1273385--3/25/2010--Nutrastar_International

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{operation, international, foreign}

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{product, market, service}

{product, liability, claim}

{personnel, key, retain}

{interest, director, officer}

{stock, price, operating}

{provision, law, control}

{property, intellectual, protect}

{condition, economic, financial}

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{operation, natural, condition}

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{acquisition, growth, future}

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{cost, operation, labor}

RISKS RELATED TO OUR BUSINESS The recent financial crisis could negatively affect our business, results of operations, and financial condition. Our current business is significantly based on a single product, Chinese Golden Grass, which currently accounts for over 78.7 percent of our revenues, and we may not be able to general significant revenue if this product fails. We may not be able to grow and harvest sufficient Cordyceps Militaris to satisfy our production requirements and any decline in the amount or quality of Cordyceps Militaris could reduce our sales and negatively affect our results of operations, financial condition and business prospects. Our sales and reputation may be affected by product liability claims, litigation, product recalls, or adverse publicity in relation to our products. We compete in an industry that is brand-conscious, and unless we are able to establish and maintain brand name recognition our sales may be negatively impacted. We compete in an industry characterized by rapid changes in consumer preferences, so our inability to continue developing new products to satisfy our consumers' changing preferences would have a material adverse effect on our sales volumes. Expansion of our business may put added pressure on our management and operational infrastructure impeding our ability to meet any potential increased demand for the products that we sell and possibly hurting our future operating results. Due to our rapid growth in recent years, our past results may not be indicative of our future performance and evaluating our business and prospects may be difficult. We depend heavily on key personnel, and turnover of key employees and senior management could harm our business. Our inability to protect our trademarks, patent and trade secrets may prevent us from successfully marketing our products and competing effectively. 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 do not carry any business interruption insurance, third-party liability insurance for our production facilities or insurance that covers the risk of loss of our products in shipment. We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business. RISKS RELATED TO DOING BUSINESS IN CHINA Adverse changes in political and economic policies of the PRC government could impede the overall economic growth of China, which could reduce the demand for our products and damage our business. Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us. If we are found to have failed to comply with applicable laws, we may incur additional expenditures or be subject to significant fines and penalties. The PRC government exerts substantial influence over the manner in which we must conduct our business activities. Restrictions on currency exchange may limit our ability to receive and use our sales revenue effectively. Fluctuations in exchange rates could adversely affect our business and the value of our securities. Restrictions under PRC law on our PRC subsidiaries' ability to make dividends and other distributions could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to you, and otherwise fund and conduct our businesses. Under the New EIT Law, we may be classified as a resident enterprise of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders. If the China Securities Regulatory Commission, or CSRC, or another PRC regulatory agency determines that CSRC approval is required in connection with the reverse acquisition of New Resources, the reverse acquisition may be unwound, or we may become subject to penalties. If we do not fulfill our obligation to pay the transfer price for the equity interest of Heilongjiang Shuaiyi, then we may be subject to fines and prohibitions imposed by relevant PRC authorities that could have a material adverse effect on our business. The M A Rule establishes more complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China. The implementation of the new PRC employment contract law and increases in the labor costs in China may hurt our business and profitability. Any outbreak of the Swine Flu (H1N1), severe acute respiratory syndrome, or SARS, the Avian Flu, or another widespread public health problem in the PRC could adversely affect our operations. You may have difficulty enforcing judgments against us. RISKS RELATED TO THE MARKET FOR OUR STOCK GENERALLY Our common stock is quoted on the OTC Bulletin Board which may have an unfavorable impact on our stock price and liquidity. The market price of our common stock is volatile, leading to the possibility of its value being depressed at a time when you may want to sell your holdings. We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock. Certain provisions of our Articles of Incorporation may make it more difficult for a third party to effect a change-of-control.

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1273385--3/25/2010--Nutrastar_International_Inc.