenzhen Rongxing (Group) Limited, Shenzhen Xinke Investment
      Co., Ltd.





**Ching
      Wan Wong**





Mr.
      Wong
      has served as our Chief Financing Officer since January 2004. In addition,
      Mr.
      Wong has worked as a tax consultant at the Guandong Yuexin Registered Tax Agent
      Co., Ltd. from April 2002 to the present. From September 2000 to March 2002,
      Mr.
      Wong served as the Finance Director of MindShare China, a communications firm.
      From 1995 to 2000, before serving MindShare, Mr. Wong served as Finance Director
       — China operation for Carat Media Representative (Asia) Limited, a
      multinational media company and Head of Finance — China for a foreign
      invested media company. Mr. Wong received his Bachelor of Business
      Administration in Accounting from the Chinese University of Hong Kong in 1989
      and his Bachelor of Commerce from University of Southern Queensland in 1992.
      He
      is a Certified Practicing Accountant in Australia, Certified Public Accountant
      in Hong Kong, and Certified General Accountant in Canada, and is experienced
      in
      international financial reporting and management.





**Lie
      Xi Zhuang**





Mr.
      Zhuang is a co-founder and has served as our Chief Operating Officer since
      April
      2001 with responsibility for production management and cost control. From 1997
      to 2000, Mr. Zhuang served as the Business Manager of Shenzhen Ping Shen Gold
      and Silver Jewelry Co., Ltd., and from 1993 to 1997, Mr. Zhuang acted as the
      Business Manager of Shenzhen Gao De Gold and Silver Jewelry Company. Mr. Zhuang
      is certified with a Higher Diploma in Management by Hunan Xiang Tan University.




1


**Mr.
      Xi Zhou Zhuo**





Mr.
      Zhuo
      is a co-founder and has served as our Marketing Director since 2001 with
      responsibility for marketing and customer relations management. From 1997 to
      2000, Mr. Zhuo served as the Deputy General Manager of Shenzhen Ping Shen Gold
      and Silver Jewelry Co., Ltd., and from 1993 to 1997, Mr. Zhuo was the Sales
      Manager of Shenzhen GaoDe Gold and Silver Jewelry Company. Mr. Zhuo has over
      15
      years of experience in sales and marketing of jewelry in China.





**Heung
      Sang Fong**





Mr.
      Fong
      has served as the Executive Vice President of Corporate Development of our
      company since December 2006 and is responsible for our corporate development
      program, including investor relations. From January 2004 to November 2006,
      Mr.
      Fong served as the managing partner of Iceberg Financial Consultants, a
      financial advisory firm based in China that advises Chinese clients in capital
      raising activities in the United States. From December 2001 to December 2003,
      Mr. Fong was the Chief Executive Officer of Holley Communications, a Chinese
      company that engaged in CDMA chip and cell phone design. From March 2002 to
      March 2004, he served as Chief Executive Officer of Pacific Systems Control
      Technology, Inc. From May 2001 to November 2001, Mr. Fong was the Director
      of
      Finance of PacificNet, Inc., a customer relationship management, mobile
      internet, e-commerce and gaming technology based in China and listed on the
      Nasdaq Global market. From December 1998 to April 2001, he was the Group
      Financial Controller of Oregon Scientific, a wholly-owned subsidiary of IDT,
      a
      Hong Kong Stock Exchange-listed company. Mr. Fong is a U.S. CPA and has held
      various positions in such capacity with accounting firms in the United States
      and Hong Kong, including Deloitte and Touche, Ernst and Young, and KPMG Peat
      Marwick. Mr. Fong also currently serves as an independent director and audit
      committee member of a Hong Kong public company, Universal Technology Inc.
      (HK:8091). Mr. Fong also serves as a director and audit committee chairman,
      for
      each of Diguang International Development Co., Ltd. (OTCBB: DGNG) and Kandi
      Technology Corp. (NASDAQ-CM: KNDI), both U.S. publicly-traded companies. Mr.
      Fong graduated from the Hong Kong Baptist College with a diploma in History
      in
      1982. He also received an MBA from the University of Nevada at Reno in 1989
      and
      a Masters degree in Accounting from the University of Illinois at Urbana
      Champaign in 1993.





**Hon.
      Lily Lee Chen**





Hon.
      Ms.
      Chen has served as a director since June 2007. She is presently Vice-Chair
      for
      the Asian-Pacific-USA Chamber of Commerce. She is a Commissioner for the
      California Commission on Aging. In 1982, Ms. Chen was elected to the Monterey
      Park City Council. In 1984, she became mayor of Monterey Park, California.
      Hon.
      Ms. Chen’s public service includes positions in: the Advisory Committee on the
      rights Right and Responsibilities of Women, as appointed by President Ford;
      the
      National Advisory Council on Adult Education, as appointed by President Carter;
      California State World Trade Commission as the appointed Assembly Speaker;
      Women
      in the Services (DACOWITS) as an Advisor appointed by Secretary of Defense
      Perry
      and the Board of Governor’s of the East-West Center in Hawaii, as appointed by
      President Clinton and Secretary of State Albright. Hon. Ms. Chen earned her
      bachelor’s degree in communications and a Master’s in social work from the
      University of Washington, Seattle. Ms. Chen began her professional career in
      1964, working for the Los Angeles County where she directed operations, program
      and grants management for numerous County programs. Her responsibilities
      included the management and supervision of a seventy million dollar budget
      and
      over four hundred employees.





**Victor
      A. Hollander**





Mr.
      Hollander, a CPA, has served as a director since June 2007. With nearly 50
      years
      of experience working with privately owned and public SEC reporting companies
      worldwide, Mr. Hollander has been involved in a substantial number of initial
      and secondary public offerings. In addition, he regularly assists companies
      with
      accounting issues relating to public and private offerings and reverse mergers,
      corporate reorganizations and acquisitions, and other fund raising and
      regulatory matters. Mr. Hollander began his public accounting career in 1954
      at
      Joseph S. Herbert & Co., a prominent New York accounting firm. He has
      specialized in capital raises and merger and acquisition matters since 1962
      when
      he started the firm Berger, Turner & Hollander. At this firm, he was the
      audit partner of the first Los Angeles ladies dress manufacturer to go public.
      In 1966, he joined Brout & Company and opened their offices in Los Angeles.
      During this time, he was the audit partner for many public companies listed
      on
      the New York Stock Exchange and the American Stock Exchange. In 1975, he joined
      an international public accounting firm, Lester Witte, as the firm’s Senior
      Securities Partner. In 1978 he formed his own practice, Hollander, Gilbert
&
Company. It was this practice that Mr. Hollander merged, as Managing Director
      of
      the West Coast Group, with Weinberg & Company. Mr. Hollander, after
      attending the University of Illinois, University of California at Los Angeles
      and after completing military service, graduated from California State
      University, Los Angeles in 1958 with a Bachelor of Arts degree in Accounting.
      He
      has served on the Securities, Ethics and Accounting and Auditing Committees
      of
      various organizations, including the American Institute of Certified Public
      Accountants and California State Society of Certified Public Accountants. In
      addition, Mr. Hollander has served as a director, including as Chair of the
      audit committee, of several SEC reporting companies. He currently serves as
      a
      director and member of the audit committee of China Direct, Inc. (AMEX: CDS)
      and
      Micro Imaging Technology, Inc. (OTCBB: MMTC).




2




**Eileen
      B. Brody**





Ms.
      Brody
      has served as a director since June 2007. Since August, 2005, Ms. Brody has
      been
      President of Dawson-Forte Cashmere, an apparel trading company that sources
      the
      majority of their cashmere products from China. From 1997 to 2004, she was
      the
      Vice President of Merchandising and Planning for Carter's Retail division of
      The
      William Carter Company. From 1992 to 1997, she held various management positions
      for Melville Corporation, a multi-billion dollar retailer. From 1983 to 1990,
      Ms. Brody worked for KPMG Peat Marwick in various positions including as a
      Senior Manager. While at KPMG, she was responsible for audit services for a
      diverse clientele of large Fortune 500 companies as well as small publicly
      traded companies and provided due diligence services on a wide variety of
      acquisitions. Ms. Brody is a Certified Public Accountant. She is the recipient
      of the Fitzie Foundation-Harvard Business School award and the 2006 NCCE CO-OP
      Hall of Fame Award. She received her Undergraduate and MBA degrees from Pace
      University and a second MBA from the Harvard Graduate School of Business in
      1992. Ms. Brody is also a member of the board of directors of American Oriental
      Bioengineering Inc. (NYSE: AOB).





**Jeff
      Haiyong Liu**





Jeff
      Haiyong Liu has served as a director of our company since June 2007. Mr. Liu,
      who is a U.S. citizen born in China, is General Manager of DBS (China)
      Investment Ltd., which is a wholly owned subsidiary of Singapore DBS Bank Group
      in China from December 2005 to the present. Prior to joining DBS, Mr. Liu served
      as a Vice President of SIG Group based in Shanghai from June 2000 to November
      2005, where he focused on China Banking and trust and financial services
      opportunities. From January 1994 to September 1995, Mr. Liu worked in a Hong
      Kong based investment firm headquartered in Mainland China and was in charge
      of
      investment business for real estate and capital markets. In 1992, he served
      as
      Director of Securities Dept. of Shaanxi International Trust and Investment
      Corp.
      Ltd. and assisted in bringing the company's stock public in a $40 million public
      offering. Prior to 1992, Mr. Liu was Deputy Manager of International Banking
      Department of China Construction Bank, Shaanxi. Mr. Liu received an MBA from
      Indiana University at Bloomington, majoring in finance. He graduated from
      undergraduate school in 1985 in Xi'an, Shaanxi, majoring in finance.





Our
      directors are elected annually and hold office until their successors have
      been
      elected or qualified or until the earlier of their death, resignation,
      retirement, disqualification or removal.





**Board
      Member Independence**





Subject
      to certain exceptions, under the listing standards of the Nasdaq Global Market,
      within one year of the effectiveness of a registration statement filed with
      the
      Securities and Exchange Commission in connection with a public offering of
      securities, a listed company’s board of directors must consist of a majority of
      independent directors. As a “controlled” company under such listing standards,
      we are not required to comply with this requirement. However, we have determined
      to do so in the interests of good corporate governance and accountability to
      all
      of our stockholders. Our board of directors has determined that four of the
      seven members of our Board of Directors are independent under NASDAQ standards,
      as follows: Hon. Lily Lee Chen, Victor A. Hollander, Eileen B. Brody and Jeff
      Haiyong Liu.





**Family
      Relationships**





There
      are
      no family relationships among the individuals comprising our Board of Directors
      and executive officers.





**Duties
      of Directors**





Under
      Delaware corporate law, our directors have a duty of loyalty to act honestly
      in
      good faith with a view to our best interests. Our directors also have a duty
      to
      exercise care, diligence and skills that a reasonably prudent person would
      exercise in comparable circumstances. In fulfilling their duty of care to us,
      our directors must ensure compliance with our bylaws. A company has the right
      to
      seek damages if a duty owed by our directors is breached.





The
      functions and powers of our board of directors include, among other things:





•
            convening
                shareholders’ meetings and reporting its work to shareholders at such
                meetings;




3




•
            implementing
                shareholders’ resolutions;





•
            approving
                our business plans and investment proposals;





•
            approving
                our profit distribution plans and loss recovery plans;





•
            approving
                our debt and finance policies and proposals for the increase or decrease
                in our registered capital and the issuance of debentures;





•
            approving
                our major acquisition and disposition plans, and plans for merger,
                division or dissolution;





•
            proposing
                amendments to our certificate of incorporation or bylaws; and





•
            exercising
                any other powers conferred by the shareholders’ meetings or under our
                bylaws.





**Board
      Committees**





***Audit
      Committee*** .
      We
      established our audit committee in June 2007. The audit committee consists
      of
      Eileen B. Brody, Victor A. Hollander, and Jeff Haiyong Liu, each of whom is
      an
      independent director. Mr. Hollander, Chairman of the audit committee, and Ms.
      Brody are “audit committee financial experts” as defined under Item 407(d) of
      Regulation S-K. The purpose of the audit committee is to represent and assist
      our board of directors in its general oversight of our accounting and financial
      reporting processes, audits of the financial statements and internal control
      and
      audit functions. Pursuant to our audit committee charter, which was adopted
      by
      our Board of Directors in June 2007, the audit committee’s responsibilities
      include:





•
            The
                appointment, replacement, compensation, and oversight of work of
                the
                independent auditor, including resolution of disagreements between
                management and the independent auditor regarding financial reporting,
                for
                the purpose of preparing or issuing an audit report or performing
                other
                audit, review or attest services.





•
            Reviewing
                and discussing with management and the independent auditor various
                topics
                and events that may have significant financial impact on our company
                or
                that are the subject of discussions between management and the independent
                auditors.





***Compensation
      Committee*** .
      We
      established our compensation committee in June 2007. The compensation committee
      consists of Eileen B. Brody, Victor A. Hollander and Jeff Hiayong Liu, each
      of
      whom is an independent director. Mr. Liu is the Chairman of the compensation
      committee. Pursuant to our compensation committee charter, which was adopted
      by
      our Board of Directors in June 2007, the compensation committee is responsible
      for the design, review, recommendation and approval of compensation arrangements
      for our directors, executive officers and key employees, and for the
      administration of our 2006 Equity Incentive Plan, including the approval of
      grants under the plan to our employees, consultants and directors. The
      compensation committee also reviews and determines compensation of our executive
      officers, including our Chief Executive Officer.





***Nominating
      and Corporate Governance Committee*** .
      We
      established our nominating and corporate governance committee in June 2007.
      The
      nominating and corporate governance committee consists of Hon. Lily Lee Chen,
      Eileen B. Brody and Jeff Haiyong Liu, each of whom is an independent director.
      Eileen B. Brody is the Chairman of the nominating and corporate governance
      committee. Pursuant to our nominating and corporate governance committee
      charter, which was adopted by our Board of Directors in June 2007, the
      nominating and corporate governance committee assists in the selection of
      director nominees, approves director nominations to be presented for stockholder
      approval at our annual general meeting and fills any vacancies on our board
      of
      directors, considers any nominations of director candidates validly made by
      stockholders, and reviews and considers developments in corporate governance
      practices.





**Section
      16(A) Beneficial Ownership Reporting Compliance**





Section
      16(a) of the Exchange Act requires our directors and executive officers to
      file
      reports of holdings and transactions in our stock with the SEC. Based on a
      review of written representations from our executive officers and directors,
      other than (i) a Form 4 for one transaction by each of Ching Wan Wong, Hon.
      Lily
      Lee Chen, Victor A. Hollander, Eileen B. Brody, and Jeff Haiyong Liu, and (ii)
      a
      Form 3 and one transaction on Form 4 of Heung Sang Fong, we believe that during
      the fiscal year ended December 31, 2007, our directors, officers and owners
      of
      more than 10% of our common stock complied with all applicable filing
      requirements.





**Code
      of Business Conduct and Ethics**





Our
      Board
      of Directors has adopted a code of ethics, which is applicable to our senior
      executive financial officers. In addition, our Board of Directors has adopted
      a
      code of conduct, which is applicable to all of our directors, officers and
      employees. We have made our code of ethics and our code of conduct publicly
      available on our website at www.fuqi.com.cn .
      We will
      provide our code of ethics in print without charge to any stockholder who makes
      a written request to: Chief Financial Officer, Fuqi International, Inc., 5/F.,
      Block 1, Shi Hua Industrial Zone, Cui Zhu Road North, Shenzhen, 518019, People’s
      Republic of China. Any waivers of the application and any amendments to our
      code
      of ethics must be made by our board of directors. Any waivers of, and any
      amendments to, our code of ethics will be disclosed promptly on our
      website.




4




**Remuneration**





The
      directors may determine remuneration to be paid to the directors. The
      compensation committee will assist the directors in reviewing and approving
      the
      compensation structure for the directors.




**ITEM
      11. EXECUTIVE COMPENSATION**





**Compensation
      Discussion and Analysis**





***General***





Prior
      to
      completion of our Reverse Merger with VT Marketing Services, Inc. in November
      2006, our Chairman, Chief Executive Officer, and President, Mr. Yu Kwai Chong,
      determined the compensation for our executive officers that was earned and
      paid.
      Prior to the year of 2007, the compensation consisted solely of each executive
      officer’s salary, other than an automobile allowance for Mr. Chong, and none of
      our executive officers received a cash bonus. We believe that the salaries
      paid
      to our executive officers during 2006, 2005, and 2004 were indicative of the
      fair value of the services provided to us, as measured by the local market
      in
      China.





After
      completion of the Reverse Merger, compensation packages for fiscal 2007 were
      proposed by Mr. Chong, and subsequently reviewed and approved by our
      Compensation Committee after its formation in June 2007. In September 2007,
      we
      entered into three-year employment agreements (the “Employment Agreements”) with
      each of our executive officers. The level and components of the compensation
      packages for our executive officers under the Employment Agreements were
      primarily determined based upon comparisons with the compensation packages
      of
      certain public companies in the United States and Hong Kong, in addition to
      the
      compensation packages of private Chinese jewelry companies with which Mr. Chong
      had a relationship and was able to obtain such information. We reviewed and
      evaluated the compensation packages of specialty jewelry manufacturers,
      distributors and retailers, in addition to other Chinese specialty companies
      engaged in the manufacture and distribution of consumer products. As a result
      of
      these criteria, we reviewed the following companies:





•
            *Jewelry
                companies listed in the United States*:
                LJ International, Inc. (NasdaqNM: JADE), Man Sang Holdings, Inc.
                (Amex:
                MHJ), House of Taylor Jewelry, Inc. (NasdaqSC: HOTJ), and Finlay
                Enterprises, Inc. (NasdaqNM:FNLY).





•
            *Hong
                Kong / Chinese jewelry companies*:
                Chow Sang Sang Holdings International Ltd. (SSEHK:116), Luk Fook
                Holdings
                International Ltd. (SSEHK:590), Ming Fung Jewelery Group Limited.
                (SSEHK:860), and Hang Fung Gold Technology Limited (SSEHK:870).





•
            *Hong
                Kong / Chinese companies listed in the United States*:
                Wonder Auto Technology, Inc. (NasdaqNM:WATG — manufacturer of
                automotive electrical parts in China), SORL Auto Parts, Inc.
                (NasdaqNM:SORL — manufacturer and distributor of commercial
                vehicle air brake valves and related components in China and
                internationally), and Orsus Xelent Technologies, Inc.
                (Amex:ORS — designer for retail and wholesale distribution of
                cellular phones).





We
      focused our evaluation and analysis on companies of similar market size and
      stage of growth, while taking into account our relative performance and our
      own
      strategic goals. We believe that the companies that we evaluated are comparable
      to us and provided valuable guidance to us in setting the appropriate levels
      and
      form of compensation for our executive officers. After reviewing the salary
      and
      equity components of compensation from these companies, Mr. Chong proposed
      the
      levels of compensation of our executive officers based upon this information.
      Our Compensation Committee reviewed and approved the compensation packages
      and
      the Employment Agreements, and we subsequently entered into the Employment
      Agreements. The Employment Agreements provide for substantially higher
      compensation packages for our executive officers as compared to previous years.
      The increase in compensation is primarily due to the increased level of
      responsibilities to be assumed by each of these executives after we become
      a
      publicly-listed company. In the future, the Compensation Committee will
      determine compensation packages for our executive officers, which may be based
      upon recommendations or proposals from Mr. Chong or other executive officers.




5




*Employment
      Agreements*




Below
      is
      a summary of the compensation packages to our executive officers under the
      Employment Agreements, each effective as of October 23, 2007.





Yu
      Kwai
      Chong, our Chief Executive Officer, receives an annual salary of $200,000 and
      an
      automobile allowance of approximately $52,000 as well as stock options to be
      granted on an annual basis to acquire shares of the common stock with a market
      value of 2% of our annual profit, approximately, before tax, not exceeding
      $200,000 in value as set forth in our annual report on Form 10-K for the
      relevant period as filed with the SEC. The stock options will have a life of
      10
      years and an exercise price equal to 110% of the fair market value of our common
      stock on the date of the grant.





Ching
      Wan
      Wong, our Chief Financial Officer, receives an annual salary of $160,000 and
      was
      granted, on the effective date of the employment agreement, stock options with
      three-year terms to acquire 600,000 shares of common stock at a per share
      exercise price of $9.00, representing the market value on the date of the grant.
      One-third of the stock options were vested upon the effective date of the
      employment agreement and the remaining two-thirds will vest in two equal annual
      installments over the 24-month period after the date of grant.





Each
      of
      Lie Xi Zhang, our Chief Operating Officer, and Xi Zhou Zhuo, our Marketing
      Director, receives an annual salary of $120,000 and stock options to be granted
      on an annual basis to acquire shares of common stock with a market value of
      1%
      of our annual profit before tax, not exceeding $120,000 in value as set forth
      in
      our annual report on Form 10-K for the relevant period as filed with the SEC.
      The stock options have a life of 10 years and an exercise price equal to 100%
      of
      the fair market value of our common stock on the date of the grant.





Heung
      Sang Fong, our Vice President of Corporate Development, receives an annual
      salary of $120,000 and stock options with three-year terms to acquire 600,000
      shares of common stock at $9.00, representing the market value on the date
      of
      the grant. One-third of the stock options were vested upon the date of grant
      and
      the remaining two-thirds will vest in two equal annual installments over the
      24-month period after the grant date.





***Objectives
      and Components of Executive Compensation***





Our
      Compensation Committee determines compensation for our executive officers with
      the goal of attracting and retaining high quality executive officers and
      encouraging them to work as effectively as possible on our behalf. Compensation
      is designed to reward executive officers for successfully meeting their
      individual functional objectives and for their contributions to our overall
      development. Key areas of corporate performance taken into account in setting
      compensation policies and decisions are profitability, growth of sales, and
      cost
      control. The key factors may vary depending on areas of business in which the
      executive officer’s work is focused on. Compensation for our Chief Executive
      Officer, Chief Operating Officer, and Marketing Director consists of salary
      and
      equity compensation. While salary is a set amount, as described above, the
      equity compensation is directly tied to our performance for each fiscal year.
      Our annual profit before tax will determine the value of options to be granted
      to our Chief Executive Officer, Chief Operating Officer, and Marketing Director.
      We will annually grant to our Chief Executive Officer stock options to acquire
      shares of common stock with a market value of 2% of our annual profit before
      tax, not exceeding $200,000, and a similar grant of options will be made to
      each
      of our Chief Operating Officer and Marketing Director, except that the options
      will be to purchase shares of common stock having a market value of 1% of our
      annual profit before tax, not to exceed $120,000.





Our
      Compensation Committee performs, at least annually, a review of the compensation
      program for our executive officers to determine whether it provides adequate
      incentives and motivation to our executive officers. For officers other than
      our
      Chief Executive Officer, Chief Operating Officer, and Marketing Director, the
      Compensation Committee evaluates profitability, growth of sales, and cost
      control as a measurement of company performance in determining if, and at what
      amounts, stock option grants should be made. Commencing with fiscal 2008, we
      intend to establish a policy of setting company performance targets and budgets
      prior to each fiscal year and then having the Compensation Committee use these
      targets and budgets at the end of the respective fiscal year as a factor in
      determining whether our salary and equity compensation is adequate.





Our
      Compensation Committee, in its annual review, will also determine if our
      compensation is adequate as relative to comparable officers in other companies
      with which we compete for executives. Those companies to be evaluated and
      analyzed will consist of specialty jewelry manufacturers, distributors and
      retailers, in addition to other Chinese specialty companies in the manufacture
      and distribution of consumer products of similar market size and stage of
      growth. The companies may or may not be public companies or companies located
      in
      the PRC or even, in all cases, companies in the jewelry business. The companies
      that the Compensation Committee reviews will include the comparable companies
      listed above. In addition, the Compensation Committee will review other
      companies of a size, scope and magnitude similar to us at the time of our
      Compensation Committee conducts its annual review, which may include companies
      not currently listed or reporting. We believe that the companies that our
      Compensation Committee evaluates are comparable to us and can provide valuable
      guidance to us in determining whether the levels and forms of compensation
      for
      our executive officers are adequate. Based on its review of these companies,
      the
      Compensation Committee will determine the compensation packages for our
      executive officers for the relevant fiscal year.




6




The
      primary elements of compensation of our executive officers are salary and stock
      option grants. We do not have formal policies relating to the allocation of
      total compensation among salary and stock options. However, we believe that
      certain senior executive positions such as Chief Executive Officer, Chief
      Operating Officer, and Marketing Director have a more direct influence over
      our
      financial performance. As such, a greater portion of their compensation should
      be at-risk based on company performance. Compensation arrangements established
      in September 2007 for these positions are more heavily weighted on incentive
      compensation. As indicated above, our Chief Executive Officer, Chief Operating
      Officer, and Marketing Director will be granted stock options on an annual
      basis
      that have a market value, not to exceed a pre-determined amount, that is based
      on our annual profit before tax as set forth in our annual report on Form 10-K
      as filed with the SEC for the respective fiscal year. Other positions that
      we
      believe have less of a direct influence over our financial performance, such
      as
      Chief Financial Officer and Vice President of Corporate Development, will
      receive stock options that are not based on financial performance.





***Salary***





Salary
      is
      designed to attract, as needed, individuals with the skills necessary for us
      to
      achieve our business plan, to motivate those individuals, to reward those
      individuals fairly over time, and to retain those individuals who continue
      to
      perform at or above the levels that we expect. When setting and adjusting
      individual executive salary levels, we consider the relevant established salary
      range, the named executive officer’s responsibilities, experience, potential,
      individual performance and contribution. We also consider other factors such
      as
      our overall corporate budget for annual merit increases, unique skills, demand
      in the labor market and succession planning. Such factors were considered when
      the compensation packages under the Employment Agreements were created and
      approved.





***Equity
      Compensation***





We
      believe that long-term performance is aided by the use of stock-based awards,
      which we believe create an ownership culture among our named executive officers
      that fosters beneficial, long-term performance by our company. We adopted the
      Fuqi International, Inc. 2007 Equity Incentive Plan (“2007 EIP”) on October 22,
      2007. The 2007 EIP has a total of 2,366,864 shares of common stock available
      for
      grant under the plan.





We
      believe the 2007 EIP provides our employees, including our named executive
      officers, as well as our directors and consultants, with incentives to help
      align their interests with the interests of stockholders. The Compensation
      Committee believes that the use of stock-based awards promotes our overall
      executive compensation objectives and expects that stock options will become
      a
      significant source of compensation for our executives.





We
      do not
      have a general equity grant policy with respect to the size and terms of option
      grants, but our Compensation Committee will evaluate our achievements for the
      fiscal year based on performance factors and results of operations such as
      revenues generated, cost of revenues, and net income. We do not currently have
      established quantitative targets. Commencing with fiscal 2008, we intend to
      establish a policy of setting company performance targets and budgets prior
      to
      each fiscal year and then having the Compensation Committee use these targets
      and budgets at the end of the respective fiscal year as a factor in determining
      if, and at what amount, a stock option grant should be made to each of our
      executive officers. We expect our established targets and budgets to be
      challenging yet achievable by our company and executive officers. In addition,
      we expect to set a minimum threshold for stock option grants at a certain
      percentage of the target and budget, yet to be determined. Based on the target
      and budget goals, the Compensation Committee will have discretion in determining
      what stock option grants are appropriate for the fiscal year.





We
      also
      conduct an annual evaluation of the achievement level of an executive based
      on
      individual performance measurements, such as contribution to the achievement
      of
      the company’s goals and individual performance metrics based on their positions
      and responsibilities. Stock options will generally be made at the end of each
      fiscal year.





As
      indicated above, our Chief Executive Officer, Chief Operating Officer, and
      Marketing Director were granted stock option grants that have a market value,
      not to exceed a pre-determined amount, that is based on our annual profit before
      tax as set forth in our annual report on Form 10-K as filed with the SEC for
      the
      respective fiscal year. In addition, our Chief Financial Officer and Vice
      President of Corporate Development each received 600,000 stock options at a
      per
      share exercise price of $9.00 with a three-year term, with one-third vesting
      upon the date of grant and the remaining two-thirds vesting in two equal annual
      installments over the 24-month period after the date of grant. We believe that
      our Chief Financial Officer and Vice President of Corporate Development played
      pivotal roles in the planning, execution, and completion of our recent public
      offering that was completed on the date of grant and the stock options were
      intended to reward them for such contributions and the vesting schedule is
      intended to encourage continued contributions in the near future.




7




As
      permitted under the 2007 EIP, we expect that the vesting schedule for option
      grants will differ in light of the purpose for the option grant. The option
      grants to our Chief Financial Officer and Vice President of Corporate
      Development, as described above, have shorter vesting schedules to reward them
      for contributions to our public offering and encourage continued contributions
      in the near future. The Compensation Committee will determine the vesting
      schedule of option grants and tie the vesting schedule to the purpose of the
      grant. For example, we expect to have extended vesting schedules for normal
      option grants to provide incentives for long-term performance.





**Summary
      Compensation Table**





The
      following table sets forth information concerning the compensation for the
      three
      fiscal years ended December 31, 2007, 2006, and 2005 of the principal executive
      officer, principal financial officer, in addition to, as applicable, our three
      most highly compensated officers whose annual compensation exceeded $100,000,
      and up to two additional individuals for whom disclosure would have been
      required but for the fact that the individual was not serving as our executive
      officer at the end of the last fiscal year (collectively, the “Named Executive
      Officers”).


**Name
                  and Position**
              
              **Year**
              
              **Salary**
                **($)**
              
              **Bonus**
                **($)**
              
              **Options**
                Award
                **($)**
              
              **All
                  Other**
                Compensation
                **($)**
              
              **Total**
                **($)**Yu
                  Kwai Chong
              
              
              2007
              
              
              56,050
              (1)
              
              
              —
              
              
              
              —
              
              
              $
              31,400
              (2)(3)
              
              
              87,450President,
                  CEO and
                Chairman
                  of the Board
              
              
              2006
              
              
              7,384
              
              
              
              —
              
              
              
              —
              
              
              
              31,400
              (2)(3)
              
              
              38,7842005
              
              
              5,000
              
              
              
              —
              
              
              
              —
              
              
              
              31,400
              (2)(3)
              
              
              36,400Ching
                  Wan Wong
              
              
              2007
              
              
              87,450
              (4)
              
              
              87,941
              (5)
              
              $
              321,392
              (6)
              
              
              —
              
              
              
              496,783Chief
                  Financial Officer
              
              
              2006
              
              
              56,410
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              56,4102005
              
              
              8,000
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              8,000Heung
                  Sang Fong(7)
              
              
              2007
              
              
              76,154
              
              
              
              —
              
              
              
              321,392
              (6)
              
              
              —
              
              
              
              397,546Executive
                  Vice
                President
                  of
              
              
              2006
              
              
              5,026
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              5,026Corporate
                  Development
              
              
              2005
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —




______


(1)
            Effective
                October 23, 2007, Mr. Chong’s annual salary was increased to
                $200,000.(2)
            Excludes
                dividends paid to Mr. Chong, as the sole stockholder of Fuqi’s subsidiary,
                totaling $0, $2,739,726, and $5,421,687, during the years ended December
                31, 2007, 2006, and 2005, respectively.(3)
            We
                acquired a new company car costing approximately $157,000 for the
                use of
                Mr. Chong in 2005. The value of the car is being amortized over 5
                years.(4)
            Effective
                October 23, 2007, Mr. Wong’s annual salary was increased to
                $160,000.(5)
            Represents
                a one-time discretionary bonus of $89,941 in connection with the
                exercise
                of Series C Plan and Series E Plan warrants in June 2007. We provided
                a
                notice of redemption, and upon expiration of the call period on June
                8,
                2007, warrants had been exercised for a total of 579,138 shares of
                our
                common stock for total gross proceeds from conversion of $2,931,357;
                all
                other remaining Series C Plan and Series E Plan warrants expired
                unexercised.(6)
            Valuation
                based on the amount of option grants recognized for financial statement
                reporting purposes pursuant to SFAS 123(R). The assumptions used
                with
                respect to the valuation of option grants are set forth in our Annual
                Report under Item 8 “Fuqi International, Inc. Consolidated Financial
                Statements—Notes to Financial Statements—Note 1— Summary of Significant
                Accounting Policies—Stock Based
                Payments.”


(7)
              Mr.
                  Fong joined the Company in December
                  2006.




8


**Grants
      of Plan-Based Awards in 2007**




The
      following table summarizes our awards made to our named executive officers
      under
      the 2007 Equity Incentive Plan.





**Grant
                Date**
            
            **Number
                of Shares of Common Stock Underlying Options**
            
            **Exercise
                of Base Price of the Options Award ($/Sh)**
            
            **Grant
                date of Fair Value of Stock and Options Awarded**Yu
                Kwai Chong
            
            
            --
            
            
            --
            
            
            --
            
            
            --Ching
                Wan Wong
            
            
            10/26/07
            
            
            600,000
            (1)
            $
            9.00
            (2)
            $
            826,436
            (3)Heung
                Sang Fong
            
            
            10/26/07
            
            
            600,000
            (1)
            $
            9.00
            (2)
            $
            826,436
            (3)





(1)
            Valuation
                assumptions are found in our Annual Report for the year ended December
                31,
                2007 under Item 8 “Fuqi International, Inc. Consolidated Financial
                Statements —Notes to Financial Statements—Note 1—Summary of Significant
                Accounting Policies—Stock-Based Payments.”(2)
            Equal
                to the per share offering price of our shares of common stock in
                our
                initial public offering that closed on October 26,
                2007.(3)
            One-third
                of the stock options were vested on date of grant and the remaining
                two-thirds will vest in two equal annual installments over the 24-month
                period after the date of grant.





9


**Outstanding
      Equity Awards at Fiscal Year-End**





The
      following table presents the outstanding equity awards held by each of the
      named
      executive officers as of the fiscal year ended December 31, 2007.




Option
                AwardsName
            
            Number
                of
              securities
              underlying
              unexercised
              options
                (#)
              exercisable
            
            Number
                of
              securities underlying
                unexercised options (#) unexercisable
            
            Equity incentive
                plan awards: Number of securities underlying unexercised
                unearned options (#)
            
            Option exercise
                price ($)
            
            Option
              expiration dateYu
                Kwai Chong
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —Ching
                Wan Wong(1)
            
            
            200,000
            
            
            400,000
            
            
            —
            
            $
            9.00
            
            
            10/26/2010Heung
                Sang Fong(1)
            
            
            200,000
            
            
            400,000
            
            
            —
            
            $
            9.00
            
            
            10/26/2010






(1)
            One-third
                of the stock options were vested upon dated of grant and the remaining
                two-thirds will vest in two equal annual installments over the 24-month
                period after the date of grant.





**Option
      Exercises and Stock Vested in Fiscal 2007**





There
      were no option exercises or stock vested in 2007.





**Director
      Compensation**





For
      the
      year ended December 31, 2006, none of the members of our Board of Directors
      received compensation for his or her service as a director. In June 2007, we
      adopted a director compensation policy. We currently pay our non-employee
      directors the following compensation:





•
            *Base
                Annual Board Service Fee*:
                Each independent director is paid $5,000 per quarter (or $20,000
                annually).





•
            *In-Person
                Board Meeting Fee*:
                Each independent director is paid $2,000 for in-person attendance
                at each
                in-person board meeting. No fees are paid for telephonic meetings
                or
                telephonic attendance at in-person board meetings.





•
            *Base
                Annual Committee Service Fee*:
                Each member of the compensation committee receives $2,000 annually
                and
                each member of the audit committee receives $2,500 annually for committee
                service. In addition, the chairman of the audit committee receives
                $3,000
                annually.





•
            *Expenses*:
                Each director receives expense reimbursement for reasonable travel
                for
                in-person board and committee meeting attendance.





10


Independent
      directors are eligible to receive, from time to time, grants of options to
      purchase shares under our 2007 Equity Incentive Plan as determined by the board
      of directors.




Name
            
            Fees
                Earned or Paid in Cash
              ($)
            
            Stock
                Awards
              ($)
            
            Option
              Awards
              ($)(1)
            
            Non-Equity
                Incentive Plan Compensation ($)
            
            Change
                in Pension Value and Nonqualified Deferred Compensation Earnings
            
            All
                Other Compensation
              ($)
            
            Total
              ($)Hon.
                Lily Lee Chen
            
            
            10,000
            
            
            -
            
            $
            14,804
            
            
            -
            
            
            -
            
            
            -
            
            
            24,804Victor
                A. Hollander
            
            
            13,750
            
            
            -
            
            $
            14,804
            
            
            -
            
            
            -
            
            
            -
            
            
            28,554Eileen
                B. Brody
            
            
            12,250
            
            
            -
            
            $
            14,804
            
            
            -
            
            
            -
            
            
            -
            
            
            27,054Jeff
                Haiyong Liu
            
            
            12,250
            
            
            -
            
            $
            14,804
            
            
            -
            
            
            -
            
            
            -
            
            
            27,054


______


(1)
            At
                the closing of our public offering in October 2007, the Board granted
                ten-year stock options to each independent director to purchase 30,000
                shares of our common stock, at an exercise price equal to $9.00 per
                share,
                with 15,000 shares vest immediately and the remaining 15,000 shares
                to
                vest in equal quarterly installments over one year from the date
                of the
                grant. Valuation based on the amount of option grants recognized
                for
                financial statement reporting purposes pursuant to SFAS 123(R). The
                assumptions used with respect to the valuation of option grants are
                set
                forth in our Annual Report under Item 8 “Fuqi International, Inc.
                Consolidated Financial Statements—Notes to Financial Statements—Note 1—
                Summary of Significant Accounting Policies—Stock Based
                Payments.”




**Equity
      Incentive Plans**





We
      adopted the Fuqi International, Inc. 2007 Equity Incentive Plan (“2007 EIP”) in
      October 2007. We had a 2006 Equity Incentive Plan (“2006 EIP”), which we
      canceled and terminated immediately prior to the adoption of the 2007 EIP.
      Summaries of the pertinent provisions of both the 2006 EIP and 2007 EIP appear
      below.





***2006
      Equity Incentive Plan (terminated in 2007)***





In
      November 2006, our stockholders approved an equity incentive plan (“2006 EIP”)
      for employees, non-employee directors and other service providers covering
      1,775,148 shares of common stock. Any options granted under the 2006 EIP may
      have been either “incentive stock options,” as defined in Section 422A of the
      Internal Revenue Code, or “nonqualified stock options,” subject to Section 83 of
      the Internal Revenue Code, at the discretion of our board of directors and
      as
      reflected in the terms of the written option agreement. We cancelled and
      terminated the 2006 EIP on October 22, 2007. There are no options outstanding
      under the 2006 EIP.





***2007
      Equity Incentive Plan (adopted in 2007)***





We
      adopted the 2007 EIP in October 2007. Our employees, officers and directors
      (including employees, officers and directors of our affiliates) are all eligible
      to participate in the 2007 EIP. Administration of the 2007 EIP is carried out
      by
      our Board of Directors or any committee of the Board of Directors to which
      the
      Board of Directors has delegated all or a portion of responsibility for the
      implementation, interpretation or administration of the equity incentive plan.
      The administrator of the 2007 EIP will select the participants who are granted
      stock options or stock awards and, consistent with the terms of the equity
      incentive plan, will establish the terms of each stock option or stock award.
      The maximum period in which a stock option may be exercised will be fixed by
      the
      administrator, but in no event longer than ten years.





The
      2007
      EIP authorizes the issuance of options to purchase shares of common stock under
      the Option Grant Program and the grant of stock awards under the Stock Issuance
      Program. Although the administrator determines the exercise prices of options
      granted under the 2007 EIP, the exercise price per share may not be less than
      100% of the “fair market value,” as defined in the equity incentive plan, on the
      date of grant. Options that are granted under the equity incentive plan vest
      and
      terminate over various periods at the discretion of the Board of Directors
      or
      any committee authorized by the Board of Directors, but subject to the terms
      of
      the plan. Under the Stock Issuance Program, shares of our common stock may
      be
      issued through direct and immediate issuance without any intervening options
      grants.





The
      2007
      EIP will terminate upon the earliest of (i) the expiration of the ten year
      period measured from the date we adopt the plan, (ii) the date on which all
      shares available under the plan have been issued as vested shares, or (iii)
      the
      termination of all outstanding options in connection with a change in our
      ownership or control. Nevertheless, options granted under the 2007 EIP may
      extend beyond the date of termination. Under the 2007 EIP, the maximum number
      of
      shares of common stock that may be subject to stock options or stock awards
      is
      2,366,864. There were 1,320,000 options, each exercisable at $9.00 per share,
      outstanding under the 2007 EIP as of December 31, 2007.




11




**Indemnification
      of Directors and Executive Officers and Limitations of Liability**





In
      December 2006, we changed our state of incorporation from Nevada to Delaware
      and
      we are now governed by Delaware law and the certificate of incorporation and
      bylaws of the new Delaware corporation. Under Section 145 of the General
      Corporation Law of the State of Delaware, we can indemnify our directors and
      officers against liabilities they may incur in such capacities, including
      liabilities under the Securities Act of 1933, as amended (the “Securities Act”).
      Our certificate of incorporation provides that, pursuant to Delaware law, our
      directors shall not be liable for monetary damages for breach of the directors’
fiduciary duty of care to us and our stockholders. This provision in the
      certificate of incorporation does not eliminate the duty of care, and in
      appropriate circumstances equitable remedies such as injunctive or other forms
      of non-monetary relief will remain available under Delaware law. In addition,
      each director will continue to be subject to liability for breach of the
      director’s duty of loyalty to us or our stockholders for acts or omissions not
      in good faith or involving intentional misconduct or knowing violations of
      the
      law, for actions leading to improper personal benefit to the director, and
      for
      payment of dividends or approval of stock repurchases or redemptions that are
      unlawful under Delaware law. The provision also does not affect a director’s
      responsibilities under any other law, such as the federal securities laws or
      state or federal environmental laws.





Our
      bylaws provide for the indemnification of our directors to the fullest extent
      permitted by the Delaware General Corporation Law. Our bylaws further provide
      that our Board of Directors has discretion to indemnify our officers and other
      employees. We are required to advance, prior to the final disposition of any
      proceeding, promptly on request, all expenses incurred by any director or
      executive officer in connection with that proceeding on receipt of an
      undertaking by or on behalf of that director or executive officer to repay
      those
      amounts if it should be determined ultimately that he or she is not entitled
      to
      be indemnified under the bylaws or otherwise. We are not, however, required
      to
      advance any expenses in connection with any proceeding if a determination is
      reasonably and promptly made by our Board of Directors by a majority vote of
      a
      quorum of disinterested Board members that (i) the party seeking an advance
      acted in bad faith or deliberately breached his or her duty to us or our
      stockholders and (ii) as a result of such actions by the party seeking an
      advance, it is more likely than not that it will ultimately be determined that
      such party is not entitled to indemnification pursuant to the applicable
      sections of our bylaws.





We
      have
      been advised that in the opinion of the Securities and Exchange Commission,
      insofar as indemnification for liabilities arising under the Securities Act
      may
      be permitted to our directors, officers and controlling persons pursuant to
      the
      foregoing provisions, or otherwise, such indemnification is against public
      policy as expressed in the Securities Act and is therefore unenforceable. In
      the
      event a claim for indemnification against such liabilities (other than our
      payment of expenses incurred or paid by our director, officer or controlling
      person in the successful defense of any action, suit or proceeding) is asserted
      by such director, officer or controlling person in connection with the
      securities being registered, we will, unless in the opinion of our counsel
      the
      matter has been settled by controlling precedent, submit to a court of
      appropriate jurisdiction the question of whether such indemnification by us
      is
      against public policy as expressed in the Securities Act and will be governed
      by
      the final adjudication of such issue.





We
      may
      enter into indemnification agreements with each of our directors and officers
      that are, in some cases, broader than the specific indemnification provisions
      permitted by Delaware law, and that may provide additional procedural
      protection. As of the Effective Time of the Reverse Merger, we had not entered
      into any indemnification agreements with our directors or officers, but may
      choose to do so in the future. Such indemnification agreements may require
      us,
      among other things, to:





•
            indemnify
                officers and directors against certain liabilities that may arise
                because
                of their status as officers or directors;





•
            advance
                expenses, as incurred, to officers and directors in connection with
                a
                legal proceeding, subject to limited exceptions; or





•
            obtain
                directors’ and officers’ insurance.





At
      present, there is no pending litigation or proceeding involving any of our
      directors, officers or employees in which indemnification is sought, nor are
      we
      aware of any threatened litigation that may result in claims for
      indemnification.




12




**ITEM 12.**
            **SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS**




Beneficial
      ownership is determined in accordance with the rules of the SEC. In computing
      the number of shares beneficially owned by a person and the percentage of
      ownership of that person, shares of common stock subject to options and warrants
      held by that person that are currently exercisable or become exercisable within
      60 days of April 25, 2008 are deemed outstanding even if they have not actually
      been exercised. Those shares, however, are not deemed outstanding for the
      purpose of computing the percentage ownership of any other person.





The
      following table sets forth certain information with respect to beneficial
      ownership of our common stock based on 20,924,843 issued and outstanding shares
      of common stock as of April 25, 2008, by:




•
            Each
                person known to be the beneficial owner of 5% or more of the outstanding
                common stock of our company;





•
            Each
                executive officer;





•
            Each
                director; and





•
            All
                of the executive officers and directors as a group.





Unless
      otherwise indicated, the persons and entities named in the table have sole
      voting and sole investment power with respect to the shares set forth opposite
      the stockholder’s name, subject to community property laws, where applicable.
      Unless otherwise indicated, the address of each stockholder listed in the table
      is c/o Fuqi International, Inc., 5/F., Block 1, Shi Hua Industrial Zone, Cui
      Zhu
      Road North, Shenzhen, 518019, People’s Republic of China.





**Name
                and Address of**
              **Beneficial
                Owner**
            
            **Title**
            
            **Number
                of**
              **Shares**
              **Beneficially**
              **Owned**
            
            **Percent
                of Class**
              **Beneficially
                Owned*****Directors
                and Executive Officers***Yu
                Kwai Chong
            
            President,
                Chief Executive
              Officer
                and Chairman
              of
                the Board
            
            11,175,543
            
            53.4%Lie
                Xi Zhuang
            
            Chief
                Operating Officer and
              Director
            
            —
            
            —Ching
                Wan Wong
            
            Chief
                Financial Officer and
              Director
            
            200,000(1)
            
            *Xi
                Zhou Zhuo
            
            Marketing
                Director
            
            —
            
            —Heung
                Sang Fong
            
            Executive
                Vice President,
              Corporate
                Development
            
            200,000(1)
            
            *Hon.
                Lily Lee Chen
            
            Director
            
            22,500(1)
            
            *Eileen
                B. Brody
            
            Director
            
            22,500(1)
            
            *Victor
                A. Hollander
            
            Director
            
            22,500(1)
            
            *Jeff
                Haiyong Liu
            
            Director
            
            22,500(1)
            
            *Officers
                and Directors as a group
              (total
                of 9 persons)
            
            
            
            11,665,543(2)
            
            53.4%


_______


*
            Indicates
                less than 1%.


(1)
            Consists
                of shares of common stock underlying options that are currently
                exercisable or exercisable within 60 days of April 25,
                2008.


(2)
            Includes
                490,000 shares of common stock underlying options that are currently
                exercisable or exercisable within 60 days of April 25,
                2008.




13




**ITEM
        13.**  **CERTAIN
        RELATIONSHIPS AND RELATED TRANSACTIONS**
 
 **Fuqi
        BVI Share Exchange Agreement**


On
      November 20, 2006, Fuqi BVI effected the Reverse Merger by entering into a
      share
      exchange agreement with VT Marketing Services, Inc. (“VT”) and Mr. Yu Kwai
      Chong, who is our current Chief Executive Officer and Chairman of the Board
      of
      the Directors. Pursuant to the Reverse Merger, Mr. Chong, as the sole
      shareholder of Fuqi BVI, agreed to exchange all of his shares of Fuqi BVI for
      shares of VT and VT agreed to acquire all of the issued and outstanding capital
      stock of Fuqi BVI. VT was formed as part of the implementation of a Chapter
      11
      reorganization plan of visitalk.com, Inc., which became effective on September
      17, 2004. The Reverse Merger closed on November 22, 2006 and VT issued an
      aggregate of 11,175,543 shares of common stock in exchange for all of the issued
      and outstanding securities of Fuqi BVI. Upon the close of the Reverse Merger,
      VT
      became the 100% parent of Fuqi BVI and assumed the operations of Fuqi BVI and
      its subsidiary as its sole business. We issued to Mr. Yu Kwai Chong, who was
      the
      sole Fuqi BVI stockholder, 11,175,543 shares of common stock in exchange for
      all
      of the issued and outstanding shares of capital stock of Fuqi BVI. The new
      shares issued to Mr. Chong represented 91.2% of our voting capital stock
      immediately after the Reverse Merger. Mr. Chong is also the Chairman of Fuqi
      BVI
      and our Chief Executive Officer and Chairman of the Board. Prior to the
      effective date of the Reverse Merger, Bay Peak LLC (“Bay Peak”) beneficially
      owned substantially all of our capital stock. Bay Peak currently owns
      approximately 3.8% of our issued and outstanding shares of common
      stock.





**Transactions
      with Bay Peak**





On
      July
      21, 2006, VT Marketing Services Inc. (“VT”), the predecessor of Fuqi
      International, Inc., sold 809,918 shares of common stock to Bay Peak, of which
      5,184 shares were subsequently cancelled upon the close of the Reverse Merger.
      The shares issued to Bay Peak represented 75% of the outstanding shares of
      VT at
      that time. Cory Roberts, the President of Bay Peak and former President of
      VT,
      resigned from VT upon the closing of the Reverse Merger on November 22, 2006.





On
      May 2,
      2007, we entered into a letter agreement with Bay Peak to assist us in the
      potential exercise of outstanding Series C Plan Warrants and Series E Plan
      Warrants (the “Warrants”). We issued a notice of redemption on May 10, 2007
      pursuant to which the Warrants would be redeemed on June 8, 2007. Pursuant
      to
      the letter agreement, Bay Peak provided advisory services with respect to the
      redemption and potential exercise of the Warrants prior to the redemption.
      We
      agreed to pay Bay Peak an advisory fee of $10,000, a bonus fee of 6% of the
      gross proceeds from the exercise of the Warrants (approximately $178,000) and
      out-of-pocket expenditures of $10,000.





Further
      to a registration rights agreement with Bay Peak, we agreed to register shares
      of our common stock held by it upon request after the expiration of the 180-day
      lock-up period commencing from the date of the initial public offering if we
      are
      then eligible to use Form S-3 and if such shares are not then saleable under
      Rule 144.





**Yu
      Kwai Chong**





Mr.
      Yu
      Kwai Chong, who is our controlling stockholder, President, Chief Executive
      Officer and Chairman of the Board, has conducted various related party
      transactions with our company in the past. These transactions include the
      following:





•
            During
                the period from the inception of Fuqi China in April 2001 until November
                22, 2006, when Mr. Chong ceased to be our sole stockholder, Mr. Chong
                collected a portion of our revenues directly from our customers as
                the
                primary contact with our customers. During the years ended December
                31,
                2007, 2006 and 2005, our total net sales amounted to $0, $92.4 million,
                and $72.6 million, and the amounts collected by Mr. Chong totaled
                $0, $3.0
                million, and $6.1 million, respectively. Beginning December 2006,
                Mr.
                Chong stopped collecting cash revenue on behalf of our company and
                all
                revenues are now deposited into our bank accounts. The revenues collected
                by Mr. Chong were included in the total revenue amounts in our audited
                consolidated financial statements for the years ended December 31,
                2007,
                2006, and 2005.





•
            Prior
                to December 31, 2006, Mr. Chong frequently borrowed from us since
                the
                inception of our operations to fund personal liquidity needs. As
                of
                December 31, 2006, we permanently discontinued this practice and
                Mr. Chong
                repaid the balance to us in full. On aggregate, we loaned $0, $51.5
                million, and $90.0 million to Mr. Chong, and collected $0, $58.4
                million,
                and $75.6 million, during the years ended December 31, 2007, 2006,
                and
                2005, respectively. Outstanding balance due from Mr. Chong to us
                was $nil
                as of December 31, 2007 and 2006.





•
            We
                have frequently borrowed from Mr. Chong since the inception of our
                operations to satisfy our short-term working capital needs. On aggregate,
                we borrowed $0, $23.5 million, and $0, from Mr. Chong and repaid
                $0, $23.1
                million, and $0 during the years ended December 31, 2007, 2006, and
                2005.
                Outstanding loans payable to Mr. Chong amounted to $0 and $422,909
                as of
                December 31, 2007 and 2006,
                respectively.





•
            Prior
                to the Reverse Merger, we declared dividends to Mr. Chong, as our
                sole
                stockholder, totaling $0, $2.7 million, and $5.4 million during the
                years
                ended December 31, 2007, 2006, and 2005, respectively, which offset
                the
                amounts due from Mr. Chong.




14




•
            Rong
                Xing (Group) Co., LTD., a company owned and controlled by Mr. Chong,
                guarantees and provides real property to secure loan facilities that
                we
                have taken with several banks. The guarantee is provided at no charge
                to
                us.




We
      did
      not charge any interest on receivable from nor pay any interest on amount due
      to
      related parties.





**Heung
      Sang Fong**





Our
      current Executive Vice President of Corporate Development, Heung Sang Fong,
      was
      the managing partner of Iceberg Financial Consultants (“IFC”), a financial
      advisory firm based in China that advises Chinese clients in capital raising
      activities in the United States. In April 2006, IFC was engaged to assist in
      the
      Reverse Merger between Fuqi BVI, Mr. Yu Kwai Chong, and VT Marketing Services,
      Inc. The Reverse Merger closed in November 2006. For the year ended December
      31,
      2006, we paid IFC a total of $0 in compensation for its services.





**Ching
      Wan Wong**





Our
      Chief
      Financial Officer, Ching Wan Wong was paid a one-time discretionary bonus of
      $89,941 in connection with the exercise of Series C Plan and Series E Plan
      warrants in June 2007. We provided a notice of redemption, and upon expiration
      of the call period on June 8, 2007, warrants had been exercised for a total
      of
      579,138 shares of our common stock for total gross proceeds from conversion
      of
      $2,931,357; all other remaining Series C Plan and Series E Plan warrants expired
      unexercised.





**Policy
      for Approval of Related Party Transactions**





Our
      policy is to have our Audit Committee review and pre-approve any related party
      transactions and other matters pertaining to the integrity of management,
      including potential conflicts of interest, or adherence to standards of business
      conduct as required by our policies.





15


**ITEM
      14.**  **PRINCIPAL
      ACCOUNTING FEES AND SERVICES.**




The
      following table presents fees, including reimbursements for expenses, for
      professional audit services rendered by Stonefield Josephson, Inc. for the
      audits of the Company’s annual financial statements and interim reviews of the
      Company’s quarterly financial statements for the years ended December 31, 2007
      and December 31, 2006 and fees billed for other services rendered by Stonefield
      Josephson, Inc. during those periods.







**Year
                ended December 31,****2007**
            
            **2006**Audit
                Fees(1)
            
            $
            305,950
            
            $
            161,155Audit-Related
                Fees(2)
            
            
            152,150
            
            
            10,770Tax
                Fees(3)
            
            
            23,700
            
            
            -All
                Other Fees
            
            
            -
            
            
            -Total
            
            $
            481,800
            
            $
            171,925


____


(1)
            *Audit
                Fees*consist of fees billed for professional services rendered for the
                audit of
                the Company's consolidated annual financial statements and review
                of the
                interim consolidated financial statements included in quarterly reports
                and services that are normally provided by Stonefield Josephson,
                Inc. in
                connection with statutory and regulatory filings or
                engagements.


(2)
            *Audit-Related
                Fees*consist of fees billed for assurance and related services that are
                reasonably related to the performance of the audit or review of the
                Company's consolidated financial statements and are not reported
                under
                "Audit Fees." (3)
            *Tax
                Fees*consist of fees billed for corporate tax return preparation for the
                years
                ended December 31, 2006, 2005 and
                2004.





**Pre-Approval
      Policies and Procedures**





Under
      the
      Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our
      auditors must be approved in advance by our audit committee to assure that
      such
      services do not impair the auditors’ independence from us. In accordance with
      its policies and procedures, our audit committee pre-approved the audit service
      performed by Stonefield Josephson, Inc. for our consolidated financial
      statements as of and for the year ended December 31, 2007. As our audit
      committee was formed only in June 2007, there was no such pre-approval by our
      audit committee before Stonefield Josephson, Inc. performed their audit in
      years
      2006.





**PART
      IV**




**ITEM
      15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**





3.
      Exhibits: The exhibits listed in the accompanying “Index to Exhibits” are filed
      or incorporated by reference as part of this Form 10-K/A.





16


**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized, in the City of Shenzhen, People’s
      Republic of China, on April 29, 2008.


**FUQI
                INTERNATIONAL, INC.**By:
            /s/
                Yu Kwai ChongName
                Yu Kwai ChongTitle:
                Chief Executive Officer and
                President




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the Company in the capacities
      and on the dates indicated.




SIGNATURE
            
            TITLE
            
            DATE/s/
                Yu Kwai Chong
            
            Chief
                Executive Officer and President (Principal
              Executive
                Officer)
            
            April
                29, 2008Yu
                Kwai Chong/s/
                Ching Wan Wong
            
            Chief
                Financial Officer and Director (Principal
              Financial
                Officer and Accounting Officer)
            
            April
                29, 2008Ching
                Wan Wong*
            
            Chief
                Operating Officer and Director
            
            April
                29, 2008Lie
                Xi Zhuang*
            
            Director
            
            April
                29, 2008Hon.
                Lily Lee Chen*
            
            Director
            
            April
                29, 2008Eileen
                B. Brody*
            
            Director
            
            April
                29, 2008Victor
                A. Hollander*
            
            Director
            
            April
                29, 2008Jeff
                Haiyong Liu


____





*By:
            
            /s/    Yu
                Kwai ChongYu
                Kwai Chong, Attorney-in-FactApril
                29, 2008


17





**EXHIBIT
      INDEX**





**Exhibit
                Number**
            
            **Description
                of Exhibit**2.1
            
            Share
                Exchange Agreement dated November 20, 2006 by and between Fuqi
                International, Inc., a Delaware corporation (f/k/a VT Marketing Services,
                Inc.) (the “Registrant”) and Fuqi International Holdings Ltd., a British
                Virgin Islands company (incorporated by reference from Exhibit 2.1
                to the
                Registrant’s Form 10 filed with the Securities and Exchange Commission on
                December 29, 2006).3.1
            
            Certificate
                of Incorporation of the Registrant (incorporated by reference from
                Exhibit
                3.1 to the Registrant’s Form 10 filed with the Securities and Exchange
                Commission on December 29, 2006).3.1(a)
            
            Amendment
                of the Certificate of Incorporation of the Registrant dated February
                21,
                2007 to increase authorized shares (incorporated by reference from
                Exhibit
                3.1(a) to the Registrant’s Form S-1/A (file no. 333-144290) filed with the
                Securities and Exchange Commission on August 28, 2007).3.2
            
            Bylaws
                of the Registrant (incorporated by reference from Exhibit 3.2 to
                the
                Registrant’s Form 10 filed with the Securities and Exchange Commission on
                December 29, 2006).4.1
            
            Specimen
                Common Stock Certificate (incorporated by reference from Exhibit
                4.1 to
                the Registrant’s Form S-1/A (file no. 333-144290) filed with the
                Securities and Exchange Commission on July 2, 2007).10.1
            
            Plan
                Warrant Agreement (incorporated by reference from Exhibit 10.1 to
                the
                Registrant’s Form 10 filed with the Securities and Exchange Commission on
                December 29, 2006).10.2
            
            2006
                Equity Incentive Plan (incorporated by reference from Exhibit 10.2
                to the
                Registrant’s Form 10 filed with the Securities and Exchange Commission on
                December 29, 2006).10.3
            
            Real
                Property Lease dated May 8, 2005 (incorporated by reference from
                Exhibit
                10.3 to the Registrant’s Form 10 filed with the Securities and Exchange
                Commission on December 29, 2006).10.4
            
            Employment
                Agreement dated August 30, 2007 entered into by and between the Company
                and Yu Kwai Chong (incorporated by reference from Exhibit 10.1 to
                the
                Registrant’s Form 8-K filed with the Securities and Exchange Commission on
                September 6, 2007).10.5
            
            Employment
                Agreement dated August 30, 2007 entered into by and between the Company
                and Ching Wan Wong (incorporated by reference from Exhibit 10.2 to
                the
                Registrant’s Form 8-K filed with the Securities and Exchange Commission on
                September 6, 2007).10.6
            
            Employment
                Agreement dated August 30, 2007 entered into by and between the Company
                and Lie Xi Zhuang (incorporated by reference from Exhibit 10.3 to
                the
                Registrant’s Form 8-K filed with the Securities and Exchange Commission on
                September 6, 2007).10.7
            
            Employment
                Agreement dated August 30, 2007 entered into by and between the Company
                and Heung Sang Fong (incorporated by reference from Exhibit 10.4
                to the
                Registrant’s Form 8-K filed with the Securities and Exchange Commission on
                September 6, 2007).10.8
            
            Employment
                Agreement dated August 30, 2007 entered into by and between the Company
                and Xi Zhou Zhuo (incorporated by reference from Exhibit 10.5 to
                the
                Registrant’s Form 8-K filed with the Securities and Exchange Commission on
                September 6, 2007).10.9
            
            Registration
                Rights Agreement dated September 18, 2007 entered into by and between
                the
                Company and Bay Peak, LLC (incorporated by reference from Exhibit
                10.9 to
                the Registrant’s Form S-1/A (file no. 333-144290) filed with the
                Securities and Exchange Commission on October 2,
                2007).




18




**Exhibit
                Number**
            
            **Description
                of Exhibit**


10.10
            
            Maximum
                General Facility Agreement dated September 27, 2007 entered into
                by and
                between the Company and Agriculture Bank of China (incorporated by
                reference from Exhibit 10.10 to the Registrant’s Form S-1/A (file no.
                333-144290) filed with the Securities and Exchange Commission on
                October
                2, 2007).10.11
            
            2007
                Equity Incentive Plan (incorporated by reference from Exhibit 99.1
                to the
                Registrant’s Form S-1/A (file no. 333-144290) filed with the Securities
                and Exchange Commission on August 28, 2007).10.12
            
            Form
                of Notice of Grant of Stock Option for the 2007 Equity Incentive
                Plan
                (incorporated by reference from Exhibit 99.2 to the Registrant’s Form
                S-1/A (file no. 333-144290) filed with the Securities and Exchange
                Commission on August 28, 2007).10.13
            
            Form
                of Stock Option Agreement (including Addendum) for the 2007 Equity
                Incentive Plan (incorporated by reference from Exhibit 99.3 to the
                Registrant’s Form S-1/A (file no. 333-144290) filed with the Securities
                and Exchange Commission on August 28, 2007).10.14
            
            Form
                of Stock Issuance Agreement (including Addendum) for the 2007 Equity
                Incentive Plan (incorporated by reference from Exhibit 99.4 to the
                Registrant’s Form S-1/A (file no. 333-144290) filed with the Securities
                and Exchange Commission on August 28, 2007).10.15
            
            Form
                of Stock Purchase Agreement (including Addendum) for the 2007 Equity
                Incentive Plan (incorporated by reference from Exhibit 99.5 to the
                Registrant’s Form S-1/A (file no. 333-144290) filed with the Securities
                and Exchange Commission on August 28, 2007).10.16**
            
            Lease
                agreement dated October 10, 2007 for office space in San Jose,
                California.10.17**
            
            Lease
                agreement dated February 20, 2008 for office space in Hong
                Kong.10.18
            
            Asset
                Purchase Agreement dated April 18, 2008 entered into between the
                Fuqi
                International Holdings Co., LTD., Beijing Yinzhong Tianmei Jewelry
                Co.,
                LTD., Shanghai Tianmei Jewelry Co., LTD., and Chujian Huang (incorporated
                by reference from Exhibit 10.1 to the Registrant’s Current Report on Form
                8-K filed with the Securities and Exchange Commission on April 21,
                2008)10.19
            
            Intellectual
                Property Transfer Agreement dated April 18, 2008 entered into between
                the
                Registrant, the Fuqi International Holdings Co., LTD., and Chujian
                Huang
                (incorporated by reference from Exhibit 10.2 to the Registrant’s Current
                Report on Form 8-K filed with the Securities and Exchange Commission
                on
                April 21, 2008).21.1
            
            List
                of Subsidiaries of the Registrant (incorporated by reference from
                Exhibit
                21.1 to the Registrant’s Form 10 filed with the Securities and Exchange
                Commission on December 29, 2006).31.1
            
            Certification
                of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation
                S-K,
                as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.31.2
            
            Certification
                of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation
                S-K,
                as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1*
            
            Certifications
                of Chief Executive Officer and Chief Financial Officer pursuant to
                18
                U.S.C. Section 1350 as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.







*  This
      exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities
      Exchange Act of 1934 or otherwise subject to the liabilities of that section,
      nor shall it be deemed incorporated by reference in any filing under the
      Securities Act of 1933 or the Securities Exchange Act of 1934, whether made
      before or after the date hereof and irrespective of any general incorporation
      language in any filings.


**  Previously
      filed.




19