1099977--4/1/2008--CHINA_MARINE_FOOD_GROUP

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RISKS RELATED TO OUR BUSINESS We are dependent on the supply of fresh seafood in our production of processed seafood products and disruptions in the supply of fresh seafood could adversely affect our business operations. Our profitability will be affected by fluctuations in the prices of our major raw materials. We are dependent on five major customers. In the event any one of these major customers ceases to purchase or reduce their purchases from us, and we are unable to secure new contracts, our sales will be adversely affected. We are dependent on five major suppliers for our raw materials. In the event we are no longer able to secure raw materials from these suppliers and are unable to find alternative sources of supply at similar or more competitive rates, our operations and profitability will be adversely affected. A significant portion of our business activities is transacted in cash and our internal controls in relation to cash management may not be able to address all the risks associated with the handling of cash and cash transactions. Our profitability and continued growth is dependent on our ability to yield commercially viable products, to enhance our product range and expand our customer base. Since we do not have long-term contracts with our suppliers and customers there is no guarantee that our suppliers will continue to supply us with raw materials, or that our customers will continue to purchase our products. We may be exposed to potential risks relating to our internal controls over financial reporting and our ability to have those controls attested to by our independent auditors We currently lack an independent board of directors, which may result in the approval of transactions and policies without independent review. There is no assurance that we will be able to execute our future plans successfully, or that our future plans will result in commercial success. Changes in consumer preferences or discretionary consumer spending could adversely impact our results. Our business activities are subject to certain laws and regulations and our operations may be affected if we should fail to have in force the requisite licenses and permits. Our processed seafood products may be illegally tampered with such that they are rendered unfit for consumption and have to be recalled and destroyed. Product or raw material deterioration will lead to loss of sales, higher costs, negative publicity, and payment of compensation to our customers and/or product liability claims. Outbreak of disease or widespread contamination in any of the raw materials that we use in our production or any food scares may lead to a loss in consumer confidence and reduce the demand for our processed seafood products. Any failure to meet health and hygiene standards may result in the suspension of licenses, accreditations or the loss of our ability to import and export our products. Our chartering agreements with owners of fishing vessels may be prematurely terminated, making it difficult for us to carry out our business operations. We bear the risk of loss in shipment of our products and have no insurance to cover such loss We are dependent on our Executive Directors and Executive Officers. Any loss in their services without suitable replacement may adversely affect our operations. We are dependent on our customers ability to maintain and expand their sales and distribution channels. Should these distributors be unsuccessful in maintaining and expanding their distribution channels, our results of operations will be adversely affected. Failure to compete effectively in a competitive environment may affect our profitability. Any outbreak of earthquake, tsunami, adverse weather or oceanic conditions or other calamities may result in disruption in our operations and could adversely affect our sales. We are in the business of processing, distributing and selling processed seafood products and marine catch. Thus, a dramatic reduction in fish resources may adversely affect our business. We are exposed to the credit risk of our customers which may cause us to make larger allowances for doubtful trade receivables or incur bad debt write-offs. We may be subject to foreign exchange risk and may incur losses arising from exchange differences upon settlement. Our products and brand name may be replicated or counterfeited which will in turn have an adverse effect on our Company and we may be affected by intellectual property rights disputes. RISKS RELATED TO DOING BUSINESS IN CHINA Our operations in the PRC are subject to the laws and regulations of the PRC and any changes in the laws or policies of the PRC may have a material impact on our operations and financial performance. Introduction of new laws or changes to existing laws by the PRC government may adversely affect our business if stricter regulations are imposed on the overseas business practices of PRC companies PRC foreign exchange control may limit our ability to utilize our cash effectively and affect our ability to receive dividends and other payments from our PRC subsidiaries. Our subsidiaries, operations and significant assets are located outside the U.S. Shareholders may not be accorded the same rights and protection that would be accorded under the Securities Act. In addition, it could be difficult to enforce a U.S. judgment against our Directors and officers. We are subject to the PRC's environmental laws and regulations and in the event stricter rules are imposed to protect the environment, we may have to incur higher costs to comply with such rules. The outbreak of avian influenza and/or other communicable diseases, if uncontrolled, could affect our financial performance and prospects. Changes in China s political or economic situation could harm us and our operating results The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. Government action in the future may require us to divest ourselves of any interest we hold in Chinese properties. Future inflation in China may inhibit our ability to conduct business in China. Restrictions on currency exchange may limit our ability to receive and use our revenues effectively. The value of our securities will be affected by the foreign exchange rate between U.S. dollars and Renminbi. RISKS RELATED TO THE MARKET FOR OUR STOCK Pengfei Liu will have significant influence over the outcome of matters submitted to Shareholders for approval. Our share price may be volatile, which can result in substantial losses for investors who purchase our common stock. Additional funds raised through issue of new shares for our future growth will dilute Shareholders equity interests. Negative publicity may adversely affect our share price. Our common stock is quoted on the OTC Bulletin Board which may have an unfavorable impact on our stock price and liquidity. Certain provisions of our Amended Articles of Incorporation may make it more difficult for a third party to effect a change- in-control.

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1099977--4/1/2008--CHINA_MARINE_FOOD_GROUP_LTD