Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On August 23, 2012, SmartHeat Inc., a Nevada corporation (the "Company"), received a notice from the staff of NASDAQ's Listing Qualifications Department (the "Staff"), which stated that "the Staff has determined to apply more stringent criteria," to the Company and, accordingly, to delist the Company's securities pursuant to the Staff's broad discretionary authority under Listing Rule 5101. The Staff in its letter stated that it has concerns "regarding the Company's solvency, viability, operational structure and suitability for listing." The Company strongly disagrees with the Staff's delisting determination, including its application of "more stringent criteria," which the Company believes is unwarranted. The Company plans to request a hearing before the NASDAQ Listing Qualifications Panel (the "Panel") to appeal the Staff's determination which will stay any action until the Panel renders a decision subsequent to the hearing.

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