1276531--4/8/2010--SCIENTIFIC_ENERGY

related topics

{stock, price, operating}

{operation, international, foreign}

{stock, price, share}

{acquisition, growth, future}

{interest, director, officer}

{competitive, industry, competition}

{customer, product, revenue}

{personnel, key, retain}

{cost, regulation, environmental}

{condition, economic, financial}

Risks Related to the Company s Business We have never been profitable. As a result, we may never become profitable, and, as a result, we could go out of business. If we are not able to obtain adequate funding, we could be required to limit our operations significantly or cease operations entirely . Because we are a small company and do not have much capital, we must limit our operations. A company with limited operations has a smaller opportunity to be successful. Failure to obtain products from outside suppliers could adversely affect our ability to fulfill sales orders to our customers. Demand for our products is affected by general economic conditions and by the cyclical nature of many of the industries we serve, which could cause fluctuations in our sales volumes and results. Our operating results may fluctuate significantly, which makes our future results difficult to predict and could cause our operating results to fall below expectations. If we are unable to compete effectively with our competitors, our profitability and financial condition will be adversely affected. Our success will be dependent upon our management s efforts. We cannot sustain profitability without the efforts of our management. We are subject to regulations that govern the handling of hazardous substances. Risks Related to Doing Business in China Changes in the political and economic policies of China s government may have a significant negative impact upon our business operations. Our executive officer and director are located outside of the U.S. It is difficult to effect service of process and enforcement of legal judgments upon us and our officers and directors. Fluctuations in foreign currency exchange rates may adversely affect our results of operations and financial condition. Risks Related to Investment in the Company s Securities A number of our shareholders own a large percentage of our voting stock and will have a significant influence over matters requiring stockholder approval and could delay or prevent a change in control. There has been low volume and therefore inactive market for our common stock, the stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above your stock purchase price . Because our common stock is deemed a low-priced Penny stock, an investment in our common stock should be considered high risk and subject to marketability restrictions. We have never declared or paid cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future.

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1276531--4/8/2010--SCIENTIFIC_ENERGY_INC