What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2011-03-31 compared with 2010-04-15 · 345 added, 745 removed, 12 unchanged (99% of the section changed)

An investment in our common stock involves a high degree of risk.

You should carefully consider the risks described below, together with all of the other information included in this annual report, before making an investment decision, and you should only consider an investment in our common stock if you can afford to sustain the loss of your entire investment.

If any of the following risks actually occurs, our business, financial condition or results of operations could suffer.

In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

Because we have limited working capital, we may require

funds for our operations.

At December 31, 2009, we had working capital of approximately

$1.53 million, primarily as a result of the receipt of approximately $3.5

million in financings during the period from June to December 2009.

require additional capital for our operations.

Because of our low stock price

and the lack of an active trading market in our common stock, it may be

difficult for us to raise funds on terms which are favorable to us, if at all.

Our increase in revenue in the year ended December 31, 2009 as compared with the

2008 resulted in large part from increased supplies stemming from our purchase

of long-term leases on which farming cooperatives can grow products for us to

The payment of the full amount of the leases, which was approximately $3.4

million in the year ended December 31, 2009 and approximately $7.2 million for

the year ended December 31, 2008, is due at the beginning of the lease.

for us to expand our business in a manner which seeks to provide us with a

continuing source of supply (subject to conditions which affect farming

generally), we require capital to purchase the leasehold interests.

to raise the necessary funds could impair our ability to expand our business.

Our operations are cash intensive, and our business could be

adversely affected if we fail to maintain sufficient levels of working

We spend a significant amount of cash on our operations,

principally to procure fruits and vegetables.

Historically, our primary capital

needs have been to fund our working capital requirements and our primary sources

of funds have been cash generated from operations.

If we fail to generate

sufficient sales, we may not have sufficient liquidity to fund our operating

costs and our business could be adversely affected.

if available liquidity is

not sufficient to meet our operating requirements, our plans include considering

pursuing financing arrangements or further reducing expenditures as necessary to

meet our cash requirements.

However, there is no assurance that, if required, we

will be able to raise additional capital or reduce discretionary spending to

provide the required liquidity.

Currently, the capital markets for small

capitalization companies are difficult and banking institutions have become

stringent in their lending requirements.

Accordingly, we cannot be sure of the

availability or terms of any third party financing.

Because we restated our financial statements, investors may lack confidence in our ability to present financial information and the results of our operations and it may be difficult for us to raise funds for our operations.

On August 23, 2010, we concluded, after a review of the pertinent facts, that the previously issued financial statements contained in our annual report on Form 10-K for the year ended December 31, 2009 and our quarterly reports on Form 10-Q for the quarters ended March 31, 2010, September 30, 2009, June 30, 2009 and March 31, 2009, respectively, should not be relied upon for reasons set forth in Note 13 of Notes to Consolidated Financial Statements.

This annual report reflects restated financial statements for the year ended December 31, 2009 because of our failure to account properly for the treatment of securities issued in financings during 2009 and 2008.

As a result, our net income, as originally reported, was overstated by approximately $3.5 million for 2009.

Our need to restate our financial statements reflects the inadequacy of our disclosure controls and our controls over financial reporting and may impair our ability to raise funds we require for our operations and may otherwise impair our operations and our relationships with our investors.

Further, we cannot assure you that further restatements will not be required.

Because we have a deficiency in working capital, we will require funds for our operations, including our proposed distribution hub.

At December 31, 2010, we had a working capital deficiency of approximately $2.9 million, primarily as a result of higher accounts payable and accrued expenses and the an approximately $1.0 million derivative liability arising from our financings in 2008.

We may require additional capital for our operations, and, in particular with respect to our distribution hub.

Through December 31, 2010, we have made advances of approximately $14.2 million for the construction of our hub.

We made this payment from cash generated by our operations and from funds which we raised from several small equity offerings in 2009 and 2010.

We anticipate that the total cash investment to launch this business will be $32.4 million, and we have no present commitment for such funds.

Because of our low stock price and the lack of an active trading market in our common stock, it may be difficult for us to raise funds on terms which are favorable to us, if at all.

Our increases in revenue in 2010 compared with 2009 and 2009 compared with 2008 represented in large part from increased sales resulting from our purchase of long-term leases on which farming cooperatives can grow products for us to sell.

The payment of the full amount of the leases, which was approximately $3.3 million in 2010 and $3.4 million in 2009, is due at the beginning of the lease.

In order for us to expand our produce business in a manner which seeks to provide us with a continuing source of supply (subject to conditions which affect farming generally), we require capital to purchase the leasehold interests.

Our failure to raise the necessary funds could impair our ability to expand our business.

Our operations are cash intensive, and our business could be adversely affected if we fail to maintain sufficient levels of working capital.

We spend a significant amount of cash on our operations, principally to procure fruits and vegetables as well as the purchase of long-term leases for farm land for which payment is required at the inception of the lease.

Historically, our primary capital needs have been to fund our working capital requirements and our primary sources of funds have been cash generated from operations.

If we fail to generate sufficient sales, we may not have sufficient liquidity to fund our operating costs and our business could be adversely affected.

If available liquidity is not sufficient to meet our operating requirements, we plan consider pursuing financing arrangements or further reducing expenditures as necessary to meet our cash requirements.

However, there is no assurance that, if required, we will be able to raise additional capital or reduce discretionary spending to provide the required liquidity.

Currently, raising money in the capital markets for small capitalization companies is difficult and banking institutions have become stringent in their lending requirements.

Accordingly, we cannot be sure of the availability or terms of any third party financing.

Since our proposed distribution hub is a new, cash intensive business in which we have no prior experience we may not be able to develop this business or operate this business profitably.

To date, substantially all of our revenue has been derived from the sale of Fuji apples, tangerine oranges and emperor bananas, which we purchase from farming cooperatives to which we lease the land on which the produce is grown.

We are in the process of constructing a distribution hub in the Guangzhou Yuncheng wholesale market.

This business is different from our present business and involved additional risks, including the following:

We will seek to enter into agreements with a wide range of vendors with which we will have no affiliation that will sell their produce in our distribution hub.

We anticipate that most of our revenue from our proposed distribution hub will be generated from fees from the vendors who lease space at the distribution hub.

A significant portion of the fees will be based on a percentage of the sales by the vendors at our distribution hub.

Thus, our revenue from the distribution hub will be in large part dependent upon the success of the independent vendors in selling their products at the distribution hub and their providing us with an accurate determination of their revenue and making the required payment to us in a timely manner.

The failure of the vendors to generate revenue, properly account for their revenue and make the required payments to us could impair our ability to operate the distribution hub profitably.

We will seek to sell products which are very different from the foods that we presently sell, which we expect may include imported organic products.

We do not have experience in purchasing and selling any foods other than our fruits and vegetables, and we would need to hire employees, including managerial employees, with experience in importing organic foods and marketing the foods in the PRC.

Our failure to hire and retain qualified personnel or to select the products for which there is a market and our failure to market and sell these products could impair our ability to generate profits from our business in the distribution hub.

We have two buildings with approximately 600,000 square feet of floor space for our distribution hub and a 130,000 square foot cold storage facility for our wholesale apples distribution business.

We will incur significant expenses in completing and equipping the interior of the buildings.

Although we plan to commence operations by September 2011, we may not be able to meet that timetable, and, if we are not able to obtain necessary financing, it is likely that we will not meet that schedule.

In order to manage a distribution center at which we anticipate a large number of independent and unrelated vendors will be selling a wide range of products, we would need to hire a significant number of employees with experience in managing a distribution center.

Our failure to obtain and retain such key employees could impair our ability to generate a profit from the distribution center.

Although we plan to lease space to different vendors, with each vendor having responsibility for its own product line, we may be subject to liability for actions or conduct by the vendors even though we will have no control over their operations.

We will be required to maintain an inventory for each product that we market.

Because all food products are perishable, if we do not project accurately both our requirements and the prices at which we can sell the products, we may have significant surpluses or shortages of products and we may pay prices which do not generate an adequate gross margin.

Some of our proposed products must be sold very shortly after they are received, often on the same day that they are received, with the result that any unsold products are not salable.

Our failure to estimate our requirements accurately could impair our ability to operate this business profitable.

Although we plan to have the products sold by vendors at our distribution hub tested before we enter into agreements with the vendors and to have spot tests of products being sold performed, we will not control the operations of the independent vendors at our distribution hub, and we may have difficulty enforcing quality control standards for our vendors.

The failure of the vendors to deliver quality products, any product recalls affecting the vendors and public questions or concerns, whether or not justified, relating to the quality or purity of foods sold in our distribution market, could affect the reputation of the distribution hub, which could impair our ability to operate the center profitably.

We would need to develop and implement inventory control systems designed for a business which is different from and significantly larger than our present business.

The failure to implement such a system could impair our ability to operate profitably.

Because we expect to purchase products from non-Chinese suppliers, over whom we have no control, we may have difficulty controlling and monitoring the quality of our products.

The failure to deliver quality products could impair our ability to operate this business profitably.

Although we plan to develop a number of different product lines, our failure to develop only a small portion of these lines may impair our ability to operate the market as a whole profitably.

Both the cost of the construction of the distribution hub and the purchase of inventory require significant cash outlays, and we have no present commitment for the required cash.

Our inability to obtain the necessary funding could impair our ability to develop the distribution hub.

If we are not successful in completing construction of the distribution hub or funding our purchase of an adequate inventory of a variety of funds which we plan to market for our own account or entering into agreements with vendors who would sell their products at our distribution hub, we may not be able to operate this business, in which event we would have to write off our significant investment in the project.

In connection with the proposed development of our distribution hub, we may sell directly to supermarkets and other retail outlets, which will present us with additional risks and financial requirements.

If we are successful in operating our distribution hub, we may then seek to expand our customer base to include supermarkets and other retail stores.

In connection with this aspect of our proposed business, we will be subject to additional risks, including the foregoing:

We would need to develop and implement a marketing program to bring our produce to the attention of a new customer base.

We presently sell almost exclusively at two wholesale markets, which does not require any significant marketing effort.

Our wholesale customers purchase products at these markets for sale to their retail customer base.

We would be seeking to sell directly to the retail customer base.

If we are not successful in establishing a marketing program, we may not be able to operate this phase of our business profitably.

We presently deliver our produce to two wholesale markets at which we sell our produce, and wholesale companies purchase our produce and deliver it to their customers.

If we sell directly to retail markets, we may have the obligation to deliver our produce to some of our retail customers, which will increase our costs.

Any delay in delivery of produce could affect the quality of the produce and could result in a rejection of a shipment if the customer questions the quality of our produce, if the customer had to obtain the produce from other sources or for any other reason.

Any financing we obtain may result in significant dilution to our shareholders.

We have no commitment from any bank or other financing source for our anticipated cash requirements, including those related to the completion of our proposed distribution hub or for any additional working capital which may be required in connection with the operation of the distribution hub and the proposed marketing effort directed at supermarkets and other retail outlets.

If we raise funds through the sale of our equity securities, including convertible debt securities, it may be necessary for us to issue shares at a price which is below the current market price.

Any such sale would result in significant dilution to our shareholders.

We cannot assure you that financing will be available or that any terms which are available would not be unfavorable to us.

We may be unable to manage future rapid growth.

We have grown rapidly over the last few years.

increased by from $5.9 million in 2005 to $108 million in 2009.

continue to expand the volume and variety of products we offer, as well as the

geographical scope of our sales and production facilities.

See Our BusinessOur

Growth Strategy above.

Our business growth could place a significant strain on

our managerial, operational and financial resources.

Our ability to manage

future growth will depend on our ability to continue to implement and improve

operational, financial and management information systems on a timely basis and

to expand, train, motivate and manage our workforce.

Our personnel, systems,

procedures and controls may not be adequate to support our future growth.

Failure to effectively manage our expansion may lead to increased costs, a

decline in sales and reduced profitability.

Our business is subject to weather conditions, natural

disasters and other conditions beyond our control which could affect our

revenue, gross margins and net income.

Severe weather conditions and natural disasters, such as snow,

floods, droughts, frosts, earthquakes or pestilence, which are difficult to

anticipate and cannot be controlled by us, may affect both the supply and the

distribution of our products and otherwise disrupt our operations.

disasters may affect the cost and supply of raw materials, including fruits and

vegetables, or result in reduced supplies of raw materials, lower recoveries of

usable raw materials, higher costs of cold storage if harvests are accelerated

and processing capacity is unavailable or interruptions in our production

schedules if harvests are delayed.

If our supplies of raw materials are reduced,

we may not be able to find enough supplemental supply sources on favorable

terms, if at all, which could impact our ability to supply product to our

customers and adversely affect our business, financial condition and results of

Similarly, if our distribution network is not able to operate, we

would not be able to sell our products.

We have no business interruption or similar insurance to

provide protection from these and other business disruptions.

As a company which sells fresh food, our business can be

impaired by product liability claims, recalls, adverse publicity or negative

public perception regarding particular fruits we sell, our products or our

industry in general could harm our sales and cause consumers to avoid our

The food industry is subject to risks posed by food spoilage

and contamination, product tampering, product recall, and consumer product

liability claims.

Our operations could be impacted by both genuine and

fictitious claims regarding our and our competitors products.

In the event of

product contamination or tampering, we may need to recall some of our products.

A widespread product recall, even a recall of products sold by others, could

result in significant loss due to the cost of conducting a product recall

including destruction of inventory and the loss of sales resulting from the

unavailability of the product for a period of time.

Further, adverse publicity

or negative public perception regarding the type of products that we sell, our

products, our actions relating to our products, or our industry in general could

result in a substantial drop in demand for our products.

This negative public

perception may include publicity regarding the safety or quality of our products

in general, of other companies or of our products specifically.

Negative public

perception may also arise from regulatory investigations or product liability

claims, regardless of whether those investigations involve us or whether any

product liability claim is successful against us.

We could also suffer losses

from a significant product liability judgment against us since we do not have

product liability insurance.

Either a significant product recall or a product

liability judgment, involving either our company or our competitors, could also

result in a loss of consumer confidence in our products or the food category,

and an actual or perceived loss of value of our brands, materially impacting

consumer demand.

We are dependent upon a small number of

We have long-term arrangements to purchase our products from a

limited number of farming cooperatives.

If we are not able to purchase our

products from these farmers, in the event of a product shortage, and it is

necessary for us to purchase from other suppliers, our costs may be greater due

to this kind of short-term nature of arrangements.

The inability to obtain our

produce at a reasonable cost would affect our revenue and gross margins.

Further, if our costs are too high, it may be necessary for us to sell one or

more products at a small or negative margin in order to maintain the

relationship with our customers.

We are dependent upon sales in two agriculture wholesale

Almost all of our products are sold by us at the Guangdong Yun

Cheng Wholesale Market and the Beijing Xin Fadi Agricultural Products Wholesale

Market, two major markets for the sale of agricultural products in their

respective areas where we lease space to sell our products.

Our inability to

sell our products at these markets could impair our sales as well as our ability

to operate profitably.

Because the gross margins for our current products are

not high, any additional expenses resulting from changes in our distribution

methods could impair our ability to operate profitably.

If we cannot establish brand name recognition, our sales may

Because we are seeking to establish brand identity in an

industry where fruits and vegetables are generally considered commodities, we

are dependent upon our ability to develop a reputation as a high quality vendor

of food products.

Our ability to distinguish our products from others is

critical to our ability to market our products as premium foods, rather than

We cannot assure you that our products and brand will achieve and

maintain satisfactory levels of acceptance by independent distributors and

retail consumers to enable us to charge for our products as premium goods, which

would impact our sales and gross margins.

Further, since we are seeking to

promote our foods as premium goods, in times of economic hardship, consumers may

purchase cheaper products which could impact both our sales and, if we lower

prices in order to compete, our gross margin.

Because we are dependent on our management, the loss of our

key executive officers and the failure to hire additional qualified key

personnel could harm our business.

Our business is largely dependent upon the continued efforts of

our chief operating officer, Xiong Luo, and our chairman, Anson Yiu Ming Fong,

who are also directors.

We have grown rapidly over the last few years and, if we implement our distribution hub business, the business growth could place a significant strain on our managerial, operational and financial resources.

In addition to hiring a significant number of employees necessary to operate our expanded business, we will need to expand our management staff to adequate manage a large operation.

If we are not able to implement management controls over this business, we may be unable to operate profitably.

Our ability to manage future growth will depend on our ability to continue to implement and improve operational, financial and management information systems on a timely basis and to expand, train, motivate and manage our workforce.

Our personnel, systems, procedures and controls may not be adequate to support our future growth.

Our failure or inability to effectively manage our expansion may lead to increased costs, a decline in sales and reduced profitability.

Our business is subject to weather conditions, natural disasters and other conditions beyond our control which could affect our revenue, gross margins and net income.

Severe weather conditions and natural disasters, such as floods, droughts, frosts, earthquakes, plant disease or other pestilence, which are difficult to anticipate and cannot be controlled by us, may affect both the supply and the distribution of our products and otherwise disrupt our operations.

Such disasters may affect the cost and supply of raw materials, including fruits and vegetables or result in reduced supplies of raw materials, lower recoveries of usable raw materials, higher costs of cold storage if harvests are accelerated and processing capacity is unavailable or interruptions in our production schedules if harvests are delayed.

If our supplies of raw materials are reduced, we may not be able to find enough supplemental supply sources on favorable terms, if at all, which could impact our ability to supply product to our customers and adversely affect our business, financial condition and results of operations.

Similarly, if our distribution network is not able to operate, we would not be able to sell our products.

Further, to the extent that these factors affect the independent vendors at our proposed distribution hub, our ability to collect fees from these vendors may be materially impaired.

We have no business interruption or similar insurance to provide protection from these and other business disruptions.

As a company which sells fresh food, our business can be impaired by product liability claims, recalls, adverse publicity or negative public perception regarding particular fruits we sell as consumers may avoid our products.

The food industry is subject to risks posed by food spoilage and contamination, product tampering, product recall, and consumer product liability claims.

Our operations could be impacted by both genuine and fictitious claims regarding our and our competitors’ products.

In the event of product contamination or tampering, we may need to recall some of our products.

A widespread product recall could result in significant loss due to the cost of conducting a product recall including destruction of inventory and the loss of sales resulting from the unavailability of the product for a period of time.

Further, adverse publicity or negative public perception regarding the type of products that we sell, our products, our actions relating to our products, or our industry in general, including recalls relating to products sold by others, could result in a substantial drop in demand for our products.

This negative public perception may include publicity regarding the safety or quality of our products in general, of other companies or of our products specifically.

Negative public perception may also arise from regulatory investigations or product liability claims, regardless of whether those investigations involve us or whether any product liability claim is successful against us.

We could also suffer losses from a significant product liability judgment against us since we do not have product liability insurance.

Either a significant product recall or a product liability judgment, involving either our company or our competitors, could also result in a loss of consumer confidence in our products or the food category, and an actual or perceived loss of value of our brands, materially impacting consumer demand.

Climate changes could affect the availability and cost of produce.

Since all of our products are agricultural products, our ability to purchase produce and the cost and quality of our produce may be affected both by long-term climate changes as well as season variations in weather conditions which vary from season to season.

Changes in rainfall and unusual variations in temperature during the growing season could affect both the availability and quality of our produce and our ability to deliver our produce to market.

We are dependent upon a small number of suppliers.

We only have long-term arrangements to purchase our produce from five farming cooperatives whose farmers grow produce on land leased from us.

Because prices are not set in the long-term contracts that we enter into with the cooperatives, any increase in the prices of our produce would affect the price at which we can sell the produce.

If we are not able to raise our prices to pass on increased costs to our customers, we would be unable to maintain our profit margins.

Similarly, in times of decreasing prices, we may have to sell our products at prices which are lower than the prices at which we purchased our produce.

Further, although it has not been necessary for us to purchase produce from other suppliers through the date of this annual report, in the event that we are not able to purchase our produce from these farming cooperative or in the event of a product shortage, it may become necessary for us to purchase from other suppliers, which could result in increased costs as a result of both market conditions and the short-term nature of arrangements.

Our inability to obtain produce at a reasonable cost would affect our revenue and gross margins.

Further, if our costs are too high, it may be necessary for us to sell one or more products at a small or negative margin in order to maintain the relationship with our customers.

We are dependent upon sales in two agriculture wholesale markets.

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 sold almost all of our produce from these two markets in 2010 and 2009.

Our inability to sell our products at these markets could impair our sales as well as our ability to operate profitably.

Because the gross margins for our products are not high, any additional expenses resulting from changes in our distribution methods could impair our ability to operate profitably.

If we cannot establish brand name recognition, our sales may be impaired.

Because we are seeking to establish brand identity in an industry where fruits and vegetables are generally considered commodities, we are dependent upon our ability to develop a reputation as a high quality vendor of food products.

Our ability to distinguish our products from others is critical to our ability to market our products as premium foods, rather than commodities.

Although we try to market our produce as premium food, we cannot assure you that consumers will pay the price associated with a premium, rather than a commodity, product.

We cannot assure you that our products and brand will achieve and maintain satisfactory levels of acceptance by independent distributors and retail consumers to enable us to charge for our products as premium goods, which would impact our sales and gross margins.

Further, since we are seeking to promote our foods as premium goods, in times of economic hardship, consumers may purchase cheaper products which could impact both our sales and, if we lower prices in order to compete, our gross margin.

Because we experience seasonal fluctuations in our sales, our quarterly results will fluctuate and our annual performance will depend largely on results from two quarters.

Our business is seasonal, reflecting the harvest season of our primary products from mid –September to mid –November.

Typically, a substantial portion of our revenues are earned during the second half of the year.

We generally experience lowest revenues during our second quarter.

Sales in the second half of the year accounted for approximately 56% of our revenue for 2010 and 63% of our revenue for 2009.

If sales in the second half of the year are lower than expected, our operating results for the year would be adversely affected since any decline in sales in these periods would have a disproportionately large impact on our annual operating results.

Because we are dependent on our chief executive officer, and the loss of his services and the failure to hire additional qualified key personnel could harm our business.

Our business is largely dependent upon the continued efforts of our senior executive officers.

Anson Yiu Ming Fong, who was our chief executive officer and president until October 2010, when he retired for reasons of health, and continued as chairman of the board until his death in October 2010, was important to the development of our business.

Prior to April 2010, Mr.

Luo was our chief operating officer.

Luo resigned from this position in April 2010 and, following the resignation of Mr.

Luo was elected chief executive officer and president in October 2010.

The loss of Mr.

Fong or any of our other key

employees could have a material adverse effect upon our ability to operate

Our officers and directors control a significant amount of

our common stock.

As of December 31, 2009, our officers and directors, together

with members of their families owned, directly or through companies owned by

them, approximately 66% of our outstanding common stock and they would have the

power to elect all of our directors and to take any action requiring shareholder

Efforts to comply with recently enacted changes in

securities laws and regulations will increase our costs and require additional

management resources, and we still may fail to comply.

The SEC has adopted rules requiring public companies to include

a report of management on our internal controls over financial reporting in our

annual reports on Form 10-K, and, commencing with our year ended December 31,

2010, our independent registered public accounting firm must attest to and

report on managements assessment of the effectiveness of our internal controls

over financial reporting.

Organic Region was not a public company at December

31, 2008 and was not subject to the internal controls requirements of the

Sarbanes Oxley Act at that date.

We cannot assure you that, when management

evaluates our financial controls in connection with our 2009 financial

statements, we will not have identified material weaknesses in our internal

controls or disclosure controls.

We cannot assure you that we will be successful

in addressing any issues that may be raised.

If we are unable to address these

issues, or are unable to conclude that we have effective internal controls over

financial reporting or if our independent auditors are unable to provide us with

an unqualified report as to the effectiveness of our internal controls over

financial reporting for 2010, investors could lose confidence in the reliability

of our financial statements, which could result in a decrease in the value of

our securities.

We have not yet begun a formal process to evaluate our internal

controls over financial reporting.

Given the status of our efforts, coupled with

the fact that guidance from regulatory authorities in the area of internal

controls continues to evolve, substantial uncertainty exists regarding our

ability to comply by applicable deadlines.

We will require additional financing to grow our business,

which funds may not be available to us on favorable terms, or at all.

additional funds, we may not be able to maintain or expand our business.

We recently raised approximately $3 million pursuant to several

private placements, which funds are being used to finance the construction of

our green food hub and acquire additional lands to increase our stock of Fuji

apples and Emperor bananas.

We anticipate that the total investment to launch

our green foods business will be $15 million.

We will need to raise a

substantial amount of capital from equity or debt markets, or to borrow funds

from local banks, in order to complete the construction of our hub and launch

our new green foods business.

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 diluted.

In addition, there is no assurance that we will

successfully manage and integrate the sale of our new green food products.

If our competitors sell higher quality products or similar

products at a lower price, or if they are otherwise more successful in

penetrating the market, our financial condition would be affected.

We face competition from both Chinese and international

companies, many of which are better known and have greater financial resources

Many of these companies have longer operating histories and have more

established relationships with customers.

If our competitors are successful in

providing similar or better products or provide products at a lower price than

we offer our products, or if they are otherwise more successful in penetrating

the market, we could experience a decline in demand for our products, which

would negatively impact our sales and results of operations.

An increase in the cost of raw materials will affect our

We purchase all of our raw materials, which currently consist

primarily of Fuji apples, Emperor bananas and tangerine oranges, from three

plantations in the PRC.

Because prices are not set in the long-term contracts

that we enter into with the cooperatives that cultivate these plantations, any

increase in the prices of our raw materials would affect the price at which we

can sell our products.

If we are not able to raise our prices to pass on

increased costs to our customers, we would be unable to maintain our profit

Similarly, in times of decreasing prices, we may have to sell our

products at prices which are lower than the prices at which we purchased our raw

The current economic and financial crisis may have a

material adverse effect on our results.

The crisis of the financial and credit markets worldwide in

2008 and 2009has led to a severe economic recession worldwide, and the outlook

for 2010 is still uncertain.

A continuation or worsening of unfavorable economic

conditions, including the credit and capital markets disruptions, could have an

adverse impact on our business, operating results or financial condition in a

number of ways.

For example, we may experience declines in revenues,

profitability and cash flows as a result of reduced orders, delays in receiving

orders, delays or defaults in payment or other factors caused by the economic

problems of our customers and prospective customers.

In addition, changes and

volatility in the equity, credit and foreign exchange markets and in the

competitive landscape make it increasingly difficult for us to predict our

revenues and earnings into the future.

We may enter into additional financing agreements which may

have a dilutive effect to our earnings per share and the rights of certain

stockholders.

Additional financings could result in significant dilution to

our earnings per share or the issuance of securities with rights superior to our

current outstanding securities.

For instance, we may grant registration rights

to investors purchasing our equity or debt securities in the future.

Luo or any of our other key employees could have a material adverse effect upon our ability to operate profitably.

Our officers, directors and related parties control a significant amount of our common stock.

As of March 15, 2011, our officers, directors and the estate of Anson Yiu Ming Fong, our former chief executive officer, owned or controlled approximately 30.2% of our outstanding common stock and they, together with members of their families owned, directly or through companies owned by them, approximately 32.8% of our outstanding common stock.

Efforts to comply with securities laws and regulations will increase our costs and require additional management resources, and we still may fail to comply.

The SEC requires us, as a reporting company, to include a report of management on our internal controls over financial reporting in our annual reports on Form 10-K.

Organic Region was not a public company at December 31, 2008 and was not subject to the internal controls requirements of the Sarbanes Oxley Act at that date.

As of December 31, 2009 and 2010, our financial controls were not effective and we have identified material weaknesses in our internal controls and disclosure controls.

We cannot assure you that we will be successful in addressing any issues that may be raised particularly if we are able to expand our business to operate our proposed distribution hub.

If we are unable to address these issues, or are unable to conclude that we have effective internal controls over financial reporting or if our independent auditors are unable to provide us with an unqualified report as to the effectiveness of our internal controls over financial reporting for 2011, investors could lose confidence in the reliability of our financial statements, especially in view of our need to restate prior financial statements, which could result in a decrease in the value of our securities.

We cannot assure you that we will be able to adequately address any internal controls issues in a timely manner.

Further, although the Dodd-Frank Wall Street Reform and Consumer Protection Act exempts companies with a public float of less than $75 million from the requirement that our independent registered public accounting firm attest to our financial controls, this exemption does not affect the requirement that we include a report of management on our internal controls over financial reporting and will not affect the requirement to include the auditor’s attestation if our public float exceeds $75 million.

Regardless of whether we are required to receive an attestation from our independent registered public accounting firm with respect to our internal controls, if we are unable to do so, especially in view of our need to restate financial statements for the years ended December 31, 2009 and 2008 and the quarters ended March 31, 2010, September 30, 2009, June 30, 2009 and March 31, 2009, potential investors may lose confidence in the reliability of our financial statements and our stock price and ability to obtain equity or debt financing as needed could suffer.

RISKS RELATED TO OUR CORPORATE STRUCTURE

We control Guangzhou Greenland through a series of

contractual arrangements, which may not be as effective in providing control

over the entity as direct ownership and may be difficult to enforce.

We operate our business in the PRC through our variable

interest entity, Guangzhou Greenland.

Guangzhou Greenland holds the licenses,

approvals and assets necessary to operate our business in the PRC.

equity ownership interest in Guangzhou Greenland and rely on contractual

arrangements with Guangzhou Greenland and its shareholders that allow us to

substantially control and operate Guangzhou Greenland.

These contractual

arrangements may not be as effective as direct ownership in providing control

over Guangzhou Greenland because Guangzhou Greenland or its shareholders could

breach the arrangements.

Our contractual arrangements with Guangzhou Greenland are

governed by PRC law.

Accordingly, these contracts would be interpreted in

accordance with PRC law and any disputes would be resolved in accordance with

PRC legal procedures.

If Guangzhou Greenland or its shareholders fail to perform

their respective obligations under these contractual arrangements, we may have

to incur substantial costs to enforce such arrangements and rely on legal

remedies under PRC law, including seeking specific performance or injunctive

relief, and claiming damages.

The legal environment in the PRC is not as developed as in the

United States and uncertainties in the Chinese legal system could limit our

ability to enforce these contractual arrangements.

In the event that we are

unable to enforce these contractual arrangements, our business, financial

condition and results of operations could be materially and adversely affected.

If the PRC government determines that the contractual

arrangements through which we control Guangzhou Greenland do not comply with

applicable regulations, our business could be adversely affected.

Although we believe our contractual relationships through which

we control Guangzhou Greenland comply with current licensing, registration and

regulatory requirements of the PRC, we cannot assure you that the PRC government

would agree, or that new and burdensome regulations will not be adopted in the

If the PRC government determines that our structure or operating

arrangements do not comply with applicable law, it could revoke our business and operating licenses, require us to

discontinue or restrict our operations, restrict our right to collect revenues,

require us to restructure our operations, impose additional conditions or

requirements with which we may not be able to comply, impose restrictions on our

business operations or on our customers, or take other regulatory or enforcement

actions against us that could be harmful to our business.

The controlling shareholder of Guangzhou Greenland has

potential conflicts of interest with us, which may adversely affect our

The controlling shareholders of Guangzhou Greenland, Mr.

Luo, is also our chief operating officer, a director of ours and a beneficial

holder of our common shares.

Luo holds a larger interest in Guangzhou

Greenland when compared to his beneficial ownership in our shares.

interest between his dual roles as shareholder, officer and director of both

Guangzhou Greenland and us may arise.

We cannot assure you that when conflicts

of interest arise, Mr.

Luo will act in the best interests of the Company or that

conflicts of interest will be resolved in our favor.

Our contractual arrangements with Xiong Luo, our chief executive officer and president, may not be as effective in providing control over Guangzhou Greenland as direct ownership.

Since the law of the PRC limits foreign equity ownership in companies in China, most of our revenue and net income is derived from Guangzhou Greenland, which is owned by Xiong Luo, our chief executive officer and president, and we have no equity ownership interest in the Guangzhou Greenland.

We rely on contractual arrangements with Mr.

Luo to control and operate this business.

These contractual arrangements may not be effective in providing control over the Guangzhou Greenland as direct ownership.

We cannot assure you that the Mr.

Luo would always act in our best interests.

Because our contracts with Mr.

Luo are governed by the laws of the PRC, and because the legal system of the PRC is not as well developed as the United States legal system, we may have difficulty in enforcing any rights we may have under our agreements with Mr.

Our contractual arrangements with Mr.

Luo would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures.

Luo fails to perform his obligations under these contracts, we may have to incur substantial costs to enforce such arrangements and rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, and claiming damages, which may not be available.

The legal environment in the PRC is not as developed as in the United States and uncertainties in the Chinese legal system could limit our ability to enforce these contractual arrangements.

In the event that we are unable to enforce these contractual arrangements, our business, financial condition and results of operations could be materially and adversely affected since we could cease to have any control over the operations of Guangzhou Greenland, which is required in order to include Guangzhou Greenland’s revenue and income in our financial statements.

If the PRC government determines that the contractual arrangements through which we control Guangzhou Greenland do not comply with applicable regulations, our business could be adversely affected.

Although we believe our contractual relationships through which we control Guangzhou Greenland comply with current licensing, registration and regulatory requirements of the PRC, we cannot assure you that the PRC government would agree, or that new and burdensome regulations will not be adopted in the future.

If the PRC government determines that our structure or operating arrangements do not comply with applicable law, it could revoke our business and operating licenses, require us to discontinue or restrict our operations, restrict our right to collect revenues, require us to restructure our operations, impose additional conditions or requirements with which we may not be able to comply, impose restrictions on our business operations or on our customers, or take other regulatory or enforcement actions against us that could be harmful to our business.

Luo, as the owner Guangzhou Greenland, has potential conflicts of interest with us, which may adversely affect our business.

Guangzhou Greenland is not a corporate entity but is a proprietorship owned by Xiong Luo, who is our chief executive officer and president and a director.

Conflicts of interest between his dual roles as owner of Guangzhou Greenland and as one of our officers and a director may arise.

We cannot assure you that when conflicts of interest arise, Mr.

Luo will act in our best interests or that conflicts of interest will be resolved in our favor.

In addition, Mr.

breach or cause Guangzhou Greenland to breach or refuse to renew the existing

contractual arrangements that allow us to receive economic benefits from

Guangzhou Greenland.

Luo may breach or refuse to renew the existing contractual arrangements that allow us to receive economic benefits from Guangzhou Greenland.

We rely on Mr.

Luo to act in good faith and in the best

interests of the Company, and not use his positions for personal gain.

cannot resolve any conflicts of interest or disputes between us and Mr.

would have to rely on legal proceedings, which could result in disruption of our

business and substantial uncertainty as to the outcome of any such legal

RISKS ASSOCIATED WITH COMPANIES CONDUCTING BUSINESS IN THE

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.

We conduct substantially all of our operations and generate

most of our revenue in China.

Accordingly, our business, financial condition,

results of operations and prospects are affected significantly by economic,

political and legal developments in China.

The PRC economy differs from the

economies of most developed countries in many respects, including:

a higher level of government involvement;

a early stage of development of the market-oriented sector of the economy;

a rapid growth rate;

a higher level of control over foreign exchange;

the allocation of resources.

As the PRC economy has been transitioning from a planned

economy to a more market-oriented economy, the PRC government has implemented

various measures to encourage economic growth and guide the allocation of

While these measures may benefit the overall PRC economy, they may

also have a negative effect on us.

Although the PRC government has in recent years implemented

measures emphasizing the utilization of market forces for economic reform, the

PRC government continues to exercise significant control over economic growth in

China through the allocation of resources, controlling the payment of foreign

currency-denominated obligations, setting monetary policy and imposing policies

that impact particular industries or companies in different ways.

Any adverse change in economic conditions or government

policies in China could have a material adverse effect on the overall economic

growth in China, which in turn could lead to a reduction in demand for our

services and consequently have a material adverse effect on our business and

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.

Operators within the PRC food processing industry are subject

to compliance with PRC food hygiene and safety laws and regulations.

our business does not involve processed foods, these laws and regulations may

nonetheless require us to obtain a hygiene license.

They also set out hygiene

standards with respect to food and food additives, packaging and containers,

labeling on packaging as well as hygiene requirements for food production and

sites, facilities and equipment used for the transportation and the sale of

Failure to comply with PRC food hygiene and safety laws may result in

fines, suspension of operations, loss of hygiene license and, in certain cases,

criminal proceedings against an enterprise and its management.

believe that we are in compliance with current PRC food hygiene and safety laws

and regulations that relate to our business, in the event that such laws and

regulations become more stringent or widen in scope, we may fail to comply with

such laws, or if we comply, our production and distribution costs may increase,

and we may be unable to pass these additional costs on to our customers.

Because the scope of our business license is limited, we may

need government approval to expand our business.

Our operating subsidiaries are wholly foreign-owned

enterprises, commonly known as WFOEs.

The scope of business is narrowly defined

for all businesses in China, and a WFOE can only conduct business within its

approved business scope, which appears on the business license.

permits us to engage in our present businesses.

Any change in the scope of our

business requires further application and government approval.

We cannot assure

you that we will be able to obtain the necessary government approval for any

change or expansion of our business.

If the PRC enacts regulations which forbid or restrict

foreign investment, our ability to grow may be severely impaired.

We intend to expand our business both by increasing our product

range, entering into joint ventures and making acquisitions of companies in

related industries.

Many of the rules and regulations that we would face are not

explicitly communicated, and we may be subject to rules that would affect our

ability to grow, either internally or through acquisition of other Chinese or

foreign companies.

There are also substantial uncertainties regarding the proper

interpretation of current laws and regulations of the PRC.

regulations that forbid foreign investment could severely impair our businesses

and prospects.

Additionally, if the relevant authorities find us in violation of

PRC laws or regulations, they would have broad discretion in dealing with such a

violation, including, without limitation:

Luo to act in good faith and in our best interests, and not use his positions for personal gain.

If we cannot resolve any conflicts of interest or disputes between us and Mr.

Luo, we would have to rely on legal proceedings, which could result in disruption of our business and substantial uncertainty as to the outcome of any such legal proceedings.

RISKS ASSOCIATED WITH COMPANIES CONDUCTING BUSINESS IN THE PRC

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.

Operators within the PRC food processing industry are subject to compliance with PRC food hygiene and safety laws and regulations.

Although our business does not involve processed foods, these laws and regulations may nonetheless require us to obtain a hygiene license and may apply to our proposed green hub distribution business.

These regulations also set out hygiene standards with respect to food and food additives, packaging and containers, labeling on packaging as well as hygiene requirements for food production and sites, facilities and equipment used for the transportation and the sale of food.

Failure to comply with PRC food hygiene and safety laws may result in fines, suspension of operations, loss of hygiene license and, in certain cases, criminal proceedings against an enterprise and its management.

Although we believe that we are in compliance with current PRC food hygiene and safety laws and regulations that relate to our business, in the event that such laws and regulations become more stringent or widen in scope, we may fail to comply with such laws, or if we comply, our production and distribution costs may increase, and we may be unable to pass these additional costs on to our customers.

Further, in connection with our proposed distribution hub, we may have liability if our suppliers fail to comply with applicable regulations.

Because the scope of our business license is limited, we may need government approval to expand our business.

Our operating subsidiaries are wholly foreign-owned enterprises, commonly known as WFOEs.

The scope of business is narrowly defined for all businesses in China, and a WFOE can only conduct business within its approved business scope, which appears on the business license.

Our license permits us to engage in our present businesses.

Any change in the scope of our business requires further application and government approval.

Inevitably, there is a negotiation with the authorities to approve as broad a business scope as is permitted, and we cannot assure you that we will be able to obtain the necessary government approval for any change or expansion of our business.

If the PRC enacts regulations which forbid or restrict foreign investment, our ability to grow may be severely impaired.

We intend to expand our business both by increasing our product range, selling products directly to supermarkets and other retail outlets, developing our distribution hub, entering into joint ventures and making acquisitions of companies in related industries.

Many of the rules and regulations that we would face are not explicitly communicated, and we may be subject to rules that would affect our ability to grow, either internally or through acquisition of other Chinese or foreign companies.

There are also substantial uncertainties regarding the proper interpretation of current laws and regulations of the PRC.

New laws or regulations that forbid foreign investment could severely impair our businesses and prospects.

Additionally, if the relevant authorities find us in violation of PRC laws or regulations, they would have broad discretion in dealing with such a violation, including, without limitation:

levying fines;

1 unchanged sentence

requiring that we restructure our ownership or operations.

Any deterioration of political relations between the United

States and the PRC could impair our operations.

The relationship between the United States and the PRC is

subject to sudden fluctuation and periodic tension.

Changes in political

conditions in the PRC and changes in the state of Sino-U.S.

relations are

difficult to predict and could adversely affect our operations or cause

potential acquisition candidates or their goods and services to become less

attractive even though we do not sell our products outside of the PRC.

change could lead to a decline in our profitability.

Any weakening of relations

between the United States and the PRC could have a material adverse effect on

our operations, particularly in our efforts to raise capital to expand our

business activities.

Our operations and assets in the PRC are subject to

significant political and economic uncertainties.

Government policies are subject to rapid change and the

government of the PRC may adopt policies which have the effect of hindering

private economic activity and greater economic decentralization.

assurance that the government of the PRC will not significantly alter its

policies from time to time without notice in a manner with reduces or eliminates

any benefits from its present policies of economic reform.

In addition, a

substantial portion of productive assets in the PRC remains government-owned.

For instance, all land is state-owned and leased to business entities or

individuals through governmental granting of state-owned land use rights.

granting process is typically based on government policies at the time of

granting, which could be lengthy and complex.

This process may adversely affect

our future expansion, especially as we are seeking both to expand and diversify

our fruit and vegetable production.

The government of the PRC also exercises

significant control over Chinas economic growth through the allocation of

resources, controlling payment of foreign currency and providing preferential

treatment to particular industries or companies.

Uncertainties may arise with

changing of governmental policies and measures.

In addition, changes in laws and

regulations, or their interpretation, or the imposition of confiscatory

taxation, restrictions on currency conversion, imports and sources of supply,

devaluations of currency, the nationalization or other expropriation of private

enterprises, as well as adverse changes in the political, economic or social

conditions in the PRC, could have a material adverse effect on our business,

results of operations and financial condition.

Our operations may not develop in the same way or at the

same rate as might be expected if the PRC economy were similar to the

market-oriented economies of OECD member countries.

The economy of the PRC has historically been a nationalistic,

planned economy, meaning it functions and produces according to governmental

plans and pre-set targets or quotas.

In certain aspects, the PRCs economy has

been making a transition to a more market-oriented economy, although the

government imposes price controls on certain products and in certain industries.

However, we cannot predict the future direction of these economic reforms or the

effects these measures may have.

The economy of the PRC also differs from the

economies of most countries belonging to the Organization for Economic

Cooperation and Development (the OECD), an international group of member

countries sharing a commitment to democratic government and market economy.

the level of state-owned enterprises in the PRC, as well as the level of

governmental control over the allocation of resources is greater than in most

of the countries belonging to the OECD;

the level of capital reinvestment is lower in the PRC than in other

countries that are members of the OECD;

the government of the PRC has a greater involvement in general in the

economy and the economic structure of industries within the PRC than other

countries belonging to the OECD;

the PRC has various impediments in place that make it difficult for

foreign firms to obtain local currency, as opposed to other countries

belonging to the OECD where exchange of currencies is generally free from

As a result of these differences, our business may not develop

in the same way or at the same rate as might be expected if the economy of the

PRC were similar to those of the OECD member countries.

Any deterioration of political relations between the United States and the PRC could impair our operations.

The relationship between the United States and the PRC is subject to sudden fluctuation and periodic tension.

Changes in political conditions in the PRC and changes in the state of Sino-U.S.

relations are difficult to predict and could adversely affect our operations or cause potential acquisition candidates or their goods and services to become less attractive even though we sell almost all of our products in the PRC.

Such a change could lead to a decline in our profitability.

Any weakening of relations between the United States and the PRC could have a material adverse effect on our operations, particularly in our efforts to raise capital to expand our business activities.

Our operations and assets in the PRC are subject to significant political and economic uncertainties.

Government policies are subject to rapid change and the government of the PRC may adopt policies which have the effect of hindering private economic activity and greater economic decentralization.

There is no assurance that the government of the PRC will not significantly alter its policies from time to time without notice in a manner with reduces or eliminates any benefits from its present policies of economic reform.

In addition, a substantial portion of productive assets in the PRC remains government-owned.

For instance, all land is state-owned and leased to business entities or individuals through governmental granting of state-owned land use rights.

The granting process is typically based on government policies at the time of granting, which could be lengthy and complex.

This process may adversely affect our future expansion, especially as we are seeking both to expand and diversify our fruit and vegetable production.

The government of the PRC also exercises significant control over China’s economic growth through the allocation of resources, controlling payment of foreign currency and providing preferential treatment to particular industries or companies.

Uncertainties may arise with changing of governmental policies and measures.

In addition, changes in laws and regulations, or their interpretation, or the imposition of confiscatory taxation, restrictions on currency conversion, imports and sources of supply, devaluations of currency, the nationalization or other expropriation of private enterprises, as well as adverse changes in the political, economic or social conditions in the PRC, could have a material adverse effect on our business, results of operations and financial condition.

Our operations may not develop in the same way or at the same rate as might be expected if the PRC economy were similar to the market-oriented economies of OECD member countries.

The economy of the PRC has historically been a nationalistic, “planned economy,” meaning it functions and produces according to governmental plans and pre-set targets or quotas.

In certain aspects, the PRC’s economy has been making a transition to a more market-oriented economy, although the government imposes price controls on certain products and in certain industries.

However, we cannot predict the future direction of these economic reforms or the effects these measures may have.

The economy of the PRC also differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development (the “OECD”), an international group of member countries sharing a commitment to democratic government and market economy.

For instance:

the level of state-owned enterprises in the PRC, as well as the level of governmental control over the allocation of resources is greater than in most of the countries belonging to the OECD;

the level of capital reinvestment is lower in the PRC than in other countries that are members of the OECD;

the government of the PRC has a greater involvement in general in the economy and the economic structure of industries within the PRC than other countries belonging to the OECD;

the PRC has various impediments in place that make it difficult for foreign firms to obtain local currency, as opposed to other countries belonging to the OECD where exchange of currencies is generally free from restriction.

As a result of these differences, our business may not develop in the same way or at the same rate as might be expected if the economy of the PRC were similar to those of the OECD member countries.

Our business may be affected by inflationary forces affecting the Chinese economy.

As a result of price increases in many products, the government of the PRC has expressed concern about the effects and potential effects of inflation on Chinese consumers.

To the extent that inflationary pressures affect our produce, our costs may increase without our ability to increase our prices proportionately.

We cannot predict what steps, if any, the government will take to combat either inflation or the fear of inflation or how it will affect our business.

Regardless of any steps that the government may take, if we raise our prices to reflect our additional costs consumers may purchaser lower-priced fruit, which would affect our revenues, and to the extent that we do not raise our prices, our margin may be impaired.

Price controls may affect both our revenues and net income.

The laws of the PRC provide for the government to fix and

adjust prices.

Although our products are not presently subject to price

controls, the government has the power to impose controls on both the price at

which we sell products and the price we pay for products.

To the extent that we

become subject to price control, our revenue, gross profit, gross margin and net

income will be affected since the revenue we derive from our sales would be

limited by price controls on our selling prices and, unless there is also price

control on the products that we purchase from our suppliers, we may face no

limitation on our costs.

Further, if price controls affect both our revenue and

our costs, our ability to be profitable and the extent of our profitability will

be effectively subject to determination by the applicable regulatory authorities in the PRC.

We cannot assure

you that the government will not adopt price controls that affect our business.

Because all of our executive officers and the majority of

our directors reside outside of the United States, it may be difficult for you

to enforce your rights against them or enforce United States court judgments

against them in the PRC.

Most of our directors and all of our executive officers reside

in the PRC and substantially all of our assets are located in the PRC.

therefore be difficult for United States investors to enforce their legal

rights, to effect service of process upon our directors or officers or to

enforce judgments of United States courts predicated upon civil liabilities and

criminal penalties of our directors and officers under federal securities laws.

Further, it is unclear if extradition treaties now in effect between the United

States and the PRC would permit effective enforcement of criminal penalties of

the federal securities laws.

We may have limited legal recourse under Chinese law if

disputes arise under contracts with third parties.

Almost all of our agreements with our employees and third

parties, including our supplier and customers, are governed by the laws of the

The legal system in the PRC is a civil law system based on written

Unlike common law systems, such as we have in the United States, it is

a system in which decided legal cases have little precedential value.

government of the PRC has enacted some laws and regulations dealing with matters

such as corporate organization and governance, foreign investment, commerce,

taxation and trade.

However, their experience in implementing, interpreting and

enforcing these laws and regulations is limited, and our ability to enforce

commercial claims or to resolve commercial disputes is unpredictable.

resolution of these matters may be subject to the exercise of considerable

discretion by agencies of the PRC, and forces unrelated to the legal merits of a

particular matter or dispute may influence their determination.

Any rights we

may have to specific performance or to seek an injunction under Chinese law are

severely limited, and without a means of recourse by virtue of the Chinese legal

system, we may be unable to prevent these situations from occurring.

occurrence of any such events could have a material adverse effect on our

business, financial condition and results of operations.

Because we have limited business insurance in the PRC, we

may not be protected from risks that are customarily covered by insurance in the

United States.

We have and will continue to maintain workers insurance for

all of our workers on our processing lines, at our wholesale centers and on our

plantation bases in Luo Chuan and Wanqingsha.

However, business insurance is not

readily available in the PRC.

To the extent that we suffer a loss of a type

which would normally be covered by insurance in the United States, such as

product liability and general liability insurance, we would incur significant

expenses in both defending any action and in paying any claims that result from

a settlement or judgment.

Failure to comply with the United States Foreign Corrupt

Practices Act could subject us to penalties and other adverse consequences.

We are subject to the United States Foreign Corrupt Practices

Act, which generally prohibits United States companies from engaging in bribery

or other prohibited payments to foreign officials for the purpose of obtaining

or retaining business.

Foreign companies, including some that may compete with

us, are not subject to these prohibitions.

Corruption, extortion, bribery,

pay-offs, theft and other fraudulent practices occur from time-to-time in the

We can make no assurance, however, that our employees or other agents will

not engage in such conduct for which we might be held responsible.

employees or other agents are found to have engaged in such practices, we could

suffer severe penalties and other consequences that may have a material adverse

effect on our business, financial condition and results of operations.

If the United States imposes trade sanctions on the PRC due

to its currency, export or other policies, our ability to succeed in the

international markets may be diminished.

The PRC currently pegs its currency to a basket of

currencies, including United States dollar.

This means that each unit of Chinese

currency has a set ratio for which it may be exchanged for United States

currency, as opposed to having a floating value like other countries currencies.

The laws of the PRC give the government authority to fix and adjust prices, and the government of the PRC has announced its concern over rising food prices.

Although our products are not presently subject to price controls, the government has the power to impose controls on both the price at which we sell products and the price we pay for products.

To the extent that we become subject to price control, our revenue, gross profit, gross margin and net income will be affected since the revenue we derive from our sales would be limited by price controls on our selling prices and, unless there is also price control on the products that we purchase from our suppliers, we may face no limitation on our costs.

Further, if price controls affect both our revenue and our costs, our ability to be profitable and the extent of our profitability will be effectively subject to determination by the applicable regulatory authorities in the PRC.

We cannot assure you that the government will not adopt price controls that affect our business.

Because our officers and some of our directors reside outside of the United States, it may be difficult for you to enforce your rights against them or enforce United States court judgments against them in the PRC.

Most of our directors and executive officers reside in the PRC and substantially all of our assets are located in the PRC.

It may therefore be difficult for United States investors to enforce their legal rights, to effect service of process upon our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of our directors and officers under federal securities laws.

Further, it is unclear if extradition treaties now in effect between the United States and the PRC would permit effective enforcement of criminal penalties of the federal securities laws.

We may have limited legal recourse under Chinese law if disputes arise under contracts with third parties.

Almost all of our agreements with our employees and third parties, including our supplier and customers and our agreement with Mr.

Luo with respect to Guangzhou Greenland, are governed by the laws of the PRC.

The legal system in the PRC is a civil law system based on written statutes.

Unlike common law systems, such as we have in the United States, it is a system in which decided legal cases have little precedential value.

The government of the PRC has enacted some laws and regulations dealing with matters such as corporate organization and governance, foreign investment, commerce, taxation and trade.

However, their experience in implementing, interpreting and enforcing these laws and regulations is limited, and our ability to enforce commercial claims or to resolve commercial disputes is unpredictable.

The resolution of these matters may be subject to the exercise of considerable discretion by agencies of the PRC, and forces unrelated to the legal merits of a particular matter or dispute may influence their determination.

Any rights we may have to specific performance or to seek an injunction under Chinese law are severely limited, and without a means of recourse by virtue of the Chinese legal system, we may be unable to prevent these situations from occurring.

The occurrence of any such events could have a material adverse effect on our business, financial condition and results of operations.

Because we have limited business insurance in the PRC, we may not be protected from risks that are customarily covered by insurance in the United States.

We have and will continue to maintain workers’ insurance for all of our workers on our processing lines, at our wholesale centers and on our plantation bases in Luochuan and Wanqingsha.

However, business insurance is not readily available in the PRC.

To the extent that we suffer a loss of a type which would normally be covered by insurance in the United States, such as product liability and general liability insurance, we would incur significant expenses in both defending any action and in paying any claims that result from a settlement or judgment.

Failure to comply with the United States Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.

We are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business.

Foreign companies, including some that may compete with us, are not subject to these prohibitions.

Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time-to-time in the PRC.

We can make no assurance, however, that our employees or other agents will not engage in such conduct for which we might be held responsible.

If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

If the United States imposes trade sanctions on the PRC due to its currency, export or other policies, our ability to succeed in the international markets may be diminished .

The PRC currently “pegs” its currency to a basket of currencies, including United States dollar.

This means that each unit of Chinese currency has a set ratio for which it may be exchanged for United States currency, as opposed to having a floating value like other countries’ currencies.

This policy is currently under review by policy makers in the United States.

Trade groups in the United States have blamed the cheap value of the Chinese

currency for causing job losses in American factories, giving exporters an

unfair advantage and making its imports expensive.

There is increasing pressure

for the PRC to change its currency policies to provide for its currency to float

freely on international markets.

As a result, Congress is considering the

enacting legislation which could result in the imposition of quotas and tariffs.

If the PRC changes its existing currency policies or if the United States or

other countries enact laws to penalize the PRC for its existing currency

policies, our business may be adversely affected, even though we do not sell

outside of the PRC.

Further, we cannot predict what action the PRC may take in

the event that the United States imposes tariffs, quotas or other sanctions on

Chinese products.

Even though we do not sell products into the United States

market, it is possible that such action by the PRC may nonetheless affect our

business since we are a United States company, although we cannot predict the

nature or extent thereof.

Any government action which has the effect of

inhibiting foreign investment could hurt our ability to raise funds that we need

for our operations.

The devaluation of the currency of the PRC against the

United States dollar would have adverse effects on our financial performance and

asset values when measured in terms of the United States dollar.

Exchange controls that exist in the PRC may limit our

ability to utilize our cash flow effectively.

We are subject to the PRCs rules and regulations affecting

currency conversion.

Any restrictions on currency exchanges may limit our

ability to use our cash flow for the distribution of dividends to our

shareholders or to fund operations we may have outside of the PRC.

Conversion of

RMB, the currency of the PRC, for capital account items, including direct

investment and loans, is subject to governmental approval in the PRC, and

companies are required to open and maintain separate foreign exchange accounts

for capital account items.

We cannot be certain that the regulatory authorities

of the PRC will not impose more stringent restrictions on the convertibility of

the RMB, especially with respect to foreign exchange transactions.

Fluctuations in the exchange rate could have a material

adverse effect upon our business.

We conduct our business in RMB.

To the extent our future

revenue are denominated in currencies other the United States dollars, we would

be subject to increased risks relating to foreign currency exchange rate

fluctuations which could have a material adverse affect on our financial

condition and operating results since our operating results are reported in

United States dollars and significant changes in the exchange rate could

materially impact our reported earnings.

A downturn in the economy of the PRC may slow our growth and

profitability.

The growth of the Chinese economy has been uneven across

geographic regions and economic sectors.

There can be no assurance that growth

of the Chinese economy will be steady or that any downturn will not have a

negative effect on our business especially if it results in either a decreased

demand of products such as ours or in pressure on us to lower our prices.

If certain tax exemptions within the PRC regarding

withholding taxes are removed, we may be required to deduct corporate

withholding taxes from any dividends we may pay in the future.

Under the PRCs current tax laws, regulations and rulings,

companies are exempt from paying withholding taxes with respect dividends paid

to shareholders outside of the PRC.

However, if the foregoing exemption is

removed, we may be required to deduct certain amounts from any dividends we pay

to our shareholders.

If the PRC tax authorities dispute our method of paying

value added taxes, we may be subject to penalties under the tax laws of the PRC.

Under the commercial practice of the PRC, we paid value added

taxes (VAT) and business tax based on tax invoices issued.

We generally issue

our tax invoice subsequent to the date on which revenue is recognized, and there

may be a considerable delay between the date on which the revenue is recognized

and the date on which the tax invoice is issued.

In the event that the PRC tax

authorities dispute the date of which revenue is recognized for tax purposes,

the PRC tax office has the right to assess a penalty which can range from zero

to five times of tax which is determined to have been improperly deferred.

believe that we are paying VAT and business taxes in accordance with the common

practice in PRC, we cannot assure you that the PRC tax authorities would not

reach a different conclusion and determine that common practice is not in

accordance with the tax laws of the PRC.

If a penalty is ultimately assessed

against us, the penalty could represent a material amount.

Because the government has the power to withdraw our

licenses, we cannot guarantee that we will continue to hold the necessary

In order for a company to engage in a business in the PRC, it

must have a business license, which is issued by the government.

subsidiaries possess business licenses which permit them to engage in their

respective businesses.

These licenses are subject to inspection by the government

agencies of our facilities.

The government has the power to withdraw a license

from those companies which may be disqualified as a result of these inspections

by the central government.

We cannot provide any assurance that we may be able

to maintain our present licenses or that we will be able to obtain any

additional licenses that may be required if we seek to expand the scope of our

Any adjustment in the conversion rate or exercise price of

the preferred stock and warrants sold in our August 2009 financing could have a

depressive effect on our stock price and the market for our stock.

If we are required to adjust the conversion price or warrant

exercise price relating to the Series A Preferred Stock or warrants pursuant to

any of the adjustment provisions of the agreements relating to our $1,000,000

August 2009 financing, the adjustment, or the perception that an adjustment may

be required, may have a depressive effect on both our stock price and the market

for our stock.

Trade groups in the United States have blamed the cheap value of the Chinese currency for causing job losses in American factories, giving Chinese exporters an unfair advantage and making its imports expensive.

There is increasing pressure for the PRC to change its currency policies to provide for its currency to float freely on international markets.

As a result, Congress is considering the enacting legislation which could result in the imposition of quotas and tariffs.

If the PRC changes its existing currency policies or if the United States or other countries enact laws to penalize the PRC for its existing currency policies, our business may be adversely affected, even though we do not sell outside of the PRC.

The implementation of policies sought by the United States could make our products most costly in the international market.

We cannot predict what action the PRC may take in the event that the United States imposes tariffs, quotas or other sanctions on Chinese products.

Even though we do not sell products into the United States market, it is possible that such action by the PRC may nonetheless affect our business since we are a United States company, although we cannot predict the nature or extent thereof.

Any government action which has the effect of inhibiting foreign investment could hurt our ability to raise funds that we need for our operations.

The devaluation of the currency of the PRC against the United States dollar would have adverse effects on our financial performance and asset values when measured in terms of the United States dollar.

PRC exchange controls may limit our ability to utilize our cash flow effectively.

We are subject to the PRC’s rules and regulations affecting currency conversion.

The RMB is not freely convertible into foreign currency nor can it be freely remitted abroad.

Any restrictions on currency exchanges may limit our ability to use our cash flow for the distribution of dividends to our shareholders or to fund operations we may have outside of the PRC.

Conversion of RMB, the currency of the PRC, for capital account items, including direct investment and loans, is subject to governmental approval in the PRC, and companies are required to open and maintain separate foreign exchange accounts for capital account items.

We cannot be certain that the regulatory authorities of the PRC will not impose more stringent restrictions on the convertibility of the RMB, especially with respect to foreign exchange transactions.

To the extent that we develop an export business, we could be affected by the PRC’s exchange controls.

Our operating assets are located inside the PRC.

Under the laws governing foreign invested entities, such as us, in the PRC, dividend distribution and liquidation are allowed but subject to special procedures under the relevant laws and rules.

Any dividend payment will be subject to the decision of the board of directors and subject to foreign exchange rules governing such repatriation.

Any liquidation is subject to the relevant government agency’s approval and supervision as well as the foreign exchange control.

This may generate additional risks for you in case of dividend payment and liquidation.

A downturn in the economy of the PRC may slow our growth and profitability.

The growth of the Chinese economy has been uneven across geographic regions and economic sectors.

There can be no assurance that growth of the Chinese economy will be steady or that any downturn will not have a negative effect on our business especially if it results in either a decreased use of products such as ours or in pressure on us to lower our prices.

If certain tax exemptions within the PRC regarding withholding taxes are removed, we may be required to deduct corporate withholding taxes from any dividends we may pay in the future.

Under the PRC’s current tax laws, regulations and rulings, companies are exempt from paying withholding taxes with respect dividends paid to shareholders outside of the PRC.

However, if the foregoing exemption is removed, we may be required to deduct certain amounts from any dividends we pay to our shareholders.

If our favorable tax treatment is overturned, we may be subject to significant penalties .

On March 16, 2007, the PRC’s National People’s Congress passed a new corporate income tax law, which became effective on January 1, 2008.

This new income tax unifies the corporate income tax rate of domestic enterprise and foreign investment enterprises to 25%.

Preferential tax treatments will continue to be granted to entities that are classified as “high and new technology enterprises strongly supported by the State” or conduct business in sectors that are encouraged by the PRC’s National People’s Congress.

This new tax law, however, does not clearly define the requirements or criteria for receiving these preferential tax treatments.

As agriculture companies, some of our subsidiaries presently benefit from full or 50% exemptions from enterprise income tax.

Because clear implementation and requirement rules or guidelines for the new tax law have not yet been promulgated, we cannot assure you that our subsidiaries will maintain their preferential tax status or that we will not be assessed significant penalties.

If the PRC tax authorities dispute our method of paying value added taxes, we may be subject to penalties under the tax laws of the PRC.

Under the commercial practice of the PRC, we paid value added taxes (“VAT”) and business tax based on tax invoices issued.

We generally issue our tax invoice subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued.

In the event that the PRC tax authorities dispute the date of which revenue is recognized for tax purposes, the PRC tax office has the right to assess a penalty which can range from zero to five times of tax which is determined to have been improperly deferred.

Although we believe that we are paying VAT and business taxes in accordance with the common practice in PRC, we cannot assure you that the PRC tax authorities would not reach a different conclusion and determine that common practice is not in accordance with the tax laws of the PRC.

If a penalty is ultimately assessed against us, the penalty could represent a material amount.

Because the government has the power to withdraw our licenses, we cannot guarantee that we will continue to hold the necessary licenses.

In order for a company to engage in a business in the PRC, it must have a business license, which is issued by the government.

Our subsidiaries possess business licenses which permit them to engage in their respective businesses.

These licenses are subject to inspection by the government agencies of our facilities.

The government has the power to withdraw a license from those companies which may be disqualified as a result of these inspections by the central government.

We cannot provide any assurance that we may be able to maintain our present licenses or that we will be able to obtain any additional licenses that may be required if we seek to expand the scope of our business.

RISKS ASSOCIATED WITH INVESTING IN OUR COMMON STOCK

There is a limited market for our common stock, which may

make it difficult for you to sell your stock.

Our common stock trades on the OTC Bulletin Board under the

symbol SGLA.OB.

There is a limited trading market for our common stock and there

is frequently no trading in our common stock.

Accordingly, there can be no

assurance as to the liquidity of any markets that may develop for our common

stock, the ability of holders of our common stock to sell our common stock, or

the prices at which holders may be able to sell our common stock.

Further, many

brokerage firms will not process transactions involving low price stocks,

regardless of whether they come within the definition of a penny stock. If we

cease to be quoted, holders would find it more difficult to dispose of, or to

obtain accurate quotations as to the market value of our common stock, and the

market value of our common stock would likely decline.

If a more active trading market for our common stock

develops, the market price of our common stock is likely to be highly volatile

and subject to wide fluctuations, and you may be unable to resell your shares at

or above the price at which you acquired them.

The market price of our common stock is likely to be highly

volatile and could be subject to wide fluctuations in response to a number of

factors that are beyond our control, including:

quarterly variations in our revenues and operating expenses;

developments in the financial markets and worldwide economies;

announcements of innovations or new products or services by us or our

announcements by the PRC government relating to regulations that govern

our industry;

significant sales of our common stock or other securities in the open

variations in interest rates;

changes in the market valuations of other comparable companies;

changes in accounting principles.

If a stockholder were to file any such class action suit

against us following a period of volatility in the price of our securities, we

would incur substantial legal fees and our managements attention and resources

would be diverted from operating our business to respond to such litigation,

which could harm our business and reputation.

We have not paid dividends in the past and do not expect to

pay dividends for the foreseeable future, and any return on investment may be

limited to potential future appreciation on the value of our common stock.

We currently intend to retain any future earnings to support

the development and expansion of our business and do not anticipate paying cash

dividends in the foreseeable future.

To the extent that we do not pay dividends,

our stock may be less valuable because a return on investment will only occur if

and to the extent our stock price appreciates, which may never occur.

addition, investors must rely on sales of their common stock after price

appreciation as the only way to realize their investment, and if the price of

our stock does not appreciate, then there will be no return on investment.

Investors seeking cash dividends should not purchase our common stock.

Our ability to issue preferred stock may make it more

difficult for a third party to effect a change-of-control.

Our articles of incorporation authorize our board of directors

to issue up to 20,000,000 shares of preferred stock.

The preferred stock may be

issued in one or more series, the terms of which may be determined at the time

of issuance by the board of directors without further action by the

shareholders.

These terms may include preferences as to dividends and

liquidation, conversion rights, redemption rights and sinking fund provisions.

The issuance of any preferred stock could diminish the rights of holders of our

common stock, and therefore could reduce the value of such common stock.

addition, specific rights granted to future holders of preferred stock could be

used to restrict our ability to merge with, or sell assets to, a third party.

The ability of the board of directors to issue preferred stock could make it

more difficult, delay, discourage, prevent or make it more costly to acquire or

effect a change-incontrol, which in turn could prevent our shareholders from

recognizing a gain in the event that a favorable offer is extended and could

materially and negatively affect the market price of our common stock.

The market for our common stock may be affected by the reset and liquidated damage provisions which we granted in connection with a private placement of common stock.

In May 2010, we sold 17,000,000 shares of common stock at $0.20 per share pursuant to two agreements, one covering 3,375,000 shares and the other 13,625,000 shares.

In October 2010, we sold 5,000,000 shares of common stock at $0.20 to two investors.

The agreement with the purchasers of 3,375,000 shares in the May 2010 financing and the agreement for the October 2010 financing provide that if, at any time as long as any of the investors holds any of the shares of common stock purchased in the financing, we sell shares of common stock or issue convertible notes or preferred stock with a conversion price which is less than the $0.20 price paid in the financing, we are to issue additional shares to the investors so that the effective price per share is equal to such lower price.

The agreements with each of the groups of investors provide for liquidated damages of 1% per month, payable in cash or stock (based on the closing price of the transaction) if we fail to comply with certain covenants, including effecting a reverse split and filing for the listing of our common stock on the American Stock Exchange, within certain timetables.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” for more information relating to these provisions.

The potential issuance of additional shares resulting from a downward adjustment in the purchase price of the shares, which would result in increased dilution to the stockholders, together with the potential for liquidated damages, could have an adverse effect upon the market for and the market price of our common stock.

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.

Our stock is quoted on the OTCQB.

It has previously been quoted on the OTC Bulletin Board;

however, it ceased trading on the OTC Bulletin Board in February 2011 because of the failure of a market maker to place a bid for our common stock for a period of five consecutive trading days.

There is not an active market for our common stock.

There are many days in which there is no or insignificant trading volume in our common stock.

The absence of any significant activity can result in a very volatile stock.

When there is little trading activity, the purchase or sale of a relatively small number of shares could result in a disproportionate change in the stock price.

In addition, numerous other factors, many of which are beyond our control, may cause the market price of our common stock to fluctuate significantly.

In addition to market and industry factors, the price and trading volume for our common stock may be highly volatile for specific business reasons.

Factors such as variations in our revenues, earnings and cash flow, announcements of new investments, cooperation arrangements or acquisitions, and fluctuations in market prices for our products could cause the market price for our shares to change substantially.

Securities class action litigation is often instituted against companies following periods of volatility in their stock price.

This type of litigation could result in substantial costs to us and divert our management’s attention and resources.

Because of our low stock price, you may have difficulty selling shares of our common stock.

The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions.

The definition of a penny stock does not treat issuers that meet certain financial requirements, including average revenue of at least $6,000,000 for the last three years, as a penny stock the stock.

Although we do not believe that our stock meets the definition of a penny stock because our revenue for each of the past three years exceeded $6 million, many brokerage firms will not process stock purchases or sales of low-priced stocks, regardless of whether the stock meets the definition of a penny stock.

As a result, you may have difficulty in selling your stock.

Our common stock is quoted on the OTCQB which may have an unfavorable impact on our stock price and liquidity.

Our common stock is quoted on the OTCQB, which is not a stock exchange.

The OTCQB is a significantly more limited market than the New York Stock Exchange or NASDAQ Stock Market.

The quotation of our shares on the OTCQB may result in a less liquid market available for existing and potential shareholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.

Our ability to issue preferred stock may make it more difficult for a third party to effect a change-of-control.

Our articles of incorporation authorize our board of directors to issue up to 20,000,000 shares of preferred stock.

The preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the board of directors without further action by the shareholders.

These terms may include preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions.

The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of such common stock.

In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party.

The ability of the board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent our shareholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

The potential sale of 20,000,000 shares pursuant to a registration statement, as well as the existence of other outstanding warrants, may have a depressive effect on the price and market for our common stock.

As of December 31, 2010, we had outstanding warrants to purchase 25,569,635 shares of common stock, including warrants to purchase 20,000,000 shares of common stock which we registered pursuant to a registration statement.

As of the date of this annual report, no warrants had been exercised and, because of the market price for our stock, the market in which our stock is quoted and the absence of any significant trading volume, it is possible that we may never receive the proceeds from the warrants.

In addition, the presence of the warrants and the potential sale of 20,000,000 shares of common stock upon exercise of the warrants with the other outstanding warrants may have a depressive effect on our stock price and make it more difficult for us to raise any significant funds in the equity market if our business requires additional funding.

ITEM 1B UNRESOLVED STAFF COMMENTS

Not required for smaller reporting companies.

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 1A. Risk Factors