753224--6/29/2010--China_Nutrifruit_Group

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{customer, product, revenue}

{stock, price, operating}

{property, intellectual, protect}

{personnel, key, retain}

{product, liability, claim}

{acquisition, growth, future}

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RISKS RELATED TO OUR BUSINESS The recent financial crisis could negatively affect our business, results of operations, and financial condition. Any ill effects, product liability claims, recalls, adverse publicity or negative public perception regarding particular fruits we use as raw materials, our products or our industry in general could harm our sales and cause consumers to avoid our products. Any fluctuations in raw material supply and prices may negatively impact our revenue. If we cannot maintain a consistent and cost-effective supply of source fruits, our results of operations, financial condition and business prospects will deteriorate. 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. We rely primarily on third-party distributors, which could affect our ability to efficiently and profitably distribute and market our products, maintain our existing markets and expand our business into other geographic markets. We generally do not have long-term agreements with our distributors, and we may need to spend significant time and incur significant expense in attracting and maintaining key distributors. Failure to execute our business expansion plan could adversely affect our financial condition and results of operations. Because we experience seasonal fluctuations in our sales, our quarterly results will fluctuate and our annual performance will depend largely on results from three quarters. 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. The concentration of ownership of our securities by our controlling stockholders who do not participate in the management of our business can result in stockholder votes that are not in our best interests or the best interests of our minority stockholders. 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 have limited insurance coverage and 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. PRC food hygiene and safety laws may become more onerous, which may adversely affect our operations and financial performance and lead to an increase in our costs which we may be unable to pass on to our customers. Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us. You may have difficulty enforcing judgments against 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. 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 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 subsidiary s 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. Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident stockholders to personal liability, limit our ability to acquire PRC companies or to inject capital into PRC subsidiaries, limit our PRC subsidiary's ability to distribute profits to us or otherwise materially adversely affect us. 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 Fezdale or challenges the delayed payment of acquisition consideration by Solar Sun, the reverse acquisition may be unwound, or we may become subject to penalties. 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. We face uncertainty from the Circular on Strengthening the Administration of Enterprise Income Tax on Non-resident Enterprises Share Transfer ( Circular 698 ) released in December 2009 by China's State Administration of Taxation (SAT), effective as of January 1, 2008. Under the Enterprise Income Tax 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. RISKS RELATED TO THE MARKET FOR OUR STOCK GENERALLY 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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753224--6/29/2010--China_Nutrifruit_Group_LTD