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Item 1. Business

2011-03-31 compared with 2010-04-15 · 359 added, 589 removed, 46 unchanged (95% of the section changed)

Overview of Our Business

We are engaged in the sale and distribution of various fruits

and vegetables in the Peoples Republic of China, or the PRC.

To date, almost

all of our revenues have been generated by sales of the following products:

Emperor bananas;

Tangerine oranges.

Historically, Fuji apples have been our main profit centers,

comprising 87% and 85% of our revenues in 2008 and 2009, respectively.

bananas and tangerine oranges have been the only other products that have

generated meaningful revenues for us to date.

Our growth strategy for 2010 and

2011 is to increase sales of our current products and to develop a new line of

higher margin green foods, to begin selling our products through our green foods

distribution hub and to export our products to new markets both within the PRC

and internationally.

Our Growth Strategy

We plan to expand our business by internal growth over the next

several years by pursuing a growth strategy that includes:

Increasing Sales of our Current Products and Developing a

New Line of Higher Margin Green Foods

Our short-term goal is to increase sales of our existing

With respect to our apples, bananas and oranges, our plan is to

continue to increase the number of farmers from whom we purchase these products

pursuant to our agreements with various farming cooperatives in the PRC.

believe that a steady supply of fruits is crucial to our future success.

Currently, we have built strong relationships with three plantation bases in

Shaanxi, Guangdong, and Guangxi Provinces.

We intend to further strengthen our

existing cooperative relationships with our plantation bases and to expand our

supply sources by securing more first priority purchase rights with cooperatives

across China.

In addition, our plan for the future is to invest in a larger

processing line and packing house, which would include the construction of our

own cold storage facilities to enable us to sell greater volumes of high quality

Fuji apples throughout the year.

With respect to our vegetables, our plan is to

increase sales of our deep processed vegetables that we believe will increase

our revenues and gross margin.

In addition, our long-term goal is to sell green foods

agriculture products, including fruits, vegetables, rice, meat, eggs and oil

that have been certified as green foods by the Green Food Development Center

under the PRC Ministry of Agriculture.

Green foods are healthy and

environmentally friendly whose profit margins are expected to be significantly

higher than our current products.

We are in the process of constructing a new

hub in the Guangdong wholesale market.

We believe that our hub will be the first

hub in the PRC to provide wholesale customers with the ability to purchase such

a wide variety of green foods from one distributor in one location.

distributors who purchase from our hub will sell our products to customers in

various regions in the PRC and to the Pearl River Delta, including Hong Kong and

Macao, thereby potentially providing us with a larger market and significant

Selling Products Directly to Supermarkets and

Our current sales depend almost exclusively on wholesale

distributors that purchase our products from our leased space in the Guangdong

and Beijing wholesale markets, and who in turn sell these products to

supermarkets or other retail stores located in neighboring regions in the PRC.

goal is to supply a substantial portion our fruit products directly from our

plantation bases to supermarkets and other retail stores in the PRC, which would

reduce our transportation costs and generate higher profit margins for our

We have initiated discussions with several retail stores to whom we may

be able to sell our products in the near future.

However, there is no assurance

that we will be able to enter into agreements with these entities on terms

favorable to us, if at all.

Our plan is to distribute our higher margin

processed vegetables directly to these retail customers so as to increase gross

Distributing and Exporting Products to New

To date, all of our products have been sold to a limited number

of regions in the PRC.

Our goal is to expand our domestic distribution network

and distribute our products to other regions in the PRC and to export our

products to various foreign countries, including East Timor, Indonesia, Hong

Kong SAR, Macao SAR, and Australia.

In early 2010, we entered into a cooperation

agreement with certain business representatives in East Timor.

Pursuant to this

agreement, the representatives will assist us in marketing the various green

foods we intend to sell to this region.

We intend to export certain of our

products to East Timor beginning in 2010.

We anticipate that sales of our

products to East Timor will generate significantly higher margins than domestic

In addition, we have entered into an agreement with a distributor in

Australia pursuant to which we will sell green foods to this distributor once we

have developed our green foods.

Our Corporate History and Structure

Corporate History and Share Exchange

We were incorporated under the laws of the State of Virginia in

May 1948 as Henry County Plywood Corporation.

We were originally formed for the

purchase, sale, lease and manufacture of lumber, and other wood products.

reincorporated in Nevada on March 18, 2008.

From July 2004 until January 15,

2009, we were a shell company with no operations and our sole purpose was to

consummate a merger or acquisition with a private operating company.

Organic Region Group Limited, or Organic Region, was

incorporated in the BVI on January 30, 2003.

On January 15, 2009, we completed a

reverse acquisition transaction with Organic Region, whereby we issued to the

shareholders of Organic Region 81,648,554 shares of our common stock, par value

$0.001 per share, in exchange for 100% of the issued and outstanding capital

stock of Organic Region.

As a result of the reverse acquisition transaction, we

now conduct our operations in the PRC through subsidiaries and related

Organizational Chart

The following chart reflects our organizational structure as of

the date of this report:

Variable Interest Entity

In 2005, Organic Region entered into exclusive arrangements

with Guangzhou Greenland Co., Ltd., or Guangzhou Greenland, an individual

business entity incorporated in Guangdong Province, PRC on July 20, 2004.

Guangzhou Greenland is the operating company for our wholesale fruits and

vegetables business.

Xiong Luo, our chief operating officer, is the owner

and holder of the business license for Guangzhou Greenland.

Pursuant to these arrangements, Organic Region has agreed to

provide consulting services, including business operations, human resources and

research and development services necessary for Guangzhou Greenland to operate

its wholesale fruit and vegetable distribution business in China.

for such services, Mr.

Luo agreed to pay a consulting services fee to Organic

Region equal to all of the revenues obtained by Guangzhou Organic.

Organic Region obtained the right to substantially influence Guangzhou

Greenlands daily operations and financial affairs, appoint its senior

executives and approval all matters requiring shareholder approval.

irrevocably granted the Company an exclusive option to purchase, to the extent

permitted under PRC law, all or part of the equity interests in Guangzhou

Greenland and agreed to entrust all voting power to a person designated by

Organic Region.

Guangzhou Greenland is considered a variable interest entity,

and its financial statements are included in our consolidated financial

Organic Region is a holding company which owns 100% of the

following entities:

Zhuhai Organic Region Modern Agriculture Ltd., or Zhuhai

Organic, and Guangzhou Organic Region Agriculture Ltd., or Guangzhou Organic,

are wholly foreign-owned entities which were formed in the PRC on November 13,

2003 and August 20, 2004, respectively.

Fuji Sunrise International Enterprises Limited,

or Fuji Sunrise, and Southern International Development Limited, or Southern,

were formed in the British Virgin Islands on March 6, 2008 and March 5, 2008,

respectively.

HK Organic Region Limited, or HK Organic, was formed in Hong Kong

on February 4, 2008.

The following table sets forth a description of each of the

entities in our corporate structure, including the relationship between us and

each entity and the nature of the business conducted by each entity.

Through our Chinese operating subsidiaries, we are primarily engaged in the wholesale distribution, marketing and sales of high-value fruits and vegetables at two main wholesale markets in Guangdong Province and North China.

To date, almost all of our revenues have been generated by sales of Fuji apples, which accounted approximately 83% of our revenues in 2010 and approximately 85% of our revenues in 2009, and emperor bananas and tangerine oranges.

We purchase our products directly from farming cooperative groups on plantations in three Chinese provinces of Shaanxi, Guangdong, and Guangxi and we distribute our products to other regions almost exclusively through the wholesale markets.

At these markets our customers include trading agents who purchase fruit from us and sell to their own customers.

Although we make some direct sales, these sales are not significant.

We also provide the farming cooperatives with varying degrees of farming, harvesting and marketing services.

We have recently introduced a line of vegetable products, which we prepare for shipping and distribution to end users.

Our proposed distribution hub consists of two buildings, which have a total of approximately 600,000 square feet of floor space, and a 130,000 square foot cold storage facility, all in the Guangdong Yuncheng wholesale market in Guangzhou, which we plan to use for the distribution of foods which we believe are high-quality foods.

We plan to use the cold storage facility for storage of our apples.

We believe that our hub will be the first hub in the PRC to provide wholesale and retail customers with the ability to purchase a wide variety of high quality foods in one location.

All of the buildings, which were leased, have been constructed, although the two buildings in the distribution hub still require interior construction and decoration as well as equipment before we can use them.

We paid for the construction of one of the buildings and the cold storage facility.

We issued our common stock in February 2011 as payment for the construction of the other building.

Through December 31, 2010, we had paid approximately $14.2 million in cash toward the exterior as well as some of the interior construction of this hub using cash generated by our operations and from funds which we raised in late 2009 and 2010.

Pursuant to the terms of our lease for the hub, the landlord had the obligation to construct the facility, but we were required to advance funds to the landlord for the construction.

We anticipate that the total investment to launch this business will be $32.4 million, which includes construction costs of approximately $27.4 million, with approximately $3 million for auxiliary facilities, such as refrigerated trucking capabilities and air conditioning, and $2 million for initial inventory of new premium imported products.

The construction costs includes the approximately $8.4 million which was paid through the issuance of common stock in February 2011.

Commencing in the first quarter of 2010, we began to export food products, with our initial export sales being made to Australia.

To date, revenue from exports has not constituted more than a nominal portion of our revenue.

We are a Nevada corporation, organized under the name Henry County Plywood Corporation, in March 2008, as the successor to a Virginia corporation of the same name which was organized in May 1948.

We changed our corporate name to Sino Green Land Corporation on March 23, 2009.

We are the sole shareholder of Organic Region Group Limited (“Organic Region”), a British Virgin Islands company organized on January 30, 2003.

Organic Region is the sole shareholder of Zhuhai Organic Region Modern Agriculture Ltd., a wholly foreign-owned entity, known as a WFOE, Guangzhou Organic Region Agriculture Ltd., a WFOE, Fuji Sunrise International Enterprises Limited, a British Virgin Islands company, Southern International Develop Limited, a British Virgin Islands company, and HK Organic Region Limited, a Hong Kong company.

In addition, Organic Region entered into exclusive arrangements with Guangzhou Greenland Co.

Ltd., an individual business entity owned by Mr.

Xiong Luo, our chief executive officer, president and a director who gave Organic Region the ability to substantially influence Guangzhou Greenland’s daily operations and financial affairs, appoint its senior executives and approve all matters requiring shareholder approval.

As a result, we consolidated the financial results of Guangzhou Greenland as variable interest entity pursuant to ASC 810, which was formerly classified as Financial Interpretation No.

46R, “Consolidation of Variable Interest Entities,” in our financial statements.

The following chart reflects our organizational structure as of the date of this annual report.

The following table describes our corporate structure:

Name of Entity

Relationship to Us

Nature of Business

2 unchanged sentences

Organic Region Group Limited

100% owned by us

Holding company

4 unchanged sentences

100% owned by Organic Region

Vegetable processing and distribution

Cleaning and preparing vegetables for distribution and distribution of vegetables

Fuji Sunrise International Enterprises Limited

100% owned by Organic Region

Planned apple processing and storage

Presently inactive, with plans for apple distribution

Southern International Develop Limited

100% owned by Organic Region

Holding company of our China green food distribution hub under

Leaseholder for green food distribution center presently under construction

HK Organic Region Limited

100% owned by Organic Region

Planned for import and export

Proposed import and export operations

Guangzhou Greenland Co., Ltd.

owned by our Chief Operating Officer and treated as a variable interest

entity controlled by us

Wholesale business

We intend to form a new domestic subsidiary to be 100% owned by

our wholly-owned subsidiary, Southern International Development Ltd., which will

operate our new higher margin green foods business.

See Our ProductsGreen

Foods below.

Corporate Information

100% owned by our chief executive officer and treated as a variable interest entity controlled by us

Wholesale sale of fruit, and the source of substantially all of our revenue.

Guangzhou Metro Green Trading Limited

100% owned by Southern International Develop Limited

Premium foods distribution

Reverse Acquisition

On January 15, 2009, we acquired Organic Region pursuant to a share exchange agreement with Organic Region, its shareholders and its wholly owned subsidiaries.

Pursuant to the share exchange agreement, the Organic Region shareholders transferred all of the shares of the capital stock of Organic Region, in exchange for 81,648,554 shares of our common stock, which constituted 98% of our issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the share exchange agreement.

The exchange was treated as a recapitalization that gave effect to the share exchange agreement.

Under generally accepted accounting principles, our acquisition of Organic Region is considered to be capital transactions in substance, rather than a business combination.

That is, the acquisition is equivalent to the acquisition by Organic Region of us, with the issuance of stock by Organic Region for the net monetary assets of us (then known as Henry County Plywood Corporation).

This transaction is accompanied by a recapitalization, and is accounted for as a change in capital structure.

Accordingly, the accounting for the acquisition is identical to that resulting from a reverse acquisition.

Under reverse takeover accounting, our historical financial statements are those of Organic Region, its subsidiaries and variable interest entity, which is treated as the acquiring party for accounting purposes.

The financial statements reflect the recapitalization of the shareholders’ equity as if the transactions occurred as of the beginning of the first period presented.

Thus, the 81,648,554 shares issued in the reverse acquisition are considered outstanding for all periods presented.

In connection with the reverse acquisition, we changed our fiscal year to the calendar year to reflect the fiscal year of Organic Region.

As part of, and contemporaneously with, the reverse acquisition, on January 15, 2009, we entered into a redemption agreement with our then majority shareholders, pursuant to which we issued our non-interest bearing convertible promissory notes in the total principal amount of $500,000 to purchase 1,666,298 shares of common stock owned by these shareholders, and we cancelled the acquired shares.

We paid the notes in two installments of principal in the amount of $250,000 on March 31, 2009 and April 27, 2009.

We have no further obligation to our former majority shareholders.

At the time of the reverse acquisition, we were a shell company with no operations and our sole purpose was to locate and consummate a merger or acquisition with a private entity.

As a result of the reverse acquisition, our business has become the business conducted by Organic Region.

Our corporate headquarters are located at 6/F No.

Xing Road, Shi Qiao Town, Pan Yu District, Guang Zhou, China.

Our telephone

number is +86-20-84890337.

In 1984, the PRC government began to implement a system of

reforms in the industry which transformed the industry from a fully state

oriented structure, including state oriented pricing and state controlled

distribution, to a market oriented structure, with market oriented pricing and

multi channel distribution.

These changes promoted the development of fruit

production through increased income for farmers and more variation in the fruits

and vegetables available to residents.

These reforms led to the development of planting and storage

technologies which enabled consumers to purchase fruits all year round and in

small amounts, rather than purchase an annual supply all at one time when fruits

were in season.

The reforms also led to the introduction of multiple

transportation channels and the opening up of new markets across China.

result, consumers throughout China today have access to fruits from all regions

in China and are no longer limited to locally produced fruits.

In addition, the improvement of peoples living standards in

the PRC has led to an increased emphasis in the PRC on consumption of healthy

foods, including fresh fruits and vegetables.

This increase in demand has led to

good prospects for the whole fruit and vegetable industry.

As a result of land reforms during the past 20 years, orchards

in China are generally small and the average farmer only owns between 0.4 to 0.5

acres of land.

As a result, there are very few large marketing and distribution

enterprises in the Chinese fruit industry.

In general, apples in China are sold

through small fruit brokers who buy apples from farmers for cash.

sort and pack the fruit and resell it at fresh fruit markets or package it for

delivery to processors.

We are engaged in the sale and distribution of various fruits

and vegetables in the PRC.

To date, almost all of our revenues have been

generated by sales of the following products:

Emperor bananas;

Tangerine oranges.

Historically, Fuji apples have been our main profit centers.

Emperor bananas and tangerine oranges have been the only other products that

have generated meaningful revenues for us to date.

We also sell a variety of

vegetables, as described below.

Fuji apples comprised approximately 85% of our sales in the

year ended December 31, 2009 and approximately 87% of our sales in the year

ended December 31, 2008.

Because we are able to sell high quality Fuji apples

throughout the entire year, these apples are considered a high-end fruit in the

PRC and our revenues from sales of these apples are not seasonal.

Processing and Storage below.

947, Qiao Xing Road, Shi Qiao Town, Pan Yu District, Guangzhou, People’s Republic of China.

Our telephone number is 86-20-84890337.

Our website is http://www.sinogreenland.com .

Information on our website or any other website does not constitute a part of this annual report.

Our Industry and Market Trends

The rapid economic expansion experienced in China in the recent decade brought more income to Chinese consumers and enabled higher consumer spending.

We see this trend through the rising number of supermarkets operating in China and their total sales.

Studies have shown that as the living standard of an urban population increases, consumers consume more fruits on a per capital basis.

A recent USDA Economic Research study, Consumer Demand for Fruit and Vegetables:

Example, by Susan L.

Pollack, concluded that fruit and vegetable consumption in high income countries was more than two and one-half times that of low income countries.

This report is available at http://www.ers.usda.gov/publications/wrs011/wrs011h.pdf .

The latest USDA data shows China’s urban per capita consumption of fruits and melons at 54kg in 2008 and 60kg in 2007.

This information is available at http://www.ers.usda.gov/data/china/NationalResults.aspx?DataType=2&DataItem=104&StrDatatype=Urban+per+capita+consumption&ReportType=0 .

However, this amount is still low compared to the level of fruit consumption of 123kg/yr in the United States.

We believe that there is still much room for growth of fruit consumption in China.

In terms of the absolute size of the market, a 2008 National Bureau of Statistics of China report on the world fresh food market estimated that China’s total fruit production was 107.8 million tons in 2008, representing approximately 19% of an estimated global production of 570 million metric tons for that year.

Of China’s production volume, China exported only about 1.9 million tons, so the vast majority of its production was consumed domestically.

This information is available at http://www.stats.gov.cn/tjsj/qtsj/gjsj/2009/t20100413_402634129.htm .

Thus, the vast majority of China’s fruit production was consumed domestically.

Industry Structure

Prior to 1984, the fruit industry in China was subject to state controlled pricing and distribution.

Although fruit production developed rapidly and features varied categories and configurations, the PRC’s fruit production structure still lagged far behind other industries in the following three aspects:

Apples, oranges and pears accounted for a large proportion of total domestic fruit production (at approximately 63.5%), but lacked high-end and rare categories.

The domestic fruit harvest period was clustered in the fall months;

oranges mature mainly in November and December and a few categories of fruits matured before October.

The supply of fruits was therefore too concentrated during a short period.

Fruit storage methods only allowed for the storage of less than 30% of total fruit production and mechanical processing methods could only store 10% of total production.

In 1984, the PRC government began to implement a system of reforms in the industry which transformed the industry from a fully state oriented structure to a market oriented structure, from state oriented pricing to market oriented pricing, and from state controlled distribution to multi -channel distribution.

These changes not only greatly mobilized and enthused fruit farmers and promoted the development of fruit production, they also increased the income of farmers and resulted in more variation in the vegetables available to residents.

These reforms led to the development of planting and storage technologies which enabled consumers to purchase their fruits all year round and in small amounts, rather than purchase all their demand at one time and only when fruits were in season.

The reforms also led to the introduction of multiple transportation channels and the opening up of new markets across China.

As a result, consumers have access to fruits from all regions in China and are no longer limited to locally produced fruits.

In addition, the improvement of people’s living standards in the PRC has led to more attention being paid to the link between healthy foods and long lives.

This trend has stimulated the consumption of substances that promote health, including fresh fruits and vegetables, and the transition of fresh fruits in China from a luxury to a necessity.

We expect that this increase in demand is leading to good prospects for the whole fruit and vegetable industry.

Our Growth Strategy

Our long-term growth plans include both the expansion of our present distribution business and the development and implementation of our proposed distribution hub, which is described under “Proposed Distribution Hub.”

As a company that seeks to market premium specialty fruit, we believe we are well positioned to capitalize on future industry growth in China.

We believe that our produce can be treated as premium fruit because we have been successfully marketing our produce at premium prices because of the overall quality of our produce.

We are dedicated to providing healthy and high nutritional premium specialty fruit and vegetables.

We intend to implement the following strategic plans to take advantage of industry opportunities and our competitive strengths:

Strengthen and expand our supply sources.

We believe that a steady supply of premium specialty fruits is crucial to our future success.

Currently, we have built strong relationships with three plantation bases in Shaanxi, Guangdong, and Guangxi Provinces.

We intend to further strengthen our existing cooperative relationships with our plantation bases and plan to expand our supply sources by securing more first priority purchase rights with suppliers across China.

Thus, in order to expand, we need to purchase the long-term leases, which have a significant up-front cost.

Expand our distribution network to increase the prevalence of our products nationwide.

Our current sales depend heavily on our regional distributors and their network.

To support our rapid growth in sales, we plan to further expand our distribution network by leveraging our steady and expanding supply sources and capture the higher margin business of sales to retail stores and super markets.

Expand the fruits that we sell to satisfy different customer preferences.

We currently focus on apples, bananas and oranges because they are the best selling fruits in the world.

However, we constantly evaluate our product line and seek to adapt to changing market conditions by updating our products to fulfill market needs.

Currently, we are testing a few new fruits, such as pears.

Proposed Distribution Hub

We plan to use the cold storage facility for storage of our apples.

We believe that our hub will be the first hub in the PRC to provide wholesale and retail customers with the ability to purchase a wide variety of high quality foods in one location.

All of the buildings have been constructed, although the two buildings in the distribution hub still require interior construction and decoration as well as equipment before we can use them.

We paid for the construction of all three buildings, although payment for one of the buildings was made in shares of our common stock.

At our distribution hub:

We will provide space for produces to sell their products to the public, for which we will receive a rental fee based on the space used and a management fee based on the producers’ revenues.

We anticipate that most of our revenue from the distribution hub will be generated by these fees from other vendors.

We will sell imported products, primarily organic products, which we consider to be premium products, which we will purchase in the international market and sell at the distribution hub.

We do not anticipate that we will sell our present produce at the distribution hub.

In determining which foods are to be sold in our distribution hub, we will seek to provide space to producers who are:

Members of the China Green Foods Association, who sell more than 17,000 green food items.

Green foods are foods that are not organic but which meet standards set by the China Ministry of Agriculture.

Producers of organic foods, which have been certified as organic by an independent laboratory which we will designate.

Organic foods are foods which are produced without the use of pesticides or other chemicals.

Producers of food which is labeled as “pollution-free” in compliance with applicable government regulations after being tested at an independent laboratory which we will designate.

The government sets forth specific technical requirements relating to the production and content of the foods, which standards limiting content of harmful substances and approves the use of the “pollution-free” mark.

Through December 31, 2010, we had paid approximately $14.2 million toward the exterior as well as some interior construction of this hub using cash generated by our operations and from funds which we raised in late 2009 and 2010.

Pursuant to the terms of our lease for the hub, the landlord had the obligation to construct the facility, but we were required to advance funds to the landlord for the construction.

The construction of the exterior of the building has been completed, and we expect to complete the interior and commence operations at the hub by September 2011, although we can give no assurance that we will be able to commence operations by that date.

We anticipate that the total investment to launch this business will be $32.4million, which includes construction costs of approximately $27.4 million, with approximately $3 million for auxiliary facilities, such as refrigerated trucking capabilities and air conditioning, and $2 million for initial inventory of new premium imported products.

The construction costs includes the approximately $8.4 million which was paid through the issuance of common stock in 2011.

The construction of the exterior of the buildings has been completed, and we expect to complete the interior and commence operations at the hub by September 2011.

We expect that the food items sold in the distribution hub will include fruits and vegetables, rice and other grains, meat, eggs and oil.

Some of these foods will be certified as green foods by the Green Food Development Center.

Green food is a Chinese certification program for food.

The China Green Food Development Center, an agency of the Ministry of Agriculture, is responsible for establishing the green food standards and granting the green food certification.

In general, in order for a food product to obtain green food certification, it must meet four conditions.

It must be grown in a good ecological environment.

The quality of the soil, air and water must meet the environmental requirements for the area in which the foods are grown.

The production process for green foods must comply with the green food production technical standards, relating to such matters as pesticides, fertilizers, veterinary drugs, feed and food additives.

The food products must be tested by an authorized testing organization.

The physical and chemical (heavy metals, pesticide residues and veterinary drug residues and microbiological indices must meet the green food product standards.

The packing of the green food product, including the use of the green food logo, must meet the requirements for green food packaging.

Information on the Green Food Development Center is available at http://www.greenfood.org.cn/sites/GREENFOOD/ ;

however, information on that website is not provided by us and does not constitute a part of this annual report.

In developing this business we will require agreements with each vendor.

We anticipate that we will enter into agreements with each supplier which provide for the vendor to pays us a rental for the right to occupy space in the distribution hub and a management fee for management services.

We anticipate that we will be paid both a fixed fee and a variable fee based on the vendor’s revenues.

Thus, we anticipate that most of our revenue from our proposed distribution hub will be generated by the fees paid by the vendors who sell products at our distribution hub, with a significant percentage of our revenues from the distribution hub being based on the revenue of the vendors who occupy space at the distribution hub.

We will be seeking to import and sell at our distribution hub a line of imported food products which we think can be sold at premium prices.

We anticipate that that most of the products we sell will be organic products, but may also include other products that are consistent with the quality of products that are being offered at the distribution hub.

We anticipate that our initial cash requirement for inventory will be approximately $2 million and that we will normally have an inventory of approximately $4 million.

Our Present Products

Our main products are Fuji apples, which accounted for 83% of our revenue in the year ended December 31, 2010, emperor bananas and tangerine oranges, which are high-quality variations of bananas and oranges.

We are also engaged, to a lesser extent, in the wholesale distribution of a variety of vegetables, including tomatoes, cauliflower, cucumber, lettuce, spinach, leek, celery, peppers, Chinese cabbage, carrots, loofah, pumpkin, bitter gourd, white gourd, gherkin and yams.

Fuji Apples – Fuji apples, which comprised 82.8%% of our sales in 2010 and 85.2% of our sales in 2009, are very popular in China because of their crispness and taste.

They are also treated as a high-end product.

The output for the Fuji apple in China was about 18 million tons in 2008.

Fuji apples have a long storage period and are easy to transport.

At December 31, 2010, we leased more than 16,200 acres of Fuji apple plantations.

During 2010, our 16,200 acre Fuji apple plantation base in Yan’an, Shaanxi Province, had an output of approximately 116,071 tons.

Emperor Bananas – The emperor banana derives its name from its appealing outer appearance and delicious taste.

It is considered to be a premium item in China and is priced about two to two and a half times the price for normal bananas.

The emperor banana originated in Thailand and is new to China.

Historically, Wanqingsha Town in Nansha District in Guangzhou, Guangdong Province has been a major area for growing traditional bananas.

In 2003, banana production drastically declined due to the spread of the “Panama Virus,” which stunted the growth and cultivation of traditional bananas.

To address this agricultural problem, we launched a collaborative effort with Nansha’s local government to find alternative fruits to grow in Nansha district.

Pilot projects for Hawaiian papaya, Taiwan pearl guava and Thai emperor banana were pursued.

Of the three fruits tested, the Emperor banana from Thailand proved to be the most economically viable fruit to cultivate.

Aside from the Emperor banana’s compatibility with Nansha’s agricultural landscape and local farming knowledge, we believe that emperor bananas can generate a gross margin which is 100% to 250% higher than that of traditional bananas.

We have developed a special method for cultivating seedlings for this species in our research laboratories.

Our seedlings mature and are ready for planting in approximately three months and are harvested between seven and nine months later.

We believe that our Guangzhou plantation is now one of the only two Chinese growers of emperor bananas.

During 2010, our farmers produced 16,280 tons of these bananas on 2,864 acres of land.

Tangerine Orange – Tangerine orange trees are created by grafting the Japanese tangerine tree onto an orange tree stem when both are one year old.

The resulting tree contains a number of desirable characteristics.

Its juice is sweeter than tangerine and it has a meatier body than regular oranges.

Tangerine oranges can be stored for approximately 90 days, which is a relatively long storage period and makes the fruit well suited for transportation.

Our tangerine orange plantation is roughly 1,300 acres in size and is located in Liuzhou in Guangxi Province.

Our tangerine orange output in 2010 was more than 8,300 tons.

Our Plantations

We currently lease three main plantations:

the Luochuan Apple Plantation Base in Yan’an, Shaanxi Province;

the NanshaWanqingsha emperor banana plantation base in Guangzhou, Guangdong Province and the Rong’an tangerine orange plantation base in Liuzhou, Guangxi Province.

We are a party to 25-year land lease agreements with farming cooperatives.

Pursuant to these agreements we lease the land from farming cooperatives and then grant farming rights back to the farming cooperatives.

In exchange, we have first priority on purchasing the farming cooperatives’ production at prevailing wholesale prices.

We do not receive any rentals from the cooperatives.

Rather, these agreements provide us with an annual supply of produce.

We believe that our cooperative relationships with farming cooperatives allows us to reduce our financial and operating risks and avoid the substantial capital required to maintain and finance agricultural production while making a significant contribution to regional development.

Our land lease agreements provide for us to pay, at the inception of the lease term, the full amount due under the lease, which is amortized over the term of the lease.

Almost all of our products are sold by us at the Guangdong Yun Cheng Wholesale Market and the Beijing XinFadi Agricultural Products Wholesale Market, two major markets for the sale of agricultural products in their respective areas, where we lease space to sell our produce.

We derived more than 99% of our revenue from these two markets in 2010 and 2009.

Quality Control

In 2006, we passed the ISO9001:2000 quality management system.

We have also established our own quality control system for all our fresh fruits and vegetables, and we have adopted what we consider a very high quality standard.

We seek to control our inventory levels in the wholesale centers to balance our inventory against market need and minimize spoilage rates as well as our stock holding and handling costs.

For the tangerine oranges and emperor bananas, our field quality control teams check and inspect all products before they are delivered to the wholesale markets and to our customers.

In addition, our own quality control team in Shaanxi Province monitors all shipments of Fuji apples and with a view to making sure that the fruit in each truck load complies with our standards.

We also provide technical assistance to the farmers to help improve the quality of the produce.

Our Suppliers and Supply Arrangements

We currently obtain all of our Fuji apples from farming cooperatives that work on 16,200 acres of apple plantation bases located in Luochuan County, Yan’an, Shaanxi Province.

Our average annual production output is between 80,000 to 100,000 tons.

Since 1947, various varieties of apples have been successfully cultivated in Luochuan County and, in 2000, Luochuan County was designated as the apple growing region in China.

To date, approximately 60 varieties of apples are being grown in Luochuan County on a total plantation area of close to 100,000 acres, with 76% of this area being dedicated to Fuji apple production.

In 2010, total apple production in Luochuan County was estimated at about 800,000 tons.

Our farming cooperatives arranges for the packaging and transportation of their harvested apples to our wholesale centers.

To market effectively, we require an efficient logistical process in loading, unloading, transporting and delivering fruit from the plantation base to the wholesale centers.

On a weekly basis, we coordinate with the Luochuan plantation base to schedule deliveries to either Yun Cheng or XinFadi wholesale centers.

In addition, our sales and distribution team monitors our Fuji apple inventories with the primary objective of controlling inventory levels in the wholesale centers to balance our inventory level against what we perceive as the market need in order to minimize spoilage and reduce stock holding and handling costs.

We are a party to 25-year land lease agreements with farming cooperatives.

Pursuant to these agreements we lease the land from farming cooperatives and then grant farming rights back to the farming cooperatives.

In exchange, we have first priority on purchasing the farming cooperatives’ production at prevailing wholesale prices.

We do not receive any rentals from the cooperatives.

Rather, these agreements provide us with an annual supply of produce.

Our land lease agreements provide for us to pay, at the inception of the lease term, the full amount due under the lease, which is amortized over the term of the lease.

Emperor Bananas

Emperor bananas comprised approximately 9% of our sales in the

year ended December 31, 2009 and approximately 7% of our sales in the year ended

December 31, 2008.

The Emperor bananas that we purchase from farmers and

subsequently sell to wholesale customers are harvested throughout the year.

Because we are able to sell high quality Emperor bananas throughout the entire

year, these bananas are considered a high-end fruit in the PRC and our revenues

from sales of these bananas are not seasonal.

Tangerine Oranges

Tangerine oranges comprised approximately 5% of our sales in

the year ended December 31, 2009 and approximately 6% of our sales in the year

ended December 31, 2008.

Our tangerine oranges are harvested and distributed

from October to March each year.

Consequently, our revenues from sales of these

oranges are seasonal.

See Seasonality below.

We also sell a variety of vegetables, including tomatoes,

cauliflower, cucumber, lettuce, spinach, leek, celery, peppers, Chinese cabbage,

carrots, loofah, pumpkin, bitter gourd, white gourd, gherkin and yams.

products have comprised a small percentage of our business to date.

We use production line processing technology to cleanse and

sort all of our vegetables.

Deep processing involves the following steps:

immersion, screening, high pressure spraying, sorting, freezing, rinsing,

ultraviolet treatment and packaging.

Our vegetable products generate higher

margins as a result of this processing.

Our plan is to increase sales of the deep processed vegetables

that we believe will increase our revenues and gross margin.

Our goal is to sell green food agriculture products, including

fruits, vegetables, rice, meat, eggs, and oil that have been

certified as green foods by Green Food Development Center under

the PRC Ministry of Agriculture.

Green foods are healthy and environmentally

friendly, and their profit margins are expected to be significantly higher than

our current products.

Over 17,000 food items are currently certified as green

foods in the PRC.

There are currently over 6,000 suppliers of green foods

certified by Green Food Development Center.

Because of the diversity of

available sources of these products, we believe that we will be able to obtain

an adequate supply of green foods at a reasonable cost.

We expect to develop a strong customer base in the PRC for our

green food products, which represented approximately 5% of total agricultural

output in China in 2007, and to export these products internationally.

trade partner countries with the PRC currently recognize the Green Food

Development Centers certifications of green food products.

In addition, our long-term goal is to sell green foods

agriculture products, including fruits, vegetables, rice, meat, eggs and oil

that have been certified as green foods by the Green Food Development Center

under the PRC Ministry of Agriculture.

Green foods are healthy and

environmentally friendly whose profit margins are expected to be significantly

higher than our current products.

We are in the process of constructing a new

hub in the Guangdong wholesale market.

See Real PropertyNew Green Foods Hub

We believe that our hub will be the first hub in the PRC to provide

wholesale customers with the ability to purchase such a wide variety of green

foods from one distributor in one location.

Wholesale distributors who purchase

from our hub will sell our products to customers in various regions in the PRC

and to the Pearl River Delta, including Hong Kong and Macao, thereby potentially

providing us with a larger market and significant revenues.

PropertyNew Green Foods Hub below.

Our Raw Materials and Suppliers

Our business depends on obtaining a reliable supply of various

agricultural products, including primarily Fuji apples, Emperor bananas and

tangerine oranges.

In 2008, approximately 86.8% of our raw materials consisted

of Fuji apples, 6.9% Emperor bananas and 5.7% tangerine oranges.

The remaining

0.6% consisted of various vegetables, including tomatoes, cauliflower, cucumber,

lettuce, spinach, leek, celery, peppers, Chinese cabbage, carrots, loofah,

pumpkin, bitter gourd, white gourd, gherkin and yams.

In 2009, approximately

85.4% of our raw materials consisted of Fuji apples, 8.9% Emperor bananas and

Our emperor bananas are grown in Wanqingsha Town, Nansha District, Guangzhou in Guangdong Province.

The emperor banana is a premium product, but like the traditional banana, it is highly perishable and needs to be brought to market and sold generally within three to four weeks after harvest.

We coordinate with the emperor banana plantation base to facilitate deliveries and effectively manage inventories in the same manner that we do for wholesale Fuji apples.

We are negotiating with the Nansha local government to obtain the right to expand the acreages on which emperor bananas are grown and to develop this land.

We intend to develop this parcel in phases.

However, we cannot assure you that we will be able to obtain the rights to the land or to develop additional land.

In 2007, we started our first phase of emperor banana cultivation covering 330 acres.

In 2008, our farming cooperatives cultivated an additional 2,500 acres.

We have also assisted our cooperatives to establish a seedling facility whose goal was to produce 1,000,000 seedlings by the end of 2009.

Our cooperatives reached this goal.

We intend to seek to replicate this business model for emperor bananas in the Nansha district.

We are coordinating with Nansha’s farming cooperative to increase the membership of our farming cooperative and encourage them to participate in our emperor banana cultivation program.

We regularly conduct emperor banana cultivation seminars and educate farmers with a view to persuading them to join our cooperative arrangement.

We transfer the seedlings we produce in our facilities to the farmers, which they can cultivate and sell back to us when the fruit matures.

We believe that our agricultural practices contribute to the quality of the emperor bananas that we distribute.

Tangerine Oranges

The remaining 0.6% consisted of various vegetables,

including tomatoes, cauliflower, cucumber, lettuce, spinach, leek, celery,

peppers, Chinese cabbage, carrots, loofah, pumpkin, bitter gourd, white gourd,

gherkin and yams.

We purchase all of our Fuji apples, Emperor bananas and

tangerine oranges from farming cooperatives located in the PRC.

cooperative consists of individual farmers that grow the same type of product

and sell to the same customers.

We have entered into several land lease

agreements with various farming cooperatives in the PRC since 2004.

each agreement is 25 years.

Pursuant to each agreement, we lease from the

cooperative the land on which the plantation is situated at a price of

approximately $1,200 per acre.

We grant the farming rights to such lands to the

cooperative, so that the cooperative is responsible for farming the land and we

acquire the fruits that the members of the cooperative produce.

In exchange for

our lease payment, we have first priority on purchasing the cooperatives

production at market wholesale prices.

We do not receive any rental or other

income from these arrangements.

These arrangements allow us to avoid the

substantial capital required to maintain and finance agricultural production.

Because we have first priority to purchase produce from these cooperatives, we

believe that our raw materials are currently in adequate supply and will

continue to be so in the future.

The following table provides the size of the plantations on

which our fruits are harvested, the type of fruit produced and the annual number

of tons produced as of December 31, 2009:

Kuibai Town,Luochuan County, Shaanxi Province

Town,Luochuan County, Shaanxi Province

Shiquan Town,Luochuan County, Shaanxi Province

Wanqingsha Town,

Nansha District, Guangzhou in Guangdong Province

We purchase our tangerine oranges pursuant to a 25-year lease agreement with the Rongan Wan Shanhong Fruit Company, which owns a 1,300-acre tangerine orange plantation base.

Annual output for the Rongan Wan Shanhong Fruit Company reached approximately 7,500 tons in 2009 and 8,300 tons in 2010.

The following table provides the size of the plantations on which our fruits are harvested, the type of fruit produced and the tons produced for the year ended December 31, 2010:

KuibaiTown,Luochuan County, Shaanxi Province

LaomiaoTown,Luochuan County, Shaanxi Province

ShiquanTown,Luochuan County, Shaanxi Province

Yangshu Town, Luochuan County, Shaanxi Province

Wanqingsha Town, Nansha District, Guangzhou in Guangdong Province

Liuzhou, Guangxi Province

We intend to expand the size of these plantations and to

acquire additional plantations in the future.

Other Products

We purchase all of our other vegetable products from

wholesalers located in the PRC.

We do not have any long-term contracts with any

of these suppliers.

We purchased approximately 1,100 tons of these vegetables,

in the aggregate, from these wholesalers in 2008 and approximately 1,600 tons in

Vegetable products have comprised a small percentage of our business to

Our Customers and Sales

In 2008 and 2009, we sold almost all of our products to various

wholesale fruit and vegetable distributors located in Beijing and Guangdong in

These distributors then distributed these products to retail stores and

supermarkets in Beijing and Guangdong, respectively, as well as neighboring

regions in the PRC.

We distributed almost all of our products in 2008 and 2009 from

our leased space in the Guangdong Yun Cheng Wholesale Market and the Beijing Xin

Fadi Agricultural Products Wholesale Market.

A wholesale market is a marketplace

designated for bulk sales by distributors such as us to wholesalers.

distributors lease space in the wholesale market and distribute their products

to their customers from this location.

The Guangdong Yun Cheng Wholesale Market

is one of the major wholesale centers for apples in southern China, with an

annual sales volume of approximately 1.8 million tons of apples.

The wholesalers

who purchase products at this market distribute their products to regions

populated by approximately 43 million people within a 200 kilometer radius from

Similarly, the Beijing Xin Fadi Agricultural Products Wholesale

Market has an annual sales volume of approximately 3.5 million tons of apples.

The wholesalers who purchase products at this market distribute their products

to regions populated by approximately 24 million people.

We generally do not enter into long-term contracts with our

Our customers generally purchase our products pursuant to purchase

Our customers generally purchase on credit, depending on their

credit history and volume of purchases from us.

However, in 2008 and 2009, we

did not experience any significant delays in the collection of our accounts

We do not depend heavily on any of our customers.

2009, none of our customers accounted for 10% or more of our revenues.

To date, all of our products have been sold to a limited number

of regions in the PRC.

Our goal is to expand our domestic distribution network

and distribute our products to other regions in the PRC and to export our

products to various foreign countries, including East Timor, Indonesia, Hong

Kong SAR, Macao and Australia.

In early 2010, we entered into a cooperation

agreement with certain business representatives in East Timor.

Pursuant to this

agreement, the representatives will assist us in marketing the various green

foods we intend to sell to this region.

We intend to export certain of our

products to East Timor beginning in 2010.

In addition, we have entered into an

agreement with a distributor in Australia pursuant to which we will sell green

foods to this distributor once we have developed our green foods.

However, there

is no assurance that we will be able to obtain all required licenses, permits,

or approvals from the relevant government authorities in East Timor or Australia

or that we will otherwise be able to sell our products to customers in either

region or that we will be able to generate substantial revenues from any sales

to either region.

Our Marketing Efforts

We have not spent a significant amount of capital on

advertising to date.

Our marketing team is located at the wholesale markets

where we sell our products and they market our products to various wholesale

distributors in the PRC who conduct business in these markets.

Since the end of

2009, our marketing team has initiated discussions with numerous retail

companies in an attempt to sell our products directly to these companies.

goal is to begin selling our products directly to retail customers instead of

wholesale customers in the near future.

Quality Control

In 2006, we passed both the ISO9001:2000 quality management

system and the HACCP-EC-01 food security management system granted by the

National Business Inspection Bureau.

We have also established our own quality control system for all

our fresh fruits and vegetables, and we have adopted what we consider a very

high quality standard.

For our tangerine oranges and Emperor bananas, our field

quality control teams check and inspect all products before they are delivered

to the wholesale markets and to our customers.

In addition, we have a quality

control team in Shaanxi Province which monitors all shipments of Fuji apples

with a view to making sure that the fruit in each truck load complies with our

The fruits and vegetables industry is diverse, both in the PRC

and globally.

We do not have a significant market share with respect to any of

our products.

Nonetheless, although statistics are not available, we do not

believe that there are any distributors of Fuji apples, Emperor bananas or

tangerine oranges that handle more overall annual tonnage in China than we do.

We believe that only the Yanan Apple Group and the Qixia Apple, which are PRC

state-owned enterprises, are our principal competitors with respect to sales of

apples in the Chinese market.

Competitive Advantages

We believe that our success to date can be attributed to

various competitive advantages, including the following:

Strong Supplier Relationships We acquire long-term first priority

purchase rights from what we believe are some of the best Fuji apple, Emperor

banana and tangerine orange plantation bases in the PRC.

We believe that our

business model provides motivation to our suppliers to produce an adequate

supply of high quality products because we provide them with a ready market

for their produce and we provide technological support to enable them to

produce high yields.

Production Line Processing Technology Our production line

processing technology provides standardized procedures for inspection,

grading, cleansing and packaging of our fruits and vegetables.

deep cleansing technology to provide healthy, fresh and high-quality produce

with our Organic Region brand name.

In 2006, our Organic Region brand was

granted the National 3.15 China Famous Brand Authentication award, and in

2006, we received the Guangzhou Nansha District Agricultural Technology

Breakthrough Support Prize Certificate for introducing Emperor banana

cultivation technology.

High Product Quality Our products are viewed as high quality

products by our customers.

We believe that in the past several years we have

established a reliable reputation in two wholesale centers in China by

supplying high quality premium fruits.

Marketing, Sales and Distribution

To date, all of our products have been sold to a limited number of regions in the PRC.

Our goal is to expand our domestic distribution network and distribute our products to other regions in the PRC and to export our products to foreign countries, including Indonesia, Hong Kong SAR, Macao and Australia.

We have entered into an agreement with a distributor in Australia pursuant to which we have begun to sell green foods to this distributor, although our sales to this distributor have not been significant.

We distribute our Fuji apples in the Guangdong Yun Cheng Wholesale Market and the Beijing XinFadi Agricultural Products Wholesale Market.

The Guangdong Yun Cheng Wholesale Market is one of the major wholesale centers for apples and tangerine oranges in Southern China, with an annual apple volume of more than 1.8 million tons.

This wholesale market serves an area of approximately 43 million people within a 200 kilometer radius.

In 2010, our annual turnover in the Yun Cheng wholesale market was approximately 69,700 tons, representing approximately 60% of our total apple production.

We believe that we are the largest apple wholesaler in Yun Cheng, accounting for a 3% of Yun Cheng’s annual apple turnover in 2010.

The second largest apple seller at Yung Cheng has less than1% of Yun Cheng’s total annual turnover.

The Beijing XinFadi Agricultural Products Wholesale Market is one of the largest agricultural wholesale centers in China with an annual apple turnover of approximately 3.5 million tons.

This wholesale market covers a market of approximately 24 million people within a 200 kilometer radius.

In 2010, we sold approximately 46,350 tons of apples in XinFadi, representing approximately 1.3% of XinFadi’s total annual turnover in apples.

Emperor Bananas and Tangerine Oranges

We distribute our emperor bananas and our tangerine oranges to wholesale centers such as the Guangdong Yun Cheng Wholesale Market in Southern China and the Beijing XinFadi Agricultural Products Wholesale Market in Northern China.

We distribute various vegetables in different seasons – tomato, cauliflower, cucumber, lettuce, spinach, leek, celery, peppers, Chinese cabbage, carrot, loofah, pumpkin, bitter gourd, white gourd, gherkin and yams.We plan to supply vegetables directly to supermarket chains.

At present, sales of vegetables represent less than 1% of our revenue.

As a result of land reforms during the past 20 years, orchards in China are generally small and the average farmer only owns between 0.4 to 0.5 acres of land.

As a result, there are very few large marketing and distribution enterprises in the Chinese fruit industry.

In general, apples in China are sold through small fruit brokers who buy apples from farmers for cash.

The brokers sort and pack the fruit and resell it at fresh fruit markets or package it for delivery to processors.

Although statistics are not available, we do not believe that there are any distributors of Fuji apples, emperor bananas or tangerine oranges that handle more overall annual tonnage than we do.

We also believe that our emphasis on premium products set us apart from other distributors of apples, bananas and oranges, although other companies market premium products, including Fuji and other premium quality apples.

In the Chinese market, we believe that only the Yan’an Apple Group and the Qixia Apple Group, which are state-owned enterprises, are our closest competitors.

We face indirect competition from the publicly held companies Chaoda Modern Agriculture (Holdings) Limited and China Green Agriculture, Inc.

Chaoda Modern Agriculture, a Hong-Kong listed company, primarily produces vegetables and, to a lesser extent, fruits, while China Green Agriculture, a Hong-Kong listed company, primarily produces fertilizers.

We believe that our success to date and potential for future growth can be attributed to a combination of our strengths, including the following:

Strong Supplier Relationships – We implement a cooperative (collaborative) supply chain model, under which we have total control of the production cycle of our high value fruits and of our resale at wholesale centers.

Under the 25-year lease agreements, we acquire first priority purchase rights from what we believe are the best plantation bases, we provide farming cooperatives with technological support to enable them to produce high yields and we provide them with ready market for their produce through our multi-channel marketing network.

We believe that our structure provides motivation to the farmers.

Recognition for the Way we Conduct Business – In 2007, we became qualified for bidding as a United Nations supplier, which means that we are recognized as subscribing to the UN Supplier Code of Conduct in the conduct of our business and operations.

In 2006, we received both the ISO9001:2000 quality management system certificate.

Production Line Processing Technology – Our production line processing technology (for which we have applied for a patent in China) provides standardized procedures for inspection, grading, cleansing and packaging of our fruits and vegetables.

We use this “deep cleansing” technology to provide healthy, fresh and high-quality produce with our Organic Region brand name.

In 2006, our Organic Region brand was granted the National “3.15” China Famous Brand Authentication award, and in 2006, we received the Guangzhou Nansha District Agricultural Technology Breakthrough Support Prize Certificate for introducing emperor banana cultivation technology.

High Product Quality – Based on the market acceptance of our products as premium prices, we believe that our products are viewed as high quality products by our customers, and in the past three years we believe that we have established a reliable reputation in wholesale centers in China.

We have chosen to focus on the premium fruits and vegetables.

We do not compete in low-end markets.

We believe that only by providing high quality and adhering to high-end market standards can we remain successful.

Research and Development

Our research and development programs concentrate on sustaining

the productivity of our agricultural lands, product quality, value-added product

development and packaging design.

We also provide on-site technical services to

our suppliers and are responsible for the implementation and monitoring of

recommended agricultural practices.

Our research and development expenses were

not significant in 2008 or 2009.

Our research and development programs concentrate on sustaining the productivity of our agricultural lands, product quality, value-added product development and packaging design.

Agronomic research is directed toward sustaining and improving product yields and product quality by examining and improving agricultural practices in all phases of production (such as development of specifically adapted fruit varieties, land preparation, fertilization, cultural practices, pest and disease control, post-harvesting, handling, packing and shipping procedures).

We also provide on-site technical services to our suppliers and we are also responsible for the implementation and monitoring of recommended agricultural practices.

Our research and development expenses have not been significant for the years ended December 31, 2010 or 2009.

Intellectual Property

Our application for a Chinese invention patent for cleaning,

freshening and sterilizing method and device for fruit and vegetable

(Application No.

2005100888659) is currently pending.

This patent application

right was transferred to us by Mr.

We have no patents or patent applications outside of China.

Our application for a Chinese invention patent for “cleaning, freshening and sterilizing method and device for fruit and vegetable” (Application No.

2005100888659) is pending.

This patent application right is held in the names of Mr.

Xiong Luo and Mr.

Anson Yiu Ming Fong in

January 2009.

We also have applied for the following 16 trademark

applications in the PRC, four of which have been approved (Application No.

6512336 and 6512340 in Class 31, and Application No.

6512366, and 6512338 in

Application Date

Application No.

January 16, 2008

6512335 through 6512338

35, 31, 30 and 29

Patent application pending

January 16, 2008

35, 31, 30 and

Patent application pending

January 16, 2008

Patent application pending

January 16, 2008

6512371 through 6512374

31, 35, 30 and 29

Patent application pending

We also seek to protect our technological know-how through

confidentiality agreements entered into with the employees in our production

However, we cannot assure you that our patents, trademarks and

confidentiality agreements will be adequate to protect our intellectual property

Anson Yiu Ming Fong, who transferred the application right to us for no consideration, pursuant to a patent transfer agreement, among Mr.

Fong and the Company, dated January 10, 2009.

We also have 16 trademark applications pending, including our logo and the term organic region in both English and Chinese.

We also seek to protect our technological know-how through confidentiality agreements entered into with the employees in our production department.

However, we cannot assure you that our patents, trademarks and confidentiality agreements will be adequate to protect our intellectual property rights.

The food industry is subject to extensive regulation in China.

The following summarizes the most significant PRC regulations governing our

business in China.

The following summarizes the most significant PRC regulations governing our business in China.

Food Hygiene and Safety Laws and Regulations

As a distributor and producer of food products in China, we are

subject to a number of PRC laws and regulations governing food safety and

hygiene, including:

As a distributor and producer of food products in China, we are subject to a number of PRC laws and regulations governing food safety and hygiene, including:

the PRC Product Quality Law;

the PRC Food Hygiene Law;

the Implementation Rules on the Administration and Supervision of Quality

and Safety in Food Producing and Processing Enterprises (trail

implementation);

the Regulation on the Administration of Production Licenses for Industrial

the Implementation Rules on the Administration and Supervision of Quality and Safety in Food Producing and Processing Enterprises (trail implementation);

the Regulation on the Administration of Production Licenses for Industrial Products;

the General Measure on Food Quality Safety Market Access Examination;

4 unchanged sentences

the PRC Metrology Law.

These laws and regulations set out safety and hygiene standards

and requirements for various aspects of food production, such as the use of

additives, production, packaging, handling, labeling and storage, as well as

facilities and equipment.

Failure to comply with these laws and regulations may

result in confiscation of our products and proceeds from the sales of

non-compliant products, destruction of our products and inventory, fines,

suspension of production and operation, product recalls, revocation of licenses,

and, in extreme cases, criminal liability.

We believe that our exposure to these risks is limited since

our business model and our agreements with our suppliers provide a cushion which

shields us from product liability exposure and we control food hygiene and food

quality by implementing a strict quality control system and we believe that we

comply in all material respects with these laws and regulations.

To the extent

that the government imposes additional laws or restrictions, we would have to

comply with those laws as well.

These laws and regulations set out safety and hygiene standards and requirements for various aspects of food production, such as the use of additives, production, packaging, handling, labeling and storage, as well as facilities and equipment.

Failure to comply with these laws and regulations may result in confiscation of our products and proceeds from the sales of non-compliant products, destruction of our products and inventory, fines, suspension of production and operation, product recalls, revocation of licenses, and, in extreme cases, criminal liability.

We believe that our exposure to these risks is limited since our business model and our agreements with our suppliers provide a cushion which shields us from product liability exposure and we control food hygiene and food quality by implementing a strict quality control system and we believe that we comply in all material respects with these laws and regulations.

To the extent that the government imposes additional laws or restrictions, we would have to comply with those laws as well.

To the extent that we purchase foods from other suppliers for our green food distribution hub, we may be subject to liability exposure to the extent that our suppliers either do not comply with all applicable regulation or from impurities in foods we purchase from them.

Environmental Regulations

We are subject to various governmental regulations related to

environmental protection.

The major environmental regulations applicable to us

We are subject to various governmental regulations related to environmental protection.

The major environmental regulations applicable to us include:

the Environmental Protection Law of the PRC;

the Law of PRC on the Prevention and Control of Water Pollution;

Implementation Rules of the Law of PRC on the Prevention and Control of

Water Pollution;

Implementation Rules of the Law of PRC on the Prevention and Control of Water Pollution;

the Law of PRC on the Prevention and Control of Air Pollution;

Implementation Rules of the Law of PRC on the Prevention and Control of

Air Pollution;

Implementation Rules of the Law of PRC on the Prevention and Control of Air Pollution;

the Law of PRC on the Prevention and Control of Solid Waste Pollution;

the Law of PRC on the Prevention and Control of Noise Pollution.

We have obtained all permits and licenses required for

production of our products and believe that we are in material compliance with

all applicable laws and regulations.

Our packaging facilities are subject to various pollution

control regulations with respect to noise, water and air pollution and the

disposal of waste and hazardous materials.

We are also subject to periodic

inspections by local environmental protection authorities.

We have received

certifications from the relevant PRC government agencies in charge of

environmental protection, indicating that our business operations are in

material compliance with relevant PRC environmental laws and regulations.

As of December 31, 2009, we employed a total of 146 full-time

The following table sets forth the number of our employees by

We have obtained all permits and licenses required for production of our products and believe that we are in material compliance with all applicable laws and regulations.

Our packaging facilities are subject to various pollution control regulations with respect to noise, water and air pollution and the disposal of waste and hazardous materials.

We are also subject to periodic inspections by local environmental protection authorities.

We have received certifications from the relevant PRC government agencies in charge of environmental protection, indicating that our business operations are in material compliance with relevant PRC environmental laws and regulations.

As of March 15, 2010, we employed a total of 190 full-time employees.

The following table sets forth the number of our employees by function.

Number of Employees

1 unchanged sentence

Human resource and administration.

Research and development

Marketing and sales

Product development

Quality control

Our employees are not represented by a labor organization or

covered by a collective bargaining agreement.

We have not experienced any work

Import/export

Information technology

Our employees are not represented by a labor organization or covered by a collective bargaining agreement.

We have not experienced any work stoppages.

We believe that our employee relations are good.

We are required under PRC law to make contributions to the

employee benefit plans at specified percentages of the after- tax profit.

addition, we are required by the PRC law to cover employees in China with

various types of social benefits.

We believe that we are in material compliance

with the relevant PRC laws.

Existing Plantations

We currently lease three main plantations:

the Luochuan Apple

Plant Base in Yanan, Shaanxi Province;

the Nansha Wanqingsha emperor banana

plantation base in Guangzhou, Guangdong Province and the Rongan tangerine

orange plantation base in Liuzhou, Guangxi Province.

See Our Raw Materials and

Suppliers above.

New Green Foods Hub

We are in the process of constructing a new hub for the sale of

green foods in the Guangdong wholesale market.

We believe that our hub will be

the first hub in the PRC to provide wholesale and retail customers with the

ability to purchase such a wide variety of green foods from one distributor in

one location.

We have invested approximately $4 million in the construction of

this hub to date from cash generated by our operations and from funds which we

raised from several small equity offerings in 2009 and early 2010.

We anticipate

completing the construction of the hub by the end of 2010 and to begin the

operations of our new green foods product line in 2011.

We anticipate that the total investment to launch this business

will be $15 million.

We will need to raise a substantial amount of capital from

equity or debt markets in order to complete the construction of our hub and

launch our new green food product line.

We currently have no commitments from

any financing source.

There is no assurance that we will be able to raise any

funds on terms favorable to us, or at all.

In the event that we issue shares of

equity or convertible securities, holdings of our existing stockholders would be

After farmers harvest the Fuji apples, they store the apples in

a refrigerated storage room for up to one year until they are sold.

Consequently, sales of our Fuji apples are not seasonal.

Likewise, sales of our

Emperor bananas, which are harvested throughout the year, are not seasonal.

However, our tangerine oranges are harvested and distributed from October to

March each year.

Consequently, sales of our oranges are generally slower during

the second quarter.

Sales of our vegetables generally are not seasonal.

We are required under PRC law to make contributions to the employee benefit plans at specified percentages of the after-tax profit.

In addition, we are required by the PRC law to cover employees in China with various types of social benefits.

We believe that we are in material compliance with the relevant PRC laws.

Executive Officers of the Registrant

The following table sets forth below is information concerning our executive officers.

Chief executive officer and president

Chief operating officer

Huasong Sheena Shen

Chief financial officer

Xiong Luo has been a chief executive officer and president since October 2010 and a director since February 2009.

Luo served as our chief operating officer from January 15, 2009 until April 2010.

Luo is also our corporate secretary, which is not an executive officer.

He also served as chief operating officer of our BVI subsidiary, Organic Region, since 2006.

Luo has also served as the general manager of our PRC operating subsidiaries, Zhuhai Organic and Guangzhou Organic, since 2004.

Luo has more than 20 years’ experience in enterprise planning and operations.

Prior to joining us, Mr.

Luo served from 2001 to 2004, as general manager and managing director of China Environmental Protection Industry Ltd., from 1998 to 2001, as general manager of Beijing World Oasis Technology Limited;

from 1997 to 1998, as general manager of Beijing Chunyi Industry Ltd., and from 1991 to 1997 as general manager of the Zhuhai Guanli plastic machinery plant.

Luo graduated from Guangdong South China Agricultural University in 1985 with a B.A.

Degree and holds seven patents, two of which are related to inventions.

Yan Pan has been our chief operating officer since May 1, 2010.

Pan was a vice president of operations for us from July 2009 until April 2010.

From 2007 to July 2009, Mr.

Pan served as director of the luxury product business for Vasto, an Italian menswear brand owned by a Chinese family, where he oversaw brand positioning, product development, retail development and supplier management.

From 2001 to 2007, Mr.

Pan served as general manager of the Chinese operations of a Swedish outsourcing company, Outsource Supply Management, where he was responsible for overseeing client servicing, suppliers and overall strategic business development from 2001 to 2007.

Pan holds a bachelor of arts degree from Dr.

Sun Yat Sen University in China with a major in English literature, and he took courses for an MBA degree at Rutgers University.

Huasong Sheena Shen has been chief financial officer since October 2010.

She served as vice president – finance from April 2010 until October 2010.

From April 2007 until November 2009, Ms.

Shen was managing partner of Great Wall Research LLC, a financial and accounting consulting firm which provided services to Chinese companies listed in the United States.

From November 2006 until March 2007, Ms.

Shen was chief financial officer of Masada Group Technologies Corporation, a technology company.

From May 2000 until October 2006, Ms.

Shen was employed by JP Morgan Chase in different capacities, with her final position being financial manager – global credit risk management operations from February 2005 until October 2006.

Shen received her BS degree in accounting from Brigham Young University Hawaii and her MBA in finance from the University of Connecticut.

Shen is a certified public accountant and a chartered financial analyst.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business