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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WASHINGTON, D.C. 20549</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FORM 8-K<BR>
CURRENT REPORT</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report (date of earliest event reported):
July 11, 2012</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Geltology Inc.</U></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
charter)</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Delaware</U>&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State or other jurisdiction of incorporation)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-size: 10pt"><B>333-174874<BR>
</B>(Commission File Number)</TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-size: 10pt"><B>35-2379917<BR>
</B>(IRS Employer Identification No.)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Room 2903, Unit B<BR>
Jianwai SOHO East District<BR> 39 East Third Ring Road Central<BR>
Chaoyang District, Beijing City, China</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address of principal executive offices
and zip code)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>86-10-5869-4611</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">(Registrant&rsquo;s
telephone number including area code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Wingdings">&#168;</FONT>&#9;Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Wingdings">&#168;</FONT>&#9;Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Wingdings">&#168;</FONT>&#9;Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Wingdings">&#168;</FONT>&#9;Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The statements contained in this Form 8-K that are not historical
are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These include statements about the Registrant&rsquo;s expectations, beliefs, intentions
or strategies for the future, which are indicated by words or phrases such as &ldquo;anticipate,&rdquo; &ldquo;expect,&rdquo; &ldquo;intend,&rdquo;
&ldquo;plan,&rdquo; &ldquo;will,&rdquo; &ldquo;we believe,&rdquo; &ldquo;management believes&rdquo; and similar words or phrases.
The forward-looking statements are based on management&rsquo;s current expectations and are subject to certain risks, uncertainties
and assumptions. Our actual results could differ materially from results anticipated in these forward-looking statements. All forward-looking
statements included in this document are based on information available to us on the date hereof, and we assume no obligation to
update any such forward-looking statements.</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -1in">Item 1.01&#9;Entry
into a Material Definitive Agreement.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Share Exchange Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On July 11, 2012 (the &ldquo;Closing Date&rdquo;), Geltology
Inc., a Delaware corporation (&ldquo;GELT&rdquo;, references to &ldquo;GELT&rdquo; shall refer to GELT prior to the consummation
of the Share Exchange and references to the &ldquo;Company,&rdquo; &ldquo;we,&rdquo; &ldquo;our&rdquo; or &ldquo;us&rdquo; shall
refer to GELT, and its wholly-owned subsidiaries, after the consummation of the Share Exchange Agreement), entered into a Share
Exchange Agreement (the &ldquo;Exchange Agreement&rdquo;), with General Red Holding, Inc. (&ldquo;GRH&rdquo;), a Delaware corporation,
and the shareholders of GRH (&ldquo;GRH Shareholders&rdquo;). Pursuant to the terms of the Exchange Agreement, GRH agreed to pay
the two principal shareholders of GELT $455,000, and the GRH Shareholders transferred to GELT all of the outstanding shares of
common stock of GRH. In return, GELT issued, in the aggregate, 125,112,803 shares of GELT common stock, par value $0.0001 per share
(&ldquo;Common Stock&rdquo;) (such transaction is hereinafter referred to as the &ldquo;Share Exchange&rdquo;) to the GRH Shareholders.
In connection with the transaction, the two principal shareholders of GELT also surrendered for cancellation an aggregate of 4,513,252
shares of Common Stock beneficially owned by them. As a result of the Share Exchange, we are now a holding company, through which
our operating companies in the People&rsquo;s Republic of China (&ldquo;China&rdquo; or the &ldquo;PRC&rdquo;), are primarily engaged
in planting, preserving, packaging and marketing premium navel oranges for distribution and sale throughout the PRC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -1in">Item 2.01&#9;Completion
of Acquisition or Disposition of Assets</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On the Closing Date, we consummated the transactions contemplated
by the Exchange Agreement as described in Item 1.01 above.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-weight: normal; text-underline-style: none">As
a result of the Share Exchange, our current corporate structure is as follows:</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Business</U>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Company Background<BR STYLE="mso-special-character: line-break">
<BR STYLE="mso-special-character: line-break">
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">GELT was incorporated under the laws of the State of Delaware
on March 24, 2010. GELT&rsquo;s primary business involved the sourcing of production and other services in the Far East, and specifically
China. In particular, GELT matched factories in China with western companies that were looking to manufacture goods in China. This
line of business included sourcing for existing and new products and supplies, sourcing for high or low volume production, product
development to assist with local design companies, process and manufacturing development in China, quality control, facilitating
and coordinating visits by buyers&rsquo; representatives to China, negotiating the best prices from reputed suppliers, providing
production updates to buyers and arranging shipments and timely deliveries. GELT also planned to develop a second business line
that would focus on promoting yoga accessories by selling its products via the &ldquo;e-promotional&rdquo; gift industry market
in the United States, initially by the sale of yoga mats to corporations as part of their gift promotions to their employees, customers,
and clients. GELT never generated any revenues from this second business line.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>References to &ldquo;we,&rdquo; &ldquo;our,&rdquo; &ldquo;ours&rdquo;
and &ldquo;us,&rdquo; include our operating subsidiaries in the PRC, Xingguo General Fruit Industry Development Co., Ltd. (&ldquo;General
Fruit&rdquo;) and its wholly owned subsidiary Xingguo General Red Navel Orange Preservation Company Ltd. (&ldquo;General Preservation&rdquo;).</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Current Business and Products </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a result of the Share Exchange, we
operate our business through our wholly-owned subsidiary, General Fruit, located in the Jiangxi Province of the PRC. We are one
of the leading companies engaged in the planting, post-harvest processing and temperature controlled preservation and storage
of organic navel oranges. We contract with approximately 30 farmers to plant and harvest oranges in our orchards and provide them
with not only the raw materials necessary to plant, but also technical guidance and services to monitor quality of the crops.
When navel oranges are harvested, we preserve, store and subsequently sell them throughout many regions in the PRC. Although our
business operations primarily consist of the above described partnerships with local farmers, we also purchase oranges from farmers
and cooperatives who do not use our land. The oranges purchased from other farmers and cooperatives are not planted and harvested
as organic navel oranges. However, once purchased we commercially process and preserve them according to the standards of organic
navel oranges. All of the navel oranges we sell use the &ldquo;General Red&rdquo; brand name. We have received numerous honors
and certifications because of the high quality of our branded navel oranges.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our goal is to become the largest integrated grower, packager
and distributor of organic navel oranges in China. We have invested in our business by devoting resources to the establishment
of significant orange groves, by building a state of the art storage and preservation facility and by marketing and advertising
our products. Currently, we have planted 515,843 orange trees in two orchards totaling 16,927 mu of land (approximately 2,788.5
acres). We lease 10,000 mu of the land (approximately 1,647.5 acres) from the local government, and developed our own orange groves
on that land. In addition, we lease from individual farmers 7,326.5 mu of orange groves (approximately 1,206.9 acres).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We utilize a &quot;company + farmers&quot; model for our production
of organic navel oranges. We allow the farmers to use our orchards, and provide them with raw materials, such as seedlings and
fertilizer, as well as production tools, electricity and irrigation facilities necessary for planting and harvesting the oranges.
Our in-house fruit forest management and protection team provide technical support and guidance to the farmers to optimize cultivation,
irrigation, fertilization, water and soil conservation, administration of pesticides for weed and pest control, and protection
against frost and rain. We instruct farmers on how to implement these quality control measures, so that the oranges are of the
highest quality. Prior to the growing season, the farmers enter into short-term sales contracts with us, which provide that we
will purchase a specified quantity of oranges from the farmers, based on weight, at a specified purchase price. We divide the
production yield with farmers, so that 60% of all product is for us, and 40% is for the farmers. These contracts further provide
that we are only obligated to purchase those oranges that meet our quality specifications. We believe that this is an attractive
model for farmers, as it allows them to bypass the logistics and added costs of going through wholesale or retail markets to sell
their oranges. This model is also beneficial to us because we have an ongoing supply of oranges, which we know are grown according
to our specifications enabling us to consistently maintain our high level of quality.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In Ganzhou, Jiangxi, we constructed one of the largest navel
orange temperature-controlled preservation facilities in the Southern Jiangxi region of China on 39,171 square meters of land
(approximately 9.68 acres), of which 11,131 square meters (approximately 2.75 acres) is the construction area of the main structure
for the preservation facility. We have approximately 4,346 square meters of administrative offices, dormitories and power supply
rooms next to the facility. The maximum storage capacity is 7,000 tons and maximum capacity is 10,000 tons. Currently, most of
the navel orange storage facilities in the Southern Jiangxi region are cold storage, with few that are temperature controlled
facilities. The temperature-controlled storage and preservation technology used in our facility comes from Beijing Furui Ventilation
Protection Company (&ldquo;Beijing Furui&rdquo;), which was previously a subsidiary of China Agricultural University and Chinese
Academy of Agricultural Sciences. Beijing Furui was the construction contractor in the design and build of our temperature-controlled
preservation facility, and provided the main equipment used in the facility. We purchased our post-harvest processing equipment,
which includes our selection and packaging lines, from MAF RODA Group of Spain (&ldquo;MAF RODA&rdquo;). As part of the purchasing
contract MAF RODA provides us with technical training on how to operate the equipment, which includes educating our employees
about the automatic control technology used in the equipment. We have two modern sorting lines at our Ganzhou facility. The sorting
line has a sorting capacity of 40 tons/hour. These sorting lines clean, disinfect and apply wax coating to the oranges, and then
select, classify, and send the naval oranges to pre-storage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Industry and Market Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There are three primary areas of business operations in the
navel orange industry: production, post-harvest processing and preservation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Navel Orange Production</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The navel orange industry has been growing rapidly in
China due to governmental support and an increase in demand for navel oranges. Planting areas and the production of navel
oranges in China have steadily increased since the 1980&rsquo;s. Navel orange production requires stringent climate
conditions, therefore, there are limited areas in the world where navel oranges can be produced and, as a result, production
is primarily concentrated in warmer climates, such as California, Spain, South Africa, Australia, and &ldquo;Gannan &ndash;
Southern Hunan &ndash; Northern Guangxi&rdquo; in China. The Chinese government has identified the Gannan area as &quot;the
hometown of the navel orange in China&quot;, and has been willing to provide intensive support to local producers. The
Ministry of Agriculture named Gannan navel oranges as one of the nine competitive agricultural products in the country, and
listed Gannan as one of the key developing areas. The Ministry planned to reach 5 million mu (1 mu = 1/15 hectare) of
planting area and yield 5.5 million tons of navel oranges in Gannan &ndash; Southern Hunan &ndash; Northern Guangxi by 2012.
Gannan planted 1.76 million mu and produced 1.22 million tons of navel oranges in 2010. It has been estimated that the
planting area in 2011 was 1.81 million mu, with a production yield of 1.4 million tons. Gannan has ranked first worldwide by
navel orange planting and ranked third worldwide by annual output, according to China Industrial Economy News.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">General Fruit is one of six leading enterprises
in Gannan and plays a decisive role in Gannan&rsquo;s navel orange industry. &ldquo;Ganan Navel Orange&rdquo; is the common brand
shared by all producers in Gannan area. Thanks to its superior quality and effective brand strategy, &ldquo;General Red&rdquo;
stands out among all of the Gannan brands and has become one of the most influential brands in China. General Fruit has become a leader in producing organic navel oranges, with a planting area in Gannan
of 38.5% of all such organic navel orange planting areas in Southern Jiangxi.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We anticipate that the demand for navel oranges will
continue to increase. In 2008 per capita fruit consumption was 61.4 kg worldwide, 83.3 kg in developed countries, 55.4 kg
in developing countries, and 45.6 kg in China. Compared with 63% in other countries and over 80% in Brazil and the US,
orange production accounts for only about 17% of citrus production in China, among which navel orange production accounts for
less than 10%. Approximately 98% of navel oranges produced in China are sold in the domestic market, with only 2% exported to
other countries. More than 95% of citrus fresh fruit is sold domestically in China, with less than 5% of such fruit exported.
A large portion of raw materials for orange juice is imported from Brazil and the US. We believe that such data indicates
there is a significant room for growth in this industry in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Post-harvest</I> <I>processing</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The post-harvest  processing of harvested
fruits also has broad prospects in China. Post-harvest processing includes selecting, grading, cleaning, pre-cooling, waxing and
packaging. Proper processing can minimize post-harvest loss, maintain the high nutritional content and freshness, slow down the
metabolic process of fruit in its natural state, enhance the appearance of the fruit and extend the life of the fruit. Currently,
the rate of post-picking commercially treated citrus fresh fruit is only 5% in China, compared to more than 90% in other developed
major producing countries. The rate of citrus processing in China is much lower than the average level of 35% in the world, which
is much lower than that of Brazil and the US, which is 80% and 70%, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Preservation</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The storage and preserving technology in China lags behind that
of developed countries with citrus exports due to grossly inadequate storage and preservation facilities. The rate of cold chain
distribution of fruits and vegetables is only 5%, and the rate of refrigerated transportation hardly reaches 15%, which is much
lower than in developed countries. Cold chain distribution is a temperature controlled distribution supply chain, resulting in
an uninterrupted series of storage and distribution activities maintaining a given temperature. It is used to help extend and ensure
the shelf life of products, including agricultural products. The loss rate in distribution of oranges in China is 20-30%, compared
with less than 5% in developed countries. The National Development and Reform Commission of China developed a &quot;cold chain
logistics development plan&quot; in 2010, which plans to improve the cold chain distribution rate to 20% and refrigerated transportation
rate to 30%, and reduce loss rate in distribution to 15%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Most navel oranges mature in October and November, and are distributed
between the months of October through January. There is only a small amount of citrus fruit distributed between March and August.
No other citrus fruit is available in the summer months except a small amount of Valencia oranges from Spain. General Fruit can
extend its sales cycle by 2-3 times due to its strong preservation abilities, which enables us to sell navel oranges at a higher
price during the off-season when other distributors may not have sufficient supply.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Competitive Strengths </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our competitive strengths include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Quality of Orange</U></I><U>s <I>and Brand Name</I></U>.
We are committed to purchasing high quality oranges. Our agreements with the farmers provide that each orange must have a solid
shape, even stem and a smooth surface and be free of any black spots, fertilizer spots, cracks or worms. The agreements further
provide that oranges may not be picked when it is raining, or within three days of rain, when it is foggy or before the dew on
the orange tree has dried. The Company has received more than 20 honors related to navel oranges and the Company&rsquo;s preservation
facility. Among the honors the Company has received are the titles of &ldquo;Chinese Famous Brand&rdquo; by the Fruits Logistics
Association of China, &ldquo;Famous Agricultural Brand of Jiangxi&rdquo; by the Jiangxi provincial government, and &ldquo;Key
Leading Enterprise of Ganzhou in Agricultural Industrialization&rdquo; by the Ganzhou municipal government.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Geographical Advantage. </U></I>The location of our
planting area affords us numerous advantages, including proximity to China&rsquo;s transportation network of highways,
optimal climate conditions, and excellent soil for cultivating organic oranges. Our planting area is close to the
Beijing-Kowloon railroad, 105 state road, 323 national highway, 319 state road, Kunsha Highway, and Quannan Highway. Using
these roads, Jinggangshan airport is approximately one hour drive while the port cities of Shenzhen, Guangzhou and Xiamen are
all within five hours by car. Our planting area is located in a subtropical monsoon climate, with abundant
rainfall, sunshine and four distinct seasons. The average annual temperature is 18.9C with a low of -3C and relative
humidity of 70-80%. There is an average annual sunshine exposure of 1,992.3 hours and approximately 1,600 mm of annual
rainfall making it very suitable for growing oranges. The soil at our planting area is rich in organic matter with soil pH
levels of 6-6.3 (optimal for orange cultivation). Soil sample tests are conducted by experts to comply with the provisions of
the Chinese government&rsquo;s NY5016-2001 standard.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Top of the Line Sorting Machines</U></I>. Our processing
facilities utilize up-to-date and efficient sorting machines purchased from world class manufacturers in this industry, such as
MAF RODA Group and Yantai Sinclair Economic and Trade Co., Ltd. MAF Roda is the world's largest fresh produce procurement, processing,
and packaging equipment manufacturer, leading the world in the development of agricultural products packaging industry and its
products represent the top of the line in the field. Yantai Sinclair Economic and Trade Co., Ltd., is the world's leading provider
of fresh fruits and vegetables labeling systems. All of the world's major fruit producing areas are serviced by Sinclair's systems,
which meet European specifications and regulations regarding fruits and vegetables, the U.S. Food and Drug Administration (FDA),
and the world's leading supermarket chain requirements. Sinclair currently has tens of thousands of devices running worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Technology Advantage</U></I>. Our controlled
atmosphere storage and preservation technology allows us to maintain a storage period of up to 6-8 months, improve orange
appearance and color, and retain a fresh flavor. This is necessary for our oranges to achieve the status of &quot;Gannan
navel orange&quot; that meets the national standard (Standard No. GB/T200355-2006). Our controlled atmosphere storage
equipment is primarily provided by the China Agricultural University, Chinese Academy of Agricultural Sciences, and its
affiliated company, Beijing Furui. Beijing Furui specializes in the research and development of fruit and vegetable storage
and preservation technology, manufacturing of cold atmosphere equipment, and construction of controlled
atmosphere storage projects. Beijing Furui and domestic research institutes have co-developed vacuum decompression
preservation devices, air discharge devices, cold storage central control and measurement systems,
VSA oxygen systems, carbon dioxide removal systems, ethylene suspension systems, and transmission systems.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Highly Trained Management and Expert Team</U></I>.
We have established a specialized fruit forest management and expert team, who work with the contract farmers to optimize
cultivation, irrigation, fertilization, water and soil conservation, administration of pesticides for weed and pest control
and educate about protection against frost and rain. This team has learned through various lectures taught by a professor of
Huazhong Agricultural University, a member of the Chinese Academy of Engineering, and by other distinguished fruit experts in
China. These lectures were part of an agricultural technology promotional series, provided by the Chinese government for free
in support of the planting of navel oranges in the Southern Jiangxi region. In these seminars and lectures the team was
introduced to certain navel orange varieties in the Southern Jiangxi region of high-yield and high-quality and was taught
standardized production, pollution-free cultivation and other cultivation techniques.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Growth Strategy</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We intend to leverage our existing operations  to create a
fully integrated business that grows, preserves and distributes high-quality organic navel oranges and other fruits and vegetables.
Our approach includes:<BR STYLE="mso-special-character: line-break"> <BR STYLE="mso-special-character: line-break"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Developing Planting Areas in Key Sales Regions</I>. Our fully
integrated business model begins with the planting and growing of fruits and vegetables. To that end, we plan on establishing planting
areas in each of the major fruit producing areas in the PRC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Establishing Temperature Controlled Warehouses and Distribution
Centers in Key Sales Regions</I>. We plan to purchase or construct modern, temperature-controlled preservation warehouses
in major fruit and vegetable consumer markets, including the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin region,
and the provincial capital cities. We also plan to build fruit and vegetable distribution centers with cold-storage services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Establishing Retail Chain Stores</I>. We plan to build retail chain stores of fruits and vegetables in major cities, leveraging our existing
infrastructure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Promoting General Red Brand Name</I>. <FONT STYLE="font: 10pt Times New Roman, Times, Serif">We
plan to promote and enhance the &ldquo;General Red&rdquo; brand by placing General Red trademark signs and advertisements in member
stores and in the target markets, employing consistent product management system and high standards for product quality, conducting
customer feedback surveys, and bringing added convenience to end-customers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Competition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To our knowledge, we are the largest integrated navel orange
company with both growing areas and post-harvest processing and preservation facilities. Our competitors are pure navel orange
growers, pure post-harvest processors, or both. The largest competitor in navel orange growing is Jiangxi Wangpin Agricultural
Science and Technology Development Co. Ltd. with 6,880 mu of navel orange groves. The largest competitors in post-harvest processing
and preservation are Anyuan Shengda Fruit Industrial Co. Ltd with 20,000 metric ton of preservation capacity, and Xinfeng Yuhe
Agricultural Development Co. Ltd. with 10,000 metric ton of preservation capacity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table lists our competitors and their profiles, based upon information accessible to us:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD ROWSPAN="2" STYLE="border: windowtext 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">Company Name</TD>
    <TD COLSPAN="2" STYLE="border: windowtext 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">Planting Base (mu)</TD>
    <TD ROWSPAN="2" STYLE="border: windowtext 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">Sorting Line Capacity<BR>
(ton/hour)</TD>
    <TD ROWSPAN="2" STYLE="border: windowtext 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">Storage Facility
    Capacity<BR>
(tons)</TD>
    <TD ROWSPAN="2" STYLE="border: windowtext 1pt solid; font-size: 10pt; font-weight: bold; text-align: center"><B>Leading Enterprise Qualification</B></TD></TR>
<TR>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">Total Area<BR>
(mu)</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">Area of Organic Planting Base for Navel Orange</TD></TR>
<TR>
    <TD STYLE="width: 34%; border: windowtext 1pt solid; font-size: 10pt; text-align: justify">Anyuan County Anshengda Fruit Industry Co., Ltd.</TD>
    <TD STYLE="width: 11%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">5,000</TD>
    <TD STYLE="width: 19%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="width: 13%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">40</TD>
    <TD STYLE="width: 10%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">20000</TD>
    <TD STYLE="width: 13%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">Province Level</TD></TR>
<TR>
    <TD STYLE="border: windowtext 1pt solid; font-size: 10pt; text-align: justify">Jiangxi Gannan Fruit Industry Holdings Co., Ltd.</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">3,250</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">20</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD></TR>
<TR>
    <TD STYLE="border: windowtext 1pt solid; font-size: 10pt; text-align: justify">Guangdong Yangshi Nanbei Fresh Fruit Co., Ltd.)</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">60</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">City Level</TD></TR>
<TR>
    <TD STYLE="border: windowtext 1pt solid; font-size: 10pt; text-align: justify">Jiangxi Wangpin Agricultural Science and Technology Development Co., Ltd.</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">6,880</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">1,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">80</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">Province Level</TD></TR>
<TR>
    <TD STYLE="border: windowtext 1pt solid; font-size: 10pt; text-align: justify">Jiangxi Shengwei Fruit Industry Co., Ltd.</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">20</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">6000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD></TR>
<TR>
    <TD STYLE="border: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Jiangxi Shengdi Fruit Industry Development
        Co., Ltd.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">3,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD></TR>
<TR>
    <TD STYLE="border: windowtext 1pt solid; font-size: 10pt; text-align: justify">Xinfeng County Yuhe Agricultural Development Co., Ltd.</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">40</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">10000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">Province Level</TD></TR>
<TR>
    <TD STYLE="border: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Xunwu County Yuanxing Fruit Industry Co.,
        Ltd.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">3,000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">25</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">5000</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">Province Level</TD></TR>
<TR>
    <TD STYLE="border: windowtext 1pt solid; font-size: 10pt; text-align: justify">Huichang County Lvfeng Fruit Industry Co., Ltd.</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">15</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">3000<FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">Province Level</TD></TR>
<TR>
    <TD STYLE="border: windowtext 1pt solid; font-size: 10pt">Anyuan County Jinfeng Linong Products Co., Ltd.</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">15</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-size: 10pt; text-align: center">none</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our competitive advantages are that we are an integrated player
and the largest grower. We control the source of the navel oranges with high quality standards. In addition, our preservation
facility is an air-controlled facility in which we control not only the temperature but also the composition of the air. A nitrogen
rich air environment slows down the oxidation process and prolongs the preservation life of the fruits. Our competitors in orange
preservation space mostly use temperature controlled facility instead of the more advanced air controlled technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Suppliers</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Approximately 50 percent of our business is the sale and distribution
of oranges supplied by outside parties. We are supplied with what is referred to as &ldquo;raw navel oranges,&rdquo; which are
oranges prior to post-harvest processing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Set forth below is a list of our top five raw navel orange
suppliers in 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Supplier</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percentage&nbsp;of <BR>total&nbsp;supply</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 80%; text-align: left">Xingguo Mengshan Fruits Development Co., Ltd.</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 17%; text-align: right">13.95</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Ningdu County Runhua Navel Orange Professional Cooperative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.79</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Ningdu County Qingtang Township Xiangyun Fruits Professional Cooperative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.07</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Jianhua Wen</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.42</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Xingguo Changwang Gannan Navel Orange Professional Cooperative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.30</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">When we initially develop the orange groves, our fruit seedlings
are sourced from seedling cultivation centers. In China, the government places great emphasis on cultivating and managing the seedling
sources for high quality and/or high yield fruits or crops. The seedling cultivation centers are typically the result of the joint
efforts among the agriculture research institutes, and government agency in agriculture technology promotion. We have had continued
support and fruit seedlings from the seedling cultivation centers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We purchase the fertilizers, other production materials and
tools from the public market. We have not had any problems in sourcing the supplies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Significant Customers</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our products are currently sold through distributors in over
11 provinces of China including Jiangxi, Beijing, Shanghai, Zhejiang, Guangxi, Shandong, Guangdong, Anhui, Helongjiang, Inner Mongolia
and Jiangsu. We currently do not sell directly to consumers or retail markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Set forth below is a list of our top five customers for the
year 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Customer</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percentage&nbsp;of <BR>total&nbsp;sales</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 80%; text-align: left">Zhejiang Green Land Agriculture Development Co., Ltd.</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 17%; text-align: right">7.96</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Beijing Yuanheng Xingye Fruits Trading Co. Ltd.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.14</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Beijing Green Land Fruits Co. Ltd</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.08</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Guangfeng Tianyuan Agriculture Development Co. Ltd</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.83</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Feng Xin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.67</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">PRC Government Regulation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><I><U>Agriculture Laws</U><FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">On July&nbsp;2, 1993, the Standing
Committee of National People's Congress of the PRC promulgated the Agriculture Law, which sets forth certain principles and various
measures designed to ensure the steady development of the agricultural industry. For example, the production or operation of agricultural
products that affect the health of people or animals, such as seeds, must meet registration and approval requirements of the PRC
laws and regulations. The Agriculture Law regulates the planting, processing, selling, preservation and transportation of agricultural
products. Agricultural Law stipulates that farmers and organizations for production and operation of agriculture products shall
keep good maintenance of their lands, make a rational use of chemical fertilizers and pesticides, increase their application of
organic fertilizers so as to improve soil fertility and prevent the land from pollution, destruction and soil fertility declination.
The Company endeavors to plant orange trees by organic and environmental friendly approaches.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="color: black">According
to Law of the People's Republic of China on Quality and Safety of Agricultural Products</FONT> passed by <FONT STYLE="color: black">Standing
Committee of National People&rsquo;s Congress on April 29, 2006, effective on November 1, 2006, <FONT STYLE="font-size: 10pt">the
administrative departments for agriculture under the governments at or above the county level shall be responsible for supervision
and control of the quality and safety of agricultural products; and the relevant departments of the people's governments at or
above the county level shall, in compliance with the division of their duties, be responsible for the work related to the quality
and safety of agricultural products. Agricultural production enterprises and specialized cooperative economic organizations of
farmers shall test the quality and safety of their products themselves or entrust the testing to a testing agency. The Company
engaged testing agency to test soil, cultivating water and air for certain planting areas to ensure quality and safety of its products.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">According to Law of the People's Republic
of China on Quality and Safety of Agricultural Products, when agricultural products is marketed by agricultural production enterprises,
specialized cooperative economic organizations of farmers, and by units or individuals engaged in the purchase of agricultural
products, then such agriculture products will be required to be packed or labeled in case the packing and labeling is necessary
according to related regulations and shall be marketable only after they are packaged or labeled. The Company believes that it
has packed and labeled its orange products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>New Plant Varieties Regulation </U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Regulation for the Protection of New Plant Varieties
of was promulgated by the State Council on March&nbsp;20, 1997 and became effective on October 1, 1997. The
administrative departments of the State Council in charge of agriculture and forestry are, according to their respective
functions, jointly responsible for the acceptance and examination of applications for the rights to new varieties of plants
and the grant of such rights. A person that has completed the production, sale or dissemination of a new variety of plant
which has been granted a variety right will have an exclusive right in its protected variety. Unless otherwise provided in
the regulations, no other person may use such variety for commercial purposes without a license from the owner of the rights
to the variety. The Company does not currently have the exclusive rights of a protected variety to any brand of navel orange.
As its business develops, the Company may file for  protection  of its  own orange variety in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><I><U>Forest Laws</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">The PRC Forestry Law passed by the
Standing Committee of the National People&rsquo;s Congress on April 29, 1998 and effective as of July 1, 1998, as well as its implement
promulgated by State Council on January 29, 2000 (&ldquo;Forest Law&rdquo;), is enacted to protect, cultivate and reasonably use
of forest resources. It governs the afforestation, cultivation, felling, utilization, management and administration of forests
within the PRC territory. PRC Forestry Law divided the forests into the following five categories: (1) Protection forests: forests,
trees and bushes mainly aimed at protection, inclusive of water source storage forests, forests for water and soil conservation,
wind protection and sand bind forests, forests for farmland and grassland protection, river bank protective belts and road protection
belts; (2) Timber stands: forests and trees mainly at timber production, inclusive of bamboo groves mainly aimed at bamboo production;
(3) Economic forests: trees mainly aimed at the production of fruits; edible oils, soft drinks and ingredients; industrial raw
materials; and medicinal materials; 4) Firewood forests: trees mainly aimed at the production of fuels; 5) Forests for special
uses: forests and trees mainly aimed at national defense, environmental protection and scientific experiments, inclusive of national
defense forests, experimental forests, parent stands, environmental protection forests, scenic beauty forests, trees for sites
of historical interests and the forests of natural protection areas. Forest Law prohibits land reclamation at the expense of deforestation,
rock quarrying, sand quarrying, soil extracting and other activities at the expense of deforestation. The Company endeavors to
protect its orange trees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><I><U>PRC Quarantine Law on the Import
and Export of Plants and relevant rules and regulations </U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">The PRC Quarantine Inspection Law on
the Import and Export of Plants passed by the Standing Committee of the National People&rsquo;s Congress on October 30, 1991, and
effective as of April 1, 1992, is aimed at preventing diseases, insect pests and harmful organisms from spreading into or out of
the country, protecting the production of agriculture, forestry, animal husbandry and fishery as well as human health, and promoting
the development of foreign economic relations and trade. The implement rule of PRC Quarantine Inspection Law on the Import and
Export of Plants was promulgated by State Council on December 2, 1996 and effective as of January 1, 1997. Administration Rule of
Quarantine Inspection of Exporting Fruits was promulgated by General Administration of Quality Supervision, Inspection and Quarantine
of PRC (&ldquo;AQSIQ&rdquo;) on December 25, 2006 and effective on February 1, 2007.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Pursuant to PRC Quarantine
Inspection Law on the Import and Export of Plants and its implementing regulations, (i) the Ministry of Agriculture shall be responsible
for the import and export quarantine of animal and plant; and (ii) enterprises importing plant seeds, seedlings or other
propagating materials must submit an application in advance and go through the formalities of quarantine inspection. In
addition, according to Administration Rule of Quarantine Inspection of Exporting Fruits, the fruits may export after the pass
of quarantine inspection.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">We will organize a quarantine inspection
according to related laws for the oranges for exporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><I><U>Foreign Currency Exchange </U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Pursuant to the Foreign Currency Administration
Rules promulgated on January 29, 1996 and amended on August 1, 2008, as well as various regulations issued by State Administration
of Foreign Exchange (&ldquo;SAFE&rdquo;) and other relevant PRC government authorities, the RMB is freely convertible into a foreign
currency for current account items, including trade-related receipts and payments, interest and dividends, but not for capital
account items, such as direct equity investments, loans and repatriation of investment, unless prior approval from SAFE or a local
branch has been obtained. Transactions that occur within the PRC must be settled in RMB. Unless otherwise approved, PRC companies
must repatriate foreign currency payments received from abroad and domestic enterprises must convert all of their foreign currency
receipts into RMB. Foreign-invested enterprises may retain foreign exchange in accounts with designated foreign exchange banks
subject to a cap set by SAFE or its local branch.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Intellectual Property</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The PRC Trademark Law, adopted on August 23, 1982 and revised
on October 27, 2001, protects the proprietary rights of registered trademarks. The State Administration for Industry and Commerce&rsquo;s
Trademark Office handles trademark registrations and grants an initial term of rights of ten years to registered trademarks. Upon
the initial term&rsquo;s expiration, a second term of ten years may be granted under a renewal. Trademark license agreements must
be filed with the Trademark Office or a regional office. In addition, if a registered trademark is recognized as a well-known trademark
in a specific case, the proprietary right of the trademark holder may be extended beyond the registered sphere of products and
services to which the trademark relates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We own and utilize the trademarks and domain name listed below.
We continuously look to increase the number of our trademarks where necessary to protect valuable intellectual property. We regard
our trademarks and other intellectual property as valuable assets and believe that they have significant value in the marketing
of our products. We vigorously protect our trademarks against infringement, including through the use of cease and desist letters,
administrative proceedings and lawsuits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We rely on trademark, and trade secret protection, non-disclosure
agreements and licensing arrangements to establish, protect and enforce intellectual property rights in our logos, trade names
and in the marketing of our products. In particular, we believe that our future success will largely depend on our ability to maintain
and protect the &ldquo;General Red&rdquo; trademark. Despite our efforts to safeguard and maintain our intellectual property rights,
we cannot be certain that we will be successful in this regard. Furthermore, we cannot be certain that our trademarks, products
and promotional materials or other intellectual property rights do not or will not violate the intellectual property rights of
others, that our intellectual property would be upheld if challenged or that we would, in such an event, not be prevented from
using our trademarks or other intellectual property rights. Such claims, if proven, could materially and adversely affect our business,
financial condition and results of operations. In addition, although any such claims may ultimately prove to be without merit,
the necessary management attention to, and legal costs associated with, litigation or other resolution of future claims concerning
trademarks and other intellectual property rights could materially and adversely affect our business, financial condition and results
of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The laws of certain foreign countries do not protect intellectual
property rights to the same extent or in the same manner as do the laws of the PRC. Although we continue to implement protective
measures and intend to defend our intellectual property rights vigorously, these efforts may not be successful or the costs associated
with protecting our rights in certain jurisdictions may be prohibitive. From time to time we may discover products in the marketplace
that are counterfeit reproductions of our products or that otherwise infringe upon intellectual property rights held by us. Actions
taken by us to establish and protect our trademarks and other intellectual property rights may not be adequate to prevent imitation
of our products by others or to prevent others from seeking to block sales of our products as violating trademarks and intellectual
property rights. If we are unsuccessful in challenging a third party&rsquo;s products on the basis of infringement of our intellectual
property rights, continued sales of such products by that or any other third party could adversely impact the &ldquo;General Red&rdquo;
brand, result in the shift of consumer preferences away from our products and generally have a material adverse effect on our business,
financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Trademarks</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Through General Fruit and General Preservation, we are licensed
to use the following trademarks registered with the Trademark Office, State Administration for Industry and Commerce in the PRC:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red"><IMG SRC="image_001.jpg" ALT="">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We plan to file for an extension with the appropriate trademark
offices before expiration of the trademarks listed above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Legal Proceedings</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are not currently a party to any material legal or administrative
proceedings and are not aware of any pending legal or administrative proceedings against us. We may from time to time become a
party to various legal or administrative proceedings arising in the ordinary course of our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">There is no
private ownership of land in China. Land is usually owned by the state and the government grants land use rights for
specified terms. General Preservation has obtained the following Land Use Right Certificates and Property Right Certificates
which show our entitlement to the land and buildings used by the Company:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: #BFBFBF">
    <TD STYLE="width: 5%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">No.</TD>
    <TD STYLE="width: 28%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Certificate Number</TD>
    <TD STYLE="width: 10%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Area (sq m)</TD>
    <TD STYLE="width: 14%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Purpose</TD>
    <TD STYLE="width: 25%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Property Location</TD>
    <TD STYLE="width: 18%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Expiration Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">1</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Property Right Certificate
        </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">(Xingfangquanzheng Gaoxing
        Zi No. LJGF2049)</FONT></P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">1,688</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Dormitory</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Mengshan Village, Gaoxing Town, Xingguo County</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">November 1, 2055</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">2</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Property Right Certificate
        </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">(Xingfangquanzheng Gaoxing
        Zi No. LJGF2050)</FONT></P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">11,131</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Workshop</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Mengshan Village, Gaoxing Town, Xingguo County</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">November 1, 2055</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">3</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Property Right Certificate
        </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">(Xingfangquanzheng Gaoxing
        Zi No. LJGF2051)</FONT></P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">418</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Electricity Supply Room</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Mengshan Village, Gaoxing Town, Xingguo County</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">November 1, 2055</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">4</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Property Right Certificate
        </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">(Xingfangquanzheng Gaoxing
        Zi No. LJGF2052)</FONT></P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">2,241</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Office Building</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Mengshan Village, Gaoxing Town, Xingguo County</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">November 1, 2055</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">5</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">State-owned Land Use Right
        Certificate </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">(Xingguoyong 2005 No. 2B2905-051)</FONT></P></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">39,171</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Industry</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Mengshan Village, Gaoxing Town, Xingguo County</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">November 1, 2055</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">6.</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Lease from Xu, Shiyong</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">100</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Office Space</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">128 Pingchuan Blvd., Xingguo County</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">February 28, 2014</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">7</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Lease from Wang, Taixiang</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">300</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">Office Space</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">77 Pingchuan Blvd., Xingguo County</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: normal">January 31, 2017</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: red">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Employees</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Currently, we have 252 employees and temporary staff. Set forth
below is a breakdown of our employees by category:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: red">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 50%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 56%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Category</U></TD>
    <TD STYLE="width: 44%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><B><U>Number of employees</U></B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Administrative and finance</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">31</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Sales and marketing</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">10</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Technician</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">4</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Workers</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">207</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our PRC operating companies, General Fruit and
General Preservation, have labor contracts with 53 employees, some of whom are part-time employees. We also hire
approximately 199 temporary staff for seasonal work. We do not pay social insurance for part-time employees. We are
currently in the process of completing governmental procedures for payment of social insurance for approximately 26
employees. We paid pension or medical insurance of farmers for approximately 21 employees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Corporation Information</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our principal executive offices are located at Room 2903, Unit
B, Jianwai SOHO East District, 39 East Third Ring Road Central, Chaoyang District, Beijing City, China. Our telephone number
is +86-10-5869-4611.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Risk Factors</U></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Risks Related to Our Business</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>We have a relatively short operating history and are
subject to the risks of a new enterprise, any one of which could limit growth, or market development.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Our short operating history
makes it difficult to predict how our businesses will develop. Accordingly, we face all of the risks and uncertainties encountered
by early-stage companies, such as:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-weight: normal">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">uncertain growth
in the market for our products; and</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-weight: normal">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">competition or evolving
customer preferences that could harm sales of our products.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font-weight: normal">If we are not able to meet the challenge of
building our business, our growth may be slowed, which could result in lower margins, additional operational costs and lower income.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Because we face significant competition, we could lose
market share and may need to respond by lowering our prices, which could materially and adversely affect our results of operations.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">The agricultural citrus business
in China is highly fragmented and competitive, and we expect competition in this sector to persist and intensify. We face competition
in each geographic market in which we operate. While we are trying to enter into agreements with additional farmers, we face competition
from other producers and may not succeed in our efforts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>We have agreements with a limited number of farmers
to grow and supply us with oranges. Any disruption in supply, breach of our agreements, or failure to deliver products, could adversely
impact our distribution capabilities or increase our costs, which could harm our reputation or materially and adversely affect
our business, results of operations and financial condition.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">We purchase our products from
farmers with whom we enter into seasonal contracts. The failure of our farmers to supply oranges that satisfy our quality, quantity
and cost requirements, the decision by farmers not to re-enter into contracts with us, or a breach of the contracts, could have
an adverse effect on our ability to maintain our distribution network. If we fail to maintain our relationships with these farmers
or fail to develop new relationships with other farmers, our business, results of operations and financial condition would be materially
adversely impacted.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>We derive most of our sales from the PRC.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Most of our sales are generated from the PRC. Although we
have explored the exportation of oranges outside of the PRC, at this time we anticipate that sales of our oranges in the PRC
will continue to represent a substantial proportion of our total sales in the near future. Any significant decline in the
condition of the PRC economy could adversely affect consumer demand of our products, among other things, which in turn would
have a material adverse effect on our business and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>If our land use rights are revoked, we would have no
operational capabilities or ability to conduct our business.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I></I></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Under Chinese law, land
is owned by state or rural collective economic organizations. The state issues tenants the rights to use property. Rights to use
property can be revoked and tenants can be forced to vacate at any time when redevelopment of the land is in the public interest.
The public interest rationale is interpreted broadly and the process of land appropriation may be less than transparent. Since
production of oranges is dependent on having land to grow, we rely on these land use rights as the cornerstone of our operations,
and the loss of such rights would have a detrimental effect on our business.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Weather and other environmental factors may affect our
harvesting season, and a reduction in the quality or quantity of our orange supplies may have a detrimental effect on our revenues.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our business may be adversely affected by weather and environmental
factors beyond our control, such as adverse weather conditions during the growing season. We have no control over such forces of
nature. A significant reduction in the quantity or quality of oranges harvested resulting from adverse weather conditions, disease
to the crops or other factors could result in increased per unit processing costs and decreased production, with adverse financial
consequences to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Concerns over food safety and public health may affect
our operations by increasing our costs and negatively impacting demand for our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We could be adversely affected by diminishing confidence in
the safety and quality of certain food products or ingredients, even if our practices and procedures are not implicated. As a result,
we may also elect or be required to incur additional costs aimed at increasing consumer confidence in the safety of our products.
For example, a crisis in China over melamine-contaminated milk in 2008 adversely impacted overall Chinese food exports since October
2008, as reported by the Chinese General Administration of Customs, even though most foods exported from China were not implicated
by the melamine-contaminated milk. Our success depends on our ability to maintain the quality of our products. Product quality
issues, real or imagined, or allegations of product contamination, even if false or unfounded, could tarnish our image and may
cause consumers to choose other products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We have limited insurance coverage.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The insurance industry in China is still at an early stage of
development. Insurance companies in China offer limited insurance products and the cost of such insurance is high. We have determined
that the risks of disruption or liability from our business, the loss or damage to our property, including our facilities, equipment
and office furniture, the cost of insuring for these risks, and the difficulties associated with acquiring such insurance on commercially
reasonable terms make it impractical for us purchase. As a result, we only carry insurance on some company owned vehicles. Any
uninsured occurrence of loss or damage to property, or litigation or business disruption may result in the incurrence of substantial
costs and the diversion of resources, which could have an adverse effect on our operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may be subject to product quality or liability claims,
which may cause us to incur litigation expenses and to devote significant management time to defending such claims and, if determined
adversely to us, could require us to pay significant damage awards. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unlike the United States and many other countries, product liability
claims and lawsuits in the PRC are rare. Furthermore, we cannot guaranty that product liability exposures and litigation will not
become more commonplace in the PRC or that we will not face product liability exposure or actual liability as we expand our sales
into international markets, like the United States, where product liability claims are more prevalent. In addition to the genetic
traits and the quality of our products, the performance marketability of our fruits depends on climate, geographical areas, cultivation
method, farmers&rsquo; degree of knowledge and other factors. At the same time, the viability of some farmland in China has deteriorated
due to toxic and hazardous materials from farmers&rsquo; overuse of herbicides. These factors are beyond our control and can result
in sub-optimal production yields. However, farmers generally attribute sub-optimal production yields to poor seed quality. We may
be required from time to time to recall products. Product recalls could adversely affect our profitability and our brand image.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may be subject to legal proceedings and claims from time
to time relating to our seed quality. The defense of these proceedings and claims could be both costly and time-consuming and significantly
divert the efforts and resources of our management personnel. An adverse determination in any such proceedings could subject us
to significant liability. In addition, any such proceeding, even if ultimately determined in our favor, could damage our market
reputation and prevent us from maintaining or increasing sales and market share. Protracted litigation could also result in our
customers or potential customers deferring or limiting their purchase of our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">While we have not experienced any credible product liability
litigation to date, there is no guarantee that we will not experience such litigation in the future. In the event we do experience
product liability claims or a product recall, our financial condition and business operations could be materially adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may experience major accidents in the course of our
operations, which may cause significant property damage and personal injury.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may experience major accidents in the course of our operations,
which may cause significant property damage and personal injuries. Significant industry-related accidents and natural disasters
may cause interruptions to various parts of our operations, or could result in property or environmental damage, increase in operating
expenses or loss of revenue. The occurrence of such accidents and the resulting consequences may not be covered adequately, or
at all, by the insurance policies we carry. In accordance with customary practice in China, we do not carry any business interruption
insurance or third party liability insurance for personal injury or environmental damage arising from accidents on our property
or relating to our operations other than our automobiles. Losses or payments incurred may have a material adverse effect on our
operating performance if such losses or payments are not fully insured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Risks Related to Our Corporate Governance and Controls</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>We do not have a majority of independent directors serving
on our board of directors, which could present the potential for conflicts of interest.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">We do not have a majority
of independent directors serving on our board of directors. In the absence of a majority of independent directors, our executive
officers could establish policies and enter into transactions without independent review and approval. This could present the potential
for a conflict of interest between us and our stockholders, generally, and the directors, management and controlling shareholder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>If we are unable to establish appropriate internal financial
reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our
financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence
in our reported financial information and have a negative effect on the market price for shares of our Common Stock.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Effective internal controls
are necessary for us to provide reliable financial reports and effectively prevent fraud. As a public company, we have significant
additional requirements for enhanced financial reporting and internal controls. However, as a result of the Share Exchange, we
have a newly acquired business, which may not have been subject to the same control systems as public company must maintain. We
will be required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial
reporting and a report by our independent registered public accounting firm addressing these assessments. The process of designing
and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our
business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls
that is adequate to satisfy our reporting obligations as a public company. We expect that there will be a period of transition
as we begin to integrate our new business and implement internal controls over financial reporting and disclosure controls and
procedures necessary for a public company&rsquo;s business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">We cannot assure you that
we will not, in the future, identify areas requiring improvement in our internal control over financial reporting, and disclosure
controls and procedures. We cannot assure you that the measures we will take to remediate any areas in need of improvement will
be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future
as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could
cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results,
subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have
a negative effect on the market price for shares of our Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Lack of US GAAP experience by our finance and accounting
team could result in our financial statements not being prepared properly.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Currently, we do not
have anyone in our finance and accounting team with requisite U.S. GAAP experience or training, which could result in our financial
statements not being prepared properly. We may need to hire additional financial reporting, internal controls and other finance
staff or consultants in order to assist with our financial statement preparations and to develop and implement appropriate internal
controls and reporting procedures. If we are unable to comply with the Sarbanes-Oxley Act&rsquo;s internal controls requirements,
we may not be able to obtain the independent auditor certifications that Sarbanes-Oxley Act requires publicly-traded companies
to obtain, further the failure to have such qualified employees may be a material weakness in our internal controls over financial
reporting. </FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>We will incur increased costs as a result of acquiring
a new operating business in the Share Exchange.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">As a result of the Share Exchange,
we now have an active operating business. We anticipate that we will incur significant legal, accounting and other expenses that
we did not incur as a prior shell company. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the
SEC, has required changes in corporate governance practices of public companies. We expect these rules and regulations to increase
our legal, accounting and financial compliance costs and to make certain corporate activities more time-consuming and costly. In
addition, we will incur additional costs associated with our public company reporting requirements. We are currently evaluating
and monitoring developments with respect to these new rules, and we cannot predict or estimate the amount of additional costs we
may incur or the timing of such costs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Risks Relating to Regulation of our Business</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>Restrictions on currency exchange
may limit our ability to utilize our revenues effectively.</I></B><FONT STYLE="font-family: Times New Roman, Times, Serif"> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">The PRC government imposes controls
on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive
all of our revenues in RMB. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries
to remit sufficient foreign currency to pay dividends or other payments to the US parent company, or other subsidiaries outside
of the PRC, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations,
payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions,
can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However,
approval from appropriate government authorities is required where RMB is converted into foreign currency and remitted out of China
to pay capital expenses such as the repayment of bank loans denominated in foreign currencies. If the foreign exchange control
system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends
in foreign currencies to our shareholders</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Under the PRC Enterprise Income Tax Law, we may be classified
as a &ldquo;resident enterprise&rdquo; of China, and such classification would likely result in unfavorable tax consequences to
us and our non-PRC stockholders.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">On March 16, 2007, the National
People&rsquo;s Congress or the NPC, approved and promulgated the PRC Enterprise Income Tax Law, which we refer to as the New EIT
Law. The New EIT Law took effect on January 1, 2008. Under the New EIT Law, Foreign Investment Enterprises (FIEs) and domestic
companies are subject to a uniform tax rate of 25%. The New EIT Law provides a five-year transition period starting from its effective
date for those enterprises which were established before the promulgation date of the New EIT Law and which were entitled to a
preferential lower tax rate under the then-effective tax laws or regulations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">On December 26, 2007, the
State Council issued a Notice on Implementing Transitional Measures for Enterprise Income Tax, or the Notice, providing that the
enterprises that have been approved to enjoy a low tax rate prior to the promulgation of the New EIT Law will be eligible for a
five-year transition period since January 1, 2008, during which time the tax rate will be increased step by step to the 25% unified
tax rate set out in the New EIT Law. From January 1, 2008, for the enterprises whose applicable tax rate was 15% before the promulgation
of the New EIT Law , the tax rate will be increased to 18% for year 2008, 20% for year 2009, 22% for year 2010, 24% for year 2011,
25% for year 2012. For the enterprises whose applicable tax rate was 24%, the tax rate will be changed to 25% from January 1, 2008.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Under the New EIT Law, an
enterprise established outside of China with &ldquo;de facto management bodies&rdquo; within China is considered a &ldquo;resident
enterprise,&rdquo; meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes.
The implementing rules of the New EIT Law define de facto management as &ldquo;substantial and overall management and control over
the production and operations, personnel, accounting, and properties&rdquo; of the enterprise. Because the New EIT Law and its
implementing rules are new, no official interpretation or application of this new &ldquo;resident enterprise&rdquo; classification
is available. Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">If the PRC tax authorities
determine that we are &ldquo;resident enterprises&rdquo; for PRC enterprise income tax purposes, a number of unfavorable PRC tax
consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income
as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as interest on offering
proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the
New EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify as &ldquo;tax-exempt income,&rdquo;
we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities,
which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities
that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that &ldquo;resident enterprise&rdquo;
classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC stockholders
and with respect to gains derived by our non-PRC stockholders from transferring our shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Dividends we received from General Fruit may be subject
to PRC withholding tax.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">The New EIT Law provides
that an income tax rate of 20% may be applicable to dividends payable to non-PRC investors that are &ldquo;non-resident enterprises&rdquo;
and that do not have an establishment or place of business in the PRC, or which have such establishment or place of business in
the PRC but</FONT> <FONT STYLE="font-weight: normal">the relevant income is not effectively connected with the establishment or
place of business, to the extent such dividends are derived from sources within the PRC. The income tax for non-resident enterprises
shall be subject to withholding at the income source, with the payer acting as the obligatory withholder under the New EIT Law,
and therefore such income taxes are generally called withholding tax in practice. The State Council of the PRC has reduced the
withholding tax rate from 20% to 10% through the Implementation Rules of the New EIT Law. It is currently unclear in what circumstances
a source will be considered as located within the PRC. We are an offshore holding company. Thus, if we are considered as a &ldquo;non-resident
enterprise&rdquo; under the New EIT Law and the dividends paid to us by our subsidiary in the PRC are considered income sourced
within the PRC, such dividends may be subject to a 10% withholding tax.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">The new tax law provides only
a framework of the enterprise tax provisions, leaving many details on the definitions of numerous terms as well as the interpretation
and specific applications of various provisions unclear and unspecified. Any increase in our combined company&rsquo;s tax rate
in the future could have a material adverse effect on our financial conditions and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Under PRC laws, General Fruit
and General Preservation, are obligated to withhold and pay individual income tax on behalf of our employees who are subject to
PRC individual income tax. If the PRC Subsidiary fails to withhold and/or pay such individual income tax in accordance with PRC
laws, it may be subject to certain sanctions and other penalties and may become subject to liability under PRC laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">In addition, the State Administration
of Taxation has issued several circulars concerning employee stock options. Under these circulars, our employees working in the
PRC (which could include both PRC employees and expatriate employees subject to PRC individual income tax) who exercise stock options
will be subject to PRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee stock
options with relevant tax authorities and withhold and pay individual income taxes for those employees who exercise their stock
options. While tax authorities may advise us that our policy is compliant, they may change their policy, and we could be subject
to sanctions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>We must comply with the Foreign Corrupt Practices Act.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">We are required to comply
with the United States Foreign Corrupt Practices Act, which prohibits U.S. companies from engaging in bribery or other prohibited
payments to foreign officials for the purpose of obtaining or retaining business. Foreign companies, including some of our competitors,
are not subject to these prohibitions. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from
time-to-time in mainland China. If our competitors engage in these practices, they may receive preferential treatment from personnel
of some companies, giving our competitors an advantage in securing business or from government officials who might give them priority
in obtaining new licenses, which would put us at a disadvantage. Although we inform our personnel that such practices are illegal,
we cannot assure you 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Risks Related to our Securities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><B><I></I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>Because we became a public company
by means of a reverse merger, we may not be able to attract the attention of major brokerage firms.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Additional risks may exist since we
became public through a &ldquo;reverse merger.&rdquo; Securities analysts of major brokerage firms may not provide coverage of
our securities since there is little incentive to brokerage firms to recommend the purchase of our Common Stock. No assurance can
be given that brokerage firms will want to conduct any secondary offerings on our behalf in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>If we become directly subject
to the recent scrutiny involving U.S. Chinese companies, we may have to expend significant resources to investigate and/or defend
the matter, which could harm our business operations, stock price and reputation.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Recently, many U.S. reverse merger
public companies that have substantially all of their operations in China have been the subject of intense scrutiny by investors,
financial commentators and regulatory agencies. Much of the scrutiny has centered around financial and accounting irregularities
and mistakes, a lack of effective internal controls over financial reporting and, in many cases, allegations of fraud. As a result
of the scrutiny, the publicly traded stock of many U.S. listed China-based companies that have been the subject of such scrutiny
has sharply decreased in value. Many of these companies are now subject to shareholder lawsuits and/or SEC enforcement actions
that are conducting internal and/or external investigations into the allegations. If we become the subject of any such scrutiny,
whether any allegations are true or not, we may have to expend significant resources to investigate such allegations and/or defend
our company. Such investigations or allegations will be costly and time-consuming and distract our management from our business
plan and could result in our reputation being harmed and our stock price could decline as a result of such allegations, regardless
of the truthfulness of the allegations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>GRH has
a number of Chinese minority shareholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">GRH, our public parent company, has a number
of Chinese minority shareholders who, along with other U.S. persons, were the initial shareholders of GRH. Such Chinese minority
shareholders also held shares of General Red International, Inc., a Texas corporation which sold its operating company, Sheng Da
Holdings Limited, a British Virgin Islands company, to GRH. General Red International, Inc. is currently in the process of dissolving.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These Chinese minority
shareholders mainly obtained their shares of General Red International, Inc. from its owners, Mr. Qingsong Luo and Mr. Baojun
Xin<FONT STYLE="font-size: 10pt">g, </FONT>who had provided  marketing and consulting services to one of our PRC operating
companies, General Fruit, in exchange for the shares of General Red International, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Insiders have substantial control
over us, and they could delay or prevent a change in our corporate control even if our other stockholders wanted it to occur.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our executive officers, directors, and
principal shareholders hold approximately 76.43% of our outstanding Common Stock. Accordingly, these shareholders are able to control
all matters requiring shareholders approval, including the election of directors and approval of significant corporate transactions.
This could delay or prevent an outside party from acquiring or merging with us even if our other shareholders wanted it to occur.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We cannot assure you that the Common
Stock will become liquid or that it will be listed on a securities exchange.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><B><I></I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, if we fail to meet the criteria
set forth in SEC regulations, by law, various requirements would be imposed on broker-dealers who sell its securities to persons
other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending
or selling the Common Stock, which may further affect its liquidity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>There may not be sufficient liquidity
in the market for our securities in order for investors to sell their securities.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Currently, we are eligible to be quoted
on the OTC Bulletin Board, where an investor may find it difficult to obtain accurate quotations as to the market value of the
Common Stock. There is only a limited public market that currently exists for our Common Stock and there can be no assurance that
a trading market will develop further or be maintained in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The market price of our Common Stock
may be volatile.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The market price of our Common Stock will
likely be highly volatile, as is the stock market in general, and the market for OTC Bulletin Board quoted stocks in particular.
Some of the factors that may materially affect the market price of our Common Stock are beyond our control, such as changes in
financial estimates by industry and securities analysts, conditions or trends in the industry in which we operate or sales of our
Common Stock and overall general public sentiment toward U.S.reverse merger public companies that have substantially all of their
operations in China. These factors may materially and adversely affect the market price of our Common Stock, regardless of our
performance. In addition, the public stock markets have experienced extreme price and trading volume volatility. This volatility
has significantly affected the market prices of securities of many companies for reasons frequently unrelated to the operating
performance of the specific companies. These broad market fluctuations may adversely affect the market price of our Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We have not paid dividends in the
past and do not expect to pay dividends in the future, and any return on investment may be limited to the value of our stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">We have never paid
any cash dividends on our Common Stock and do not anticipate paying any cash dividends on our Common Stock in the foreseeable future
and any return on investment may be limited to the value of our Common Stock. We plan to retain any future earning to finance growth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Risks Associated With Doing Business In China</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Because Chinese laws will govern almost all of our business&rsquo;
material agreements, we may not be able to enforce our rights within the PRC or elsewhere, which could result in a significant
loss of business, business opportunities or capital.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">We have entered into
numerous contracts governed by PRC law, many of which are material to our business. As compared with contracts in the United States,
contracts governed by PRC law tend to contain less detail and are not as comprehensive in defining contracting parties&rsquo; rights
and obligations. As a result, contracts in China are more vulnerable to disputes and legal challenges.</FONT> <FONT STYLE="font-weight: normal">The
Chinese legal system is similar to a civil law system based on written statutes. Unlike common law systems, it is a system in which
decided legal cases have little precedential value. Although legislation in the PRC over the past 25 years has significantly improved
the protection afforded to various forms of foreign investment and contractual arrangements in the PRC, these laws, regulations
and legal requirements are relatively new. Due to the limited volume of published judicial decisions, their non-binding nature,
the short history since their enactments, the discrete understanding of the judges or government agencies of the same legal provision,
inconsistent professional abilities of the judicators, and the inclination to protect local interest in the court rooms, interpretation
and enforcement of PRC laws and regulations involve uncertainties, which could limit the legal protection available to us, and
foreign investors. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant
loss of business, business opportunities or capital and could have a material adverse impact on our business, prospects, financial
condition, and results of operations. In addition, the PRC legal system is based in part on government policies and internal rules
(some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not be aware
of our violation of these policies and rules until sometime after the violation. In addition, any litigation in the PRC, regardless
of outcome, may be protracted and result in substantial costs and diversion of resources and management attention.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal"></FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Our operations and assets in China are subject to significant
political and economic uncertainties.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Changes in PRC laws and regulations,
or their interpretation, or the imposition of confiscatory taxation, restrictions on currency conversion, imports and sources of
supply, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material adverse
effect on our business, results of operations and financial condition. Under its current leadership, the Chinese government has
been pursuing economic reform policies that encourage private economic activity and greater economic decentralization. There is
no assurance, however, that the Chinese government will continue to pursue these policies, or that it will not significantly alter
these policies from time to time without notice.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Currency fluctuations and restrictions on currency exchange
may adversely affect our business, including limiting our ability to convert Chinese Renminbi into foreign currencies and, if Chinese
Renminbi were to decline in value, reducing our revenue in U.S. dollar terms.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Our reporting currency is
the U.S. dollar and our operations in China use their local currency as their functional currencies. Substantially all of our revenue
and expenses are in Chinese Renminbi. We are subject to the effects of exchange rate fluctuations with respect to any of these
currencies. For example, the value of the Renminbi depends to a large extent on Chinese government policies and China&rsquo;s domestic
and international economic and political developments, as well as supply and demand in the local market. Since 1994, the official
exchange rate for the conversion of Renminbi to the U.S. dollar had generally been stable and the Renminbi had appreciated slightly
against the U.S. dollar. However, on July 21, 2005, the Chinese government changed its policy of pegging the value of Chinese Renminbi
to the U.S. dollar. Under the new policy, Chinese Renminbi may fluctuate within a narrow and managed band against a basket of certain
foreign currencies. As a result of this policy change, Chinese Renminbi appreciated approximately 0.09% against the U.S. dollar
in 2009 and 3.35% in 2008. It is possible that the Chinese government could adopt a more flexible currency policy, which could
result in more significant fluctuation of Chinese Renminbi against the U.S. dollar. We can offer no assurance that Chinese Renminbi
will be stable against the U.S. dollar or any other foreign currency.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">The income statements of our
operations are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar
strengthens against foreign currencies, the translation of these foreign currencies denominated transactions results in reduced
revenue, operating expenses and net income for our international operations. Similarly, to the extent the U.S. dollar weakens against
foreign currencies, the translation of these foreign currency denominated transactions results in increased revenue, operating
expenses and net income for our international operations. We are also exposed to foreign exchange rate fluctuations as we convert
the financial statements of our foreign subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency
exchange rates, the conversion of the foreign subsidiaries&rsquo; financial statements into U.S. dollars will lead to a translation
gain or loss which is recorded as a component of other comprehensive income. In addition, we have certain assets and liabilities
that are denominated in currencies other than the relevant entity&rsquo;s functional currency. Changes in the functional currency
value of these assets and liabilities create fluctuations that will lead to a transaction gain or loss. We have not entered into
agreements or purchased instruments to hedge our exchange rate risks, although we may do so in the future. The availability and
effectiveness of any hedging transaction may be limited and we may not be able to successfully hedge our exchange rate risks.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Although Chinese governmental
policies were introduced in 1996 to allow the convertibility of Chinese Renminbi into foreign currency for current account items,
conversion of Chinese Renminbi into foreign exchange for capital items, such as foreign direct investment, loans or securities,
requires the approval of the State Administration of Foreign Exchange, or SAFE, which is under the authority of the People&rsquo;s
Bank of China. These approvals, however, do not guarantee the availability of foreign currency conversion. We cannot be sure that
we will be able to obtain all required conversion approvals for our operations or that Chinese regulatory authorities will not
impose greater restrictions on the convertibility of Chinese Renminbi in the future. Because a significant amount of our future
revenue may be in the form of Chinese Renminbi, our inability to obtain the requisite approvals or any future restrictions on currency
exchanges could limit our ability to utilize revenue generated in Chinese Renminbi to fund our business activities outside of China,
or to repay foreign currency obligations, including our debt obligations, which would have a material adverse effect on our financial
condition and results of operations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>The Chinese government exerts substantial influence
over the manner in which we must conduct our business activities.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">China only recently has permitted
provincial and local economic autonomy and private economic activities, and, as a result, we are dependent on our relationship
with the local government in the province in which we operate our business. Chinese government has exercised and continues to exercise
substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate
in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations,
land use rights, property and other matters. We believe that our operations in China are in material compliance with all applicable
legal and regulatory requirements. However, the central or local governments of these jurisdictions may impose new, stricter regulations
or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance
with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue
to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation
of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could
require us to divest ourselves of any interest we then hold in Chinese properties.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Future inflation in China may inhibit our activity to
conduct business in China.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">In recent years, the Chinese
economy has experienced periods of rapid expansion and high rates of inflation. These factors have led to the adoption by Chinese
government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth
and contain inflation. High inflation may in the future cause Chinese government to impose controls on credit and/or prices, or
to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>You may experience difficulties in effecting service
of legal process, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws
against us and our management.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I></I></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">We conduct substantially all
of our operations in China and substantially all of our assets are located in China. In addition, all of our directors and executive
officers reside within China. As a result, it may not be possible to effect service of process within the United States or elsewhere
outside China upon our directors and senior executive officers, including with respect to matters arising under U.S. federal securities
laws or applicable state securities laws. It would also be difficult for investors to bring an original lawsuit against us or our
directors or executive officers before a Chinese court based on U.S. federal securities laws or otherwise. Moreover, China does
not have treaties with the United States or many other countries providing for the reciprocal recognition and enforcement of judgment
of courts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Management&rsquo;s Discussion and
Analysis of Financial Condition<BR>
and Results of Operations</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following discussion of the financial condition and results
of operation of General Red for the fiscal years ended December&nbsp;31, 2011 and 2010 and for the three months ended March&nbsp;31,
2012 and 2011 should be read in conjunction with the selected consolidated financial data, the financial statements and the notes
to those statements that are included elsewhere in this Current Report on Form 8-K (&ldquo;Form 8-K&rdquo;). Our discussion includes
forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives,
expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking
statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking
Statements and Business sections in this Form 8-K. We use words such as &ldquo;anticipate,&rdquo; &ldquo;estimate,&rdquo; &ldquo;plan,&rdquo;
&ldquo;project,&rdquo; &ldquo;continuing,&rdquo; &ldquo;ongoing,&rdquo; &ldquo;expect,&rdquo; &ldquo;believe,&rdquo; &ldquo;intend,&rdquo;
&ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;should,&rdquo; <FONT STYLE="font-family: Times New Roman, Times, Serif">&ldquo;</FONT>could<STRIKE>,</STRIKE>&rdquo;
and similar expressions to identify forward-looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">COMPANY OVERVIEW</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">General Red Holding, Inc. (&ldquo;GRH&rdquo;) was established
under the laws of the State of Delaware on January&nbsp;18, 2011. The accompanying consolidated financial statements include the
financial statements of GRH and its subsidiaries (collectively, the &ldquo;Company&rdquo;). The Company is primarily engaged in
growing, preserving and marketing navel oranges.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On September&nbsp;30, 2011, GRH entered into a Share Transfer
and Issuance Agreement (the &ldquo;Agreement&rdquo;) with Han Glory International Investment Limited (&ldquo;Han Glory International&rdquo;),
a company incorporated on April&nbsp;28, 2011 under the laws of British Virgin Islands and Hua Mei Investments Limited (&ldquo;Hua
Mei&rdquo;), a company incorporated on April&nbsp;26, 2011 under the laws of the British Virgin Islands. Pursuant to the terms
of the Agreement, GRH issued 74,814,862 shares to Hua Mei, the sole stockholder of Han Glory International, in exchange for all
of the shares and beneficial interest of Han Glory International. This transaction is treated as a reverse merger, and therefore,
after the share exchange, Han Glory International became the wholly owned subsidiary of GRH.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On May&nbsp;18, 2011, Han Glory International purchased all
of the shares of Greater China International Investment Limited (&ldquo;Greater China International&rdquo;), a company incorporated
on December&nbsp;4, 2009 under the laws of Hong Kong, from Zhihao Zhang, the sole stockholder of Greater China International, for
$1,290 (HK$10,000). As a result, Greater China International became a wholly owned subsidiary of Han Glory International.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On January&nbsp;13, 2010, Greater China International formed
Nanchang Hanxin Agriculture Technology Co., Ltd. (&ldquo;WFOE&rdquo;) in the city of Nanchang, Jiangxi Province, the PRC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On February&nbsp;5, 2010, WFOE purchased all of the shares of
Xingguo General Fruit Industry Development Co., Ltd. (&ldquo;General Fruit&rdquo;) from Jiangjun Hong Group Co., Ltd., Xingping
Hou and Jiefeng Ren for an aggregate purchase price of $293,400. As a result, WFOE acquired a 100% equity interest in General Fruit.
This transaction was a capital transaction in substance. That is, the transaction was a reverse recapitalization, equivalent to
the issuance of stock by General Fruit for the net monetary assets of WFOE accompanied by a recapitalization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">General Fruit was formed in Xingguo County, Jiangxi
Province, under the corporate laws of the PRC on March&nbsp;5, 2003. The primary business of General Fruits is to grow and
sell navel oranges. On July&nbsp;14, 2008, pursuant to a series of equity transfer agreements, General Fruit acquired a 90%
equity interest in Xingguo General Red Navel Orange Preservation Company, Ltd. (&ldquo;General Preservation&rdquo;). On July 25, 2010,
General Fruits purchased the remaining 10% equity interest in General Preservation from Xingping Hou, the minority stockholder, for
$295,000 (RMB 2,000,000) and, as a result, now owns 100% of General Preservation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">General Preservation, a citrus fruits company primarily engaged in preserving,
packaging and marketing premium navel oranges, was formed as a limited liability company in Xingguo County, Jiangxi Province under
PRC laws on November 22, 2005. General Preservation provides wholesale, retail, and institutional customers in China and several other countries
with premium navel orange fruits under the trademark of &ldquo;General Red&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On September&nbsp;26, 2011, GRH purchased all of the outstanding
shares of Sheng Da Holding Limited (&ldquo;Sheng Da BVI&rdquo;), a company incorporated on May 18, 2011 under the laws of the British
Virgin Islands, from General Red Company, Ltd (&ldquo;General Red BVI&rdquo;), a limited liability company formed on August&nbsp;28,
2008 under the laws of British Virgin Islands, for $23,000. As a result, Sheng Da BVI became the wholly owned subsidiary of GRH.
On September&nbsp;29, 2011, Sheng Da BVI entered into a series of new agreements to terminate the old agreements with General Preservation,
which were originally signed between General Red BVI and General Preservation on November&nbsp;17, 2008, amended on June&nbsp;10, 2011, and
transferred to Sheng Da BVI by General Red BVI on June&nbsp;30, 2011. The old agreements included a Consultation Agreement, an
Operating Agreement, a Share Pledge Agreement, a Proxy Agreement and an Option Agreement. Upon the entry of these new agreements,
General Preservation is no longer the Variable Interest Entity of Sheng Da BVI.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">CRITICAL ACCOUNTING POLICIES AND ESTIMATES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad
debts, inventories, recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates
on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts
of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation
of the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">While our significant accounting policies are fully described
in Note 2 to our consolidated financial statements for the year ended December&nbsp;31, 2011 and 2010, we believe that the following
accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Variable interest entities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accounting standards require a VIE to be consolidated by
a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the
VIE&rsquo;s residual returns. VIEs are those entities in which we, through contractual arrangements, bear the risk of, and enjoy
the rewards normally associated with ownership of the entity, and therefore we are the primary beneficiary of the entity. On September&nbsp;29,
2011, Sheng Da BVI entered into a series of new agreements to terminate the VIE agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Seasonal nature of operations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Typically the first and fourth quarters of the year are better
in terms of profitability because of the maturity stage of the Company's products, which is usually from the month of October.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Accounts receivable</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have a policy of reserving for uncollectible accounts based
on our best estimate of the amount of probable credit losses in our existing accounts receivable. We periodically review our accounts
receivable and other receivables to determine whether an allowance is necessary based on an analysis of past due accounts and other
factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged
to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a basis for accurately estimating the likelihood of collection
has been established, we consider a number of factors when determining reserves for uncollectable accounts. We believe that we
use a reasonably reliable methodology to estimate the collectability of our accounts receivable. We review our allowances for doubtful
accounts on at least a quarterly basis. We also consider whether the historical economic conditions are comparable to current economic
conditions. If the financial condition of our customers or other parties with which we have business were to deteriorate, resulting
in an impairment of their ability to make payments, additional allowances may be required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Inventories</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Inventories, consisting of raw materials, work in process and
finished goods related to our products are stated at the lower of cost or market utilizing the weighted average method. An allowance
is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market
value due to obsolescence or quantities in excess of expected demand, we will record additional reserves for the difference between
the cost and the market value. These reserves are recorded based on estimates. We review inventory quantities on hand and on order
and record, on a quarterly basis, a provision for excess and obsolete inventory, if necessary. If the results of the review determine
that a write-down is necessary, we recognize a loss in the period in which the loss is identified, whether or not the inventory
is retained. Our inventory reserves establish a new cost basis for inventory and are not reversed until we sell or dispose of the
related inventory. Such provisions are established based on historical usage, adjusted for known changes in demands for such products,
or the estimated forecast of product demand and production requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property and equipment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using straight-line method over the estimated useful lives of the assets. The estimated useful lives of
the assets are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 42%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 58%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Estimated Useful Life</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Electronic equipment</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">5 years</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Vehicles</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">10 years</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Machinery and equipment</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">10 years</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Buildings and improvements</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">5-20 years</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Producing orchards</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">30 years</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Revenue recognition</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company recognizes revenue when persuasive evidence of an
arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability
is reasonably assured. The Company recognizes revenues from the sale of citrus products upon shipment and transfer of title.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Foreign currency translation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has evaluated the determination of its functional
currency based on the guidance in ASC Topic, &ldquo;Foreign Currency Matters,&rdquo; which provides that an entity&rsquo;s functional
currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the
environment in which an entity primarily generates and expends cash.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On its own, the Company raises financing in the U.S. dollar,
pays its own operating expenses primarily in the U.S. dollar, paid dividends to its shareholders of common stock and expects to
receive any dividends that may be declared by its subsidiaries in U.S. dollars.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Therefore, it has been determined that the Company&rsquo;s functional
currency is the U.S. dollar based on the expense and financing indicators, in accordance with the guidance in ASC 830-10-85-5.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company uses United States dollars (&ldquo;U.S. Dollar&rdquo;
or &ldquo;US$&rdquo; or &ldquo;$&rdquo;) for financial reporting purposes. The subsidiaries within the Company maintain their books
and records in Renminbi (&ldquo;RMB&rdquo;), the currency of the currency of China, the economic environment in which the Company&rsquo;s
primary subsidiaries conduct their operations. Assets and liabilities of the subsidiaries in RMB are translated into U.S. Dollars
using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of operations and comprehensive
income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical
rates. Adjustments resulting from the translation of the Company&rsquo;s financial statements are recorded as accumulated other
comprehensive income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Results of Operations for the Year Ended December&nbsp;31,
2011 Compared to the Year Ended December&nbsp;31, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Revenues</I>. For the year ended December&nbsp;31, 2011,
we had net revenues of $17,096,403, as compared to net revenues of $13,820,121 for the year ended December&nbsp;31, 2010, an increase
of approximately of $3,276,282 or 23.7%. The increase in net revenue was mainly attributable to increase in sale prices as well
as increase in sales volume. The favorable market caused by the continually rising demand for organic navel oranges in China made
it possible for us to increase our sale price. Starting from January 2011, we raised our sales prices partially in response to
continuously increasing cultivation costs such as labor and fertilizer. As a result, the unit sales price increased to approximately
$0.82 per kg for the year ended December&nbsp;31, 2011 from $0.68 per kg for the year ended December&nbsp;31, 2010. For the year
ended December&nbsp;31, 2011, the sales volume was approximately 20,972,200 kg, as compared to the sales volume of approximately
20,269,420 kg for the year ended December&nbsp;31, 2010, an increase of approximately 3.5%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Cost of sales.</I> Cost of sales increased by $751,900, or
10.4%, from $7,255,714 for the year ended December&nbsp;31, 2010 to $8,007,614 for the year ended December&nbsp;31, 2011, primarily
as a result of increased prices for labor and raw materials related to our cultivation activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Gross profit and gross margin.</I> Our gross profit was $9,088,789
for year ended December&nbsp;31, 2011 as compared to $6,564,407 for the year ended December&nbsp;31, 2010 representing gross margins
of 53.2% and 47.5%, respectively. The increase in our gross profit margin percentage was mainly attributable to sales price increases
that occurred in January 2011. Although our labor and raw material costs also increased in 2011, they did not increase as fast
as our sales prices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Selling expenses</I>. Selling expenses were $748,149 and
$516,459 for the year ended December&nbsp;31, 2011 and 2010 respectively.&nbsp;Selling expenses consisted of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">For&nbsp;the&nbsp;Year ended</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">For&nbsp;the&nbsp;Year ended</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">December&nbsp;31, 2011</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">December&nbsp;31, 2010</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Increase/decrease</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 49%; font-size: 10pt; text-align: left">Shipping and handling</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">633,504</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">408,848</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">54.9</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Compensations and related benefits</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">40,970</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">48,499</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-15.5</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Advertising and promotion</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">17,319</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">27,246</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-36.4</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Others</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">56,356</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">31,866</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">76.9</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">Total</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">748,149</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">516,459</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">31.0</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">selling expense as % of revenues</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4.4</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3.7</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Shipping and handling expense increased by $224,656 or 54.9%
due to freight rates inflation related to increasing labor and fuel cost in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Compensation and related benefits decreased by $7,529 or 15.5%
as we improved the efficiency of our sales team<STRIKE> </STRIKE>after we<STRIKE> </STRIKE>completed the construction of our sales
network in 2010. In 2010 and 2011, our customers in Beijing, Shandong, Zhejiang and Heilongjiang are able to accommodate all of
our existing production output. As a result, in 2011, we laid off one salesperson to further reduce the number of our salespersons
to four.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Advertising and promotion expense decreased by 9,927 or 36.4%.
In 2010, we completed the construction of our sales network. As a result, we spent less on advertising and promotion in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other expense mainly includes meals, customer entertainment,
vehicle maintenance and miscellaneous office expense. These expenses vary from period to period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>General and administrative expenses. G</I>eneral and administrative
expenses amounted to $746,618&nbsp;for the year ended December&nbsp;31, 2011, as compared to $568,278 for the same period in 2010,
an increase of $178,340 or 31.4%. General and administrative expenses consisted of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">For&nbsp;the&nbsp;Year ended</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">For&nbsp;the&nbsp;Year ended</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">December 31,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">December 31,&nbsp;2010</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Increase/decrease</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 49%; font-size: 10pt; text-align: left">Compensation and related benefits</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">246,459</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">228,663</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">7.8</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Depreciation</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">66,566</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">93,549</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-28.8</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Professional service</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">151,678</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">90,199</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">68.2</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Office expense</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">76,874</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26,583</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">189.2</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Real estate tax</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">20,723</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">19,784</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4.7</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Amortization of land use right</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,556</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,395</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4.7</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">Others</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">180,762</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">106,105</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">70.4</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">Total</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">746,618</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">568,278</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">31.4</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">G&amp;A expense as % of revenues</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4.4</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4.1</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Compensation and related benefits increased by $17,796 or 7.8%
due to increased labor costs in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation expense decreased by $26,983 or 28.8% due to allocation
of depreciation of certain equipment into general and administration expense instead of cost of goods sold at off-season in 2010
when we did not process navel oranges. In 2011, we changed our policy by allocating all the depreciation of this equipment into
cost of goods sold.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Professional service fees increased by $61,479 or 68.2% mainly
due to additional legal fees. Professional services primarily included audit and legal fees. In 2011, we incurred additional legal
fees in preparation for being public in the US market as compared to 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Office expenses increased by $50,291 or 189.2% mainly as a result
of expenses associated with launch of WFOE business such as licensing and administration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Real estate tax increased by $939 or 4.7% due to the depreciation
of the US dollar against RMB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Amortization of land use right increased by $161 or 4.7% due to the depreciation of the US dollar
against RMB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other general and administrative expenses primarily include
customer entertainment, utilities, repairs, telecommunication, insurance and certain low-value material. These expenses usually
increased as the sales increased. In addition, in 2011, we incurred approximately $23,000 as compensation to prior shareholders
of Shengda BVI as GRH purchased Shengda BVI.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Income from operations.</I> For the year ended December&nbsp;31,
2011, income from operations was $7,594,022, as compared to $5,479,670 for the year ended December&nbsp;31, 2010, an increase of
$2,114,352 or 38.6%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Other income (expenses)</I>. For the year ended December&nbsp;31,
2011, other income amounted to $68,258 as compared to other expenses of $195,286 for the same period in 2010.&nbsp;For the years
ended December&nbsp;31, 2011 and 2010, other income (expense) mainly included:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Government subsidy decreased by $295,880 or 100.0%.&nbsp;The
government subsidy varies from time to time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Interest expense slightly decreased by $5,564 or 2.5% because
the average balances of our bank loans kept constant from 2010 to 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other income mainly includes rental income of our product line
in off-season.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Income tax expense</I>. For the years ended December&nbsp;31,
2011 and 2010, income tax amounted to $0 and $838,162, as, beginning in January 2011, we started to enjoy income tax waiver that
we received due to our business in agricultural commodities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Net income.</I> As a result of the factors described above,
our net income for the year ended December&nbsp;31, 2011 was $7,662,280. For the year ended December&nbsp;31, 2010, we had net
income of $4,836,794.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Foreign currency translation gain.</I> The functional currency
of our subsidiaries operating in the PRC is the Chinese Yuan or Renminbi (&ldquo;RMB&rdquo;). The financial statements of our subsidiaries
are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for
the period) for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in
the consolidated statements of operations. As a result of these translations, which are a non-cash adjustment, we reported a foreign
currency translation gain of $883,187 for the year ended December&nbsp;31, 2011 as compared to $464,201 for the same period year
2010. This non-cash gain had the effect of increasing our reported comprehensive income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Comprehensive income.</I> For the year ended December&nbsp;31,
2011, comprehensive income of $8,545,467 is derived from the sum of our net income of $7,662,280 plus foreign currency translation
gains of $883,187.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>LIQUIDITY AND CAPITAL RESOURCES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December&nbsp;31, 2011, our balance of cash and cash equivalents
was $3,265,179.&nbsp;As of December&nbsp;31, 2010, our balance of cash and cash equivalents was $971,321.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following summarizes the key components of the Company&rsquo;s
cash flows for the year ended December&nbsp;31, 2011 and 2010:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the Years Ended</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">December 31,</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">December 31,</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 66%; font-size: 10pt; text-align: left">Net cash provided by operating activities</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">2,207,441</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">3,194,056</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Cash flows used in investing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(621,386</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(593,702</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Cash flows provided (used) in financing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">443,681</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,058,298</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Effect of foreign currency translation</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">264,122</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">42,135</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Net increase (decrease) in cash and cash equivalents</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,293,858</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(415,809</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company currently generates its cash flow through operations
which it believes will be sufficient to sustain current level operations for at least the next twelve months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In summary, our cash flows were:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash provided by operating activities decreased in the year
ended December&nbsp;31, 2011 by $986,615 to $2,207,441 from net cash provided by operating activities of $3,194,056 for the year
ended December&nbsp;31, 2010, which represented a 30.9% decrease from the prior year. These changes were mainly brought about by
changes as follows: an increase in cash used in prepaid leases of $13,740,662 and a decrease in cash provided from advances from
customers of $1,188,431. These decreases were offset by an increase in net income of $2,825,486 or an increase of 58.4% over the
prior period ended December&nbsp;31, 2010, an increase in cash used in accounts receivable of $1,998,788, a decrease in cash used
in inventory of $861,762 and an increase in cash provided by accounts payable and accrued expenses of $7,926,773.<FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash used in investing activity increased by $27,684 in
the period ended December&nbsp;31, 2011 compared to the same period in 2010 which is mainly due to an increase in cash used for
our acquisition of machinery and equipment of $507,523, offset by an decrease in cash used in buyout of existing shareholder of
$300,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash provided by financing activities increased by $3,501,979
to $443,681 in the period ended December&nbsp;31, 2011 compared to $3,058,298 used in financing activities in the same period of
2010. This was mainly due to an increase in cash provided by short-term loans of $2,035,540, a decrease in cash payment to related
parties of $1,980,459, offset by an increase in cash used in repayment of a long-term bank loan of $809,900.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Working capital at December&nbsp;31, 2011 decreased by
$4,791,319 to $-5,485,900 from $-694,581 or 689.8% over the same period ended December&nbsp;31, 2010. The negative working
capital in 2011 is mainly a result of purchasing 308,000 mature navel orange trees on credit in 2011 for a total price of
approximately $14,730,000 (RMB93,598,560), which needs to be repaid in two years. The expected navel orange output from these
purchased trees in 2012 is approximately 14,000 tons and will generate a profit of approximately $4,722,000 (RMB30,000,000).
Furthermore, the expected profit from the output of our existing orange trees in 2012 is approximately $5,509,000
(RMB35,000,000). In addition, as we are listed by the lending bank as a good credit customer, we reasonably believe that our
short-term bank loans will be renewed at their maturity dates. As a result we believe our operating cash is sufficient to sustain
current level operations for at least the next twelve months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Results of Operations for the Three Months Ended March&nbsp;31,
2012 Compared to the Three Months Ended March&nbsp;31, 2011</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Revenues. For the three months ended March&nbsp;31, 2012, we
had net revenues of $7,650,288, as compared to net revenues of $7,461,779 for the three months ended March&nbsp;31, 2011, an increase
of approximately $188,509 or 2.5%. The increase in net revenues was primarily attributable to increases in sales volume, offset
by a decrease in our sales prices. As navel orange orchards in our leased farmland became more mature, we were able to harvest
more navel oranges starting in December 2011 as compared to the same harvest season of 2010. As a result, we were able to sell
more navel oranges during the first quarter of 2012 as compared to the first quarter of 2011. For the three months ended March&nbsp;31,
2012, the sales volume increased to approximately 9,522,275kg from approximately 8,489,330kg for the three months ended March&nbsp;31,
2011, an increase of approximately 12.2%. However, as output of navel oranges in the South of Jiangxi Province, the homeland of
growing navel orange in China, increased each year, the market becomes more competitive. Furthermore, in the first quarter of 2012,
due to the cost increase in rental, shipping and labor, our customers, mainly wholesalers, suffered losses in their profit margin.
In order to leave room for our customers&rsquo; profit and maintain our market shares, we reduced our sales price to $0.80 for
the three months ended March&nbsp;31, 2012 from $0.88 for the three months ended March&nbsp;31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Cost of sales.</I> Cost of sales increased by $348,588, or
11.0%, from $3,166,453 for the three months ended March&nbsp;31, 2011 to $3,515,041 for the three months ended March&nbsp;31, 2012
mainly as a result of 12.2% increase in the sales volume.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Gross profit and gross margin.</I> Our gross profit was $4,135,247
for three months ended March&nbsp;31, 2012 as compared to $4,295,326 for the three months ended March&nbsp;31, 2011 representing
gross margins of 54.1% and 57.6%, respectively. The decrease in our gross profit margin was mainly attributable to decreases in
sales prices that occurred in the three months ended March&nbsp;31, 2012, while our unit cost kept at approximately $0.37 per kg
period over period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Selling expenses</I>. Selling expenses were $429,820 and
$ 156,390 for the three months ended March&nbsp;31, 2012 and 2011 respectively.&nbsp;Selling expenses consisted of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">For&nbsp;the&nbsp;three <BR>
months ended</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">For&nbsp;the&nbsp;three <BR>
months ended</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">March&nbsp;31, 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">March&nbsp;31, 2011</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Increase/decrease</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 49%; font-size: 10pt; text-align: left">Shipping and handling</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">384,278</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">145,273</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">164.5</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Compensations and related benefits</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">11,530</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,586</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">52.0</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Advertising and promotion</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">17,182</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,110</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">714.3</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Others</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,830</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,421</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,084.3</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">Total</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">429,820</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">156,390</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">174.8</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">selling expense as % of revenues</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5.6</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2.1</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Shipping and handling expenses increased by $239,005 or 164.5%,
which includes approximately $125,000 in extra costs related to ocean shipping incurred for oranges sold to United Arab Emirates
and approximately $127,227 in shipping costs in 2011, which was paid off as part of orange processing fee, and was recorded as
cost of goods. In order to correctly reflect its nature, starting from January 2012, we decided to record it as selling expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Compensation and related benefits increased by $3,944 or 52.0%
as we incurred more travelling expenses in the three months ended March&nbsp;31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Advertising and promotion expense increased by $15,072 or 714.3%
as a result of a planned promotion campaign in 2012. In order to promote the brand name of General Red Navel Oranges, we plan to
spend more on advertisements in 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other expense mainly includes packaging, customer entertainment,
vehicle maintenance and miscellaneous office expenses. Because packaging materials are low-value and hard to be counted in use,
they are expensed immediately after purchase. In the three months ended March&nbsp;31, 2012, approximately $16,798 packaging materials
were expensed. Other expenses are minimal and vary from time to time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>General and administrative expenses. G</I>eneral and administrative
expenses amounted to $179,631&nbsp;for the three months ended March&nbsp;31, 2012, as compared to $161,922 for the same period
in 2011, an increase of $17,709 or 10.9%. General and administrative expenses consisted of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">For&nbsp;the&nbsp;three<BR>
 months ended</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">For&nbsp;the&nbsp;three<BR>
 months ended</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">March&nbsp;31, 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">March&nbsp;31, 2011</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Increase/decrease</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 49%; font-size: 10pt; text-align: left">Compensation and related benefits</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">70,648</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">82,698</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">-14.6</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Depreciation</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">25,617</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,309</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">57.1</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Professional service</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">31,454</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,004</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3032.9</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Office expense</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">20,354</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">13,206</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">54.1</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Amortization of land use right</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">911</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">873</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4.4</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Others</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">30,647</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">47,832</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-35.9</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Total</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">179,631</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">161,922</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">10.9</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">G&amp;A expense as % of revenues</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2.3</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2.2</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Compensation and related benefits decreased by $12,050 or 14.6%.
In the three months ended March&nbsp;31, 2011, we awarded bonuses of approximately $8,570, while in the three months ended March&nbsp;31,
2012, we did not award any bonuses. The remaining decrease is due to the variance in management&rsquo;s travelling expense period
by period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation expense increased by $9,308 or 57.1% due to completion
of construction of our Plastic Sorting Workshop worth approximately $132,000 and addition of certain equipment in December 2011,
which we started to record depreciation during the three months ended March&nbsp;31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Professional service fees increased by $ 30,450 mainly as a
result of appraisal fee of approximately $20,000 associated with a bank loan application and US professional fees such as legal
and auditor fees in preparation for being public in the US market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Office expense increased by $7,148 or 54.1% mainly as a result
of business expansion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Amortization of land use right increased by $38 or 4.4% due
to changes in the exchange rate of the US dollar to RMB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other general and administrative expenses mainly include customer
entertainment, utilities, repairs, telecommunication, insurance and certain low-value material. These expenses usually increased
as sales increased. We started reducing our costs related to customer entertainment, which decreased by $17,043 period over period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Income from operations.</I> For the three months ended March&nbsp;31,
2012, income from operations was $3,525,796, as compared to $3,977,014 for the three months ended March&nbsp;31, 2011, a decrease
of $451,218 or 11.3%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Other income (expenses)</I>. For the three months ended March&nbsp;31,
2012, other expense amounted to $67,371 as compared to other expenses of $8,343 for the same period in 2011.&nbsp;For the three
months ended March&nbsp;31, 2012 and 2011, other income (expense) mainly included:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Interest expense slightly increased by $29,542 or 49.2% due
to a significant increase in the average balances of our bank loans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other income mainly includes rental income of our product line
in off-season and certain government subsidies. In the three months ended March&nbsp;31, 2012, we received government subsidies
such as bank loan interest discount and an eco-irrigation subsidy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Income tax expense</I>. For both the three months ended March&nbsp;31,
2012 and 2011, income tax amounted to $0, as we started to enjoy income tax waiver in January 2011, as we engaged in agricultural
commodities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Net income.</I> As a result of the factors described above,
our net income for the three months ended March&nbsp;31, 2012 was $3,458,425. For the three months ended March&nbsp;31, 2011, we
had net income of $3,968,671.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Foreign currency translation gain.</I> The functional currency
of our subsidiaries operating in the PRC is the Chinese Yuan or Renminbi (&ldquo;RMB&rdquo;). The financial statements of our subsidiaries
are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for
the period) for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in
the consolidated statements of operations. As a result of these translations, which are a non-cash adjustment, we reported a foreign
currency translation gain of $140,902 for the three months ended March&nbsp;31, 2012 as compared to $111,938 for the same period
year 2011. This non-cash gain had the effect of increasing our reported comprehensive income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Comprehensive income.</I> For the three months ended March&nbsp;31,
2012, comprehensive income of $3,599,327 is derived from the sum of our net income of $3,458,425 plus foreign currency translation
gains of $140,902.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>LIQUIDITY AND CAPITAL RESOURCES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of March&nbsp;31, 2012, our balance of cash and cash equivalents
was $647,778.&nbsp;As of March&nbsp;31, 2011, our balance of cash and cash equivalents was $1,610,934.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following summarizes the key components of the Company&rsquo;s
cash flows for the three months ended March&nbsp;31, 2012 and 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the Three Months Ended</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">March 31,</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">March 31,</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 66%; font-size: 10pt; text-align: left">Net cash (used in) provided by operating activities</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">(2,626,697</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; font-size: 10pt; text-align: right">1,088,345</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Cash flows (used in) investing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(18,668</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,141</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Cash flows provided by (used) in financing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">377</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(456,136</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Effect of foreign currency translation</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">27,587</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">8,545</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Net (decrease) increase in cash and cash equivalents</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(2,617,401</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">639,613</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company currently generates its cash flow through operations
which it believes will be sufficient to sustain current level operations for at least the next twelve months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In summary, our cash flows were:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash used in operating activities increased in the three
months ended March&nbsp;31, 2012 by $3,715,042 to $2,626,697 from net cash provided by operating activities of $1,088,345 for the
three months ended March&nbsp;31, 2011, which represented a 341.3% decrease from the prior year. These changes were mainly brought
about by changes as follows: a decrease in net income of $510,246, an increase in cash used in accounts receivable of $2,099,277,
a decrease in cash provided from accounts payable and accrued expenses of $2,718,219 and an increase in cash used in inventory
of $947,026. This was offset by a decrease in cash used in advance payment of $1,628,927 and an increase in cash provided by advances
from customers of $597,079.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash used in investing activity increased by $17,527 in
the period ended March&nbsp;31, 2012 compared to the same period ended in 2011, which is mainly due to an increase in cash used
for our acquisition of machinery and equipment of $6,874.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash provided by financing activities increased by
$456,513 to $377 in the period ended March&nbsp;31, 2012 compared to $456,136 used in financing activities in  the same
period  in 2011. This was mainly due to a decrease in cash used to repay related parties of $456,513.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Working capital at March&nbsp;31, 2012 decreased by $4,942,957
to $-1,435,551 from $3,507,406 or 140.9% over the same period ended March&nbsp;31, 2011. The negative working capital in 2012 is
mainly a result of purchasing 308,000 mature navel orange trees on credit in 2011 for a total price of approximately $14,730,000
(RMB93,598,560), which needs to be repaid in two years. The expected navel orange output from these
purchased trees in 2012 is approximately 14,000 tons and will generate a profit of approximately $4,722,000 (RMB30,000,000).
Furthermore, the expected profit from the output of our existing orange trees in 2012 is approximately $5,509,000
(RMB35,000,000). In addition, as we are listed by the lending bank as a good credit customer, we reasonably believe that our
short-term bank loans will be renewed at their maturity dates. As a result we believe our operating cash is sufficient to sustain
current level operations for at least the next twelve months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Description of Securities</U>&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Authorized Capital Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our authorized capital stock consists of 200,000,000 shares
of Common Stock, par value $0.0001 per share, of which 127,349,551 shares are outstanding.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Common Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Holders of Common Stock are entitled to cast one vote for each
share on all matters submitted to a vote of shareholders, including the election of directors. The holders of Common Stock are
entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available
therefore. See &ldquo;Dividend Policy.&rdquo; Such holders do not have any preemptive or other rights to subscribe for additional
shares. All holders of Common Stock are entitled to share ratably in any assets for distribution to shareholders upon our liquidation,
dissolution or winding up. There are no conversion, redemption or sinking fund provisions applicable to the Common Stock. All outstanding
shares of Common Stock are fully paid and non-assessable.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="text-underline-style: none">Transfer
Agent</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-weight: normal; text-underline-style: none">The
transfer agent of our common stock is Globex Transfer, LLC, located at 780 Deltona Boulevard, Suite 202, Deltona, Florida 32725.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Market
Price of and Dividends on Common Equity and Other Shareholder Matters</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Market Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There is no established public trading market for our Common
Stock. Our Common Stock is quoted on the OTC Bulletin Board under the symbol &ldquo;GELT&rdquo;, but there is no active trading
at this time. Should a market develop for our shares, the trading price of the Common Stock is likely to be highly volatile and
could be subject to wide fluctuations in response to factors such as actual or anticipated variations in quarterly operating results,
announcements of technological innovations, new sales formats, or new services by us or our competitors, changes in financial estimates
by securities analysts, conditions or trends in the fruit or agriculture markets, announcements by us or our competitors of significant
acquisitions, strategic partnerships, joint ventures, capital commitments, additions or departures of key personnel, sales of common
stock and other events or factors, many of which are beyond our control. In addition, the stock market in general, and the market
for fruit and agricultural products in particular, has experienced extreme price and volume fluctuations that have often been unrelated
or disproportionate to the operating performance of such companies. These broad market and industry factors may materially adversely
affect the market price of the common stock, regardless of our operating performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Consequently, future announcements concerning us or our competitors,
litigation, or public concerns as to the commercial value of one or more of our products or services may cause the market price
of our common stock to fluctuate substantially for reasons which may be unrelated to operating results. These fluctuations, as
well as general economic, political and market conditions, may have a material adverse effect on the market price of our Common
Stock.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Holders of Common Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of July 11, 2012, there were 634 record holders of Common
Stock.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dividend Policy</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We currently intend to retain all available funds and any future
earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends on our Common Stock
for the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Future cash dividends, if any, will be at the discretion
of our Board of Directors and will depend upon our future operations and earnings, capital requirements and surplus, general
financial condition, contractual restrictions and other factors as our Board of Directors may deem relevant. Dividends or
other distributions will only be paid or made if we are able to pay our debts as they fall due in the ordinary course of
business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, under PRC Company Law and relevant rules and regulations,
our PRC subsidiaries may pay dividends only out of their retained earnings/net profit, if any, calculated according to PRC accounting
standards, and only after accumulated losses from preceding years have been fully covered and the following appropriations have
been made:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">a) appropriations to the statutory surplus reserve equivalent
to 10% of its net profits less any accumulated losses, as determined under PRC GAAP; no further appropriations to the statutory
surplus reserve are required once this reserve reaches an amount equal to 50% of its respective registered capital;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">b) appropriations to a discretionary surplus
reserve as approved by the shareholders in shareholders' meeting.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indemnification of Directors and Officers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our bylaws provide that we must, to the maximum extent and in
the manner permitted by the General Corporation Law of Delaware, indemnify any person against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or
completed action, suit, or proceeding in which such person was or is a party or is threatened to be made a party by reason of the
fact that such person is or was our director or officer of the corporation. Any repeal or modification of these provisions will
not adversely affect any right or protection of any person in respect of any act or omission occurring prior to the time of such
repeal or modification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, our bylaws provide that we must indemnify our directors
and officers and we must advance expenses, including attorneys' fees, to our directors and officers in connection with legal proceedings,
subject to limited exceptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Principal Stockholders</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">The following table sets forth certain information
regarding beneficial ownership of our Common Stock as of July 11, 2012 (after giving effect to the Share Exchange and the related
issuances) by (i)&nbsp;each person (or group of affiliated persons) who is known by us to own more than five percent of the outstanding
shares of our Common Stock, (ii)&nbsp;each director, executive officer and director nominee, and (iii)&nbsp;all of our directors,
executive officers and director nominees as a group. As of July 11, 2012, we had 127,349,551 shares of Common Stock issued and
outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">Beneficial ownership is determined in accordance
with SEC rules and generally includes voting or investment power with respect to securities. Unless otherwise noted, the principal
address of each of the stockholders, directors and officers listed below is Room 2903, Unit B, Jianwai SOHO East District, 39
East Third Ring  Road Central, Chaoyang District, Beijing City, China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center">Name &amp; Address of Beneficial Owner</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><B>Amount &amp; Nature of Beneficial Ownership <SUP>(1)</SUP></B></TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center"><B>Percent of Class<SUP>(2)</SUP></B></TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 58%; font-size: 10pt; padding-left: 5.4pt">Xingping Hou<SUP>(3)</SUP></TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; font-size: 10pt; text-align: right">79,982,724</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; font-size: 10pt; text-align: right">62.80</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">Yongjun Zeng</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26,505</TD><TD STYLE="font-size: 10pt; text-align: left"></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">*</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">Shaokang Zeng</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">Across Asia Investments Limited<SUP>(4)</SUP></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,660,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6.80</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">Ever Shining Investments Limited<SUP>(5)</SUP></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,670,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6.81</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">Hua Mei Investments Limited<SUP>(3)</SUP></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">79,982,724</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">62.80</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">Zhihao Sabio Zhang<SUP>(3)</SUP></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">79,982,724</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">62.80</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 5.4pt">All officers and directors as a group (3 persons)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">80,009,229</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">62.83</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #002060">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">*Less than 1 percent</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(1)</TD><TD STYLE="text-align: left">Pursuant to Rule 13d-3 under the Exchange Act, a person
has beneficial ownership of any securities as to which such person, directly or indirectly, through any contract, arrangement,
undertaking, relationship or otherwise has or shares voting power and/or investment power or as to which such person has the right
to acquire such voting and/or or investment power within 60 days.&nbsp; Unless otherwise stated, each beneficial owner has sole
power to vote and dispose of the shares.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: left">Based on 127,349,551 shares of Common Stock outstanding
as of July 11, 2012.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(3)</TD><TD STYLE="text-align: left">Xingping Hou is the sole director of Hua Mei Investments
Limited, and Zhihao Sabio Zhang owns all of the outstanding shares of Hua Mei Investments Limited. Pursuant to a call option agreement
dated July 1, 2012, Mr. Hou has the right to purchase all of the shares in Hua Mei Investments Limited held by Mr. Zhang . Such
option vests in three annual installments over a period of three years, of which 34% becomes exercisable on July 1, 2013, 33%
becomes exercisable on July 1, 2014, and the remaining 33% becomes exercisable on July 1, 2015. The option expires on July 1,
2017.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(4)</TD><TD STYLE="text-align: left">Shiqiu Xiao controls Across Asia Investment Limited.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(5)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Chunquan Luo controls Ever
Shining Investment Limited.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Item 3.02&#9;Unregistered
Sales of Equity Securities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In connection with the Exchange Agreement, on July 11, 2012,
we issued an aggregate of 125,112,803 shares of Common Stock to the GRH Shareholders. We received in exchange from the GRH Shareholders
125,112,803 shares of GRH, representing 100% of the issued and outstanding shares of GRH, which exchange resulted in GRH becoming
our wholly owned subsidiary. The issuance of such securities was exempt from registration pursuant to Section 4(2) under the Securities
Act of 1933, as amended, and Regulation D or Regulation S promulgated thereunder.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Item 4.01&#9;Change in Registrant&rsquo;s Certifying Accountant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Effective July 11, 2012, (the
&ldquo;Termination Date&rdquo;), we terminated our engagement of Weinberg &amp; Baer LLC (&ldquo;Weinberg&rdquo;) as our independent
registered public accounting firm and retained Patrizio &amp; Zhao, LLC (&ldquo;Patrizio&rdquo;) as our independent public accounting
firm. This change in the Company's independent registered public accounting firm was unanimously approved by our board of directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">The principal accountant's
reports of Weinberg on the financial statements of the Company as of and for the years ended December 31, 2011 and 2010 did not
contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting
principles, except that the reports of Weinberg for the fiscal year ended December 31, 2011 indicated conditions which raised substantial
doubt about the Company&rsquo;s ability to continue as a going concern.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">During our two most recent
fiscal years and through the Termination Date, there were no disagreements with Weinberg on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure, which if not resolved to Weinberg&rsquo;s satisfaction
would have caused it to make reference thereto in connection with its reports on the financial statements for such periods. During
our two most recent fiscal years and through and through the Termination Date, there were no reportable events of the type described
in Item 304(a)(1)(v) of Regulation S-K.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">During our two most recent
fiscal years and through the Termination Date, we did not consult with Patrizio with respect to any of (i) the application of accounting
principles to a specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on our
financial statements; or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation
S-K) or an event of the type described in Item 304(a)(1)(v) of Regulation S-K.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">We provided Weinberg with
a copy of the foregoing disclosure and requested Weinberg to furnish us with a letter addressed to the Securities and Exchange
Commission stating whether it agrees with the statements made therein. A copy of such letter, dated July 12], 2012, furnished by
Weinberg, is filed as Exhibit 16.1 to this Current Report on Form 8-K.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Item 5.01&#9;Changes
In Control of the Registrant</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On the Closing Date, we consummated the transactions contemplated
by the Exchange Agreement, pursuant to which we acquired all of the issued and outstanding shares of GRH in exchange for the issuance
in the aggregate of 125,112,803 shares of our Common Stock to the GRH Shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other than the transactions and agreements disclosed in this
Form 8-K, we know of no other arrangements which may result in our change in control.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Item 5.02 &#9;Departure
of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On the Closing Date, Yehuda Smaya Szender resigned as President,
Chief Executive Officer, Treasurer and Director and Ryan Goldstein resigned as Secretary and Director, effective immediately. Our
Board of Directors appointed Xingping Hou to serve as Chairman, Chief Executive Officer and President and Shaokang Zeng to serve
as Chief Financial Officer and Director and Yongjun Zeng to serve as Secretary and Director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Set forth below is information regarding our current directors,
executive officers and director nominee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.75pt solid"><B>Name</B></P></TD>
    <TD STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.75pt solid"><B>Age</B></P></TD>
    <TD STYLE="width: 61%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.75pt solid"><B>Position</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Xingping Hou</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">51</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Chairman, Chief Executive Officer and President</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Shaokang Zeng</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">34</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Chief Financial Officer and Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Yongjun Zeng</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">41</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Secretary and Director</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">______________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Xingping Hou, Chairman, Chief Executive Officer and President.</B>
Mr. Hou will serve as our Chairman, Chief Executive Officer and President. Mr. Hou has served as the Executive Director, Manager
of General Fruit since March 2003 and as the Executive Director, Manager of General Preservation since July 2003.
Mr. Hou has also served as the Chairman of the Board for each of General Red Industry Group Co., Ltd. and Shaanxi General Red Agricultural
Development Co., Ltd. since May 2010 and October 2010, respectively. He has also served as the Chairman of the Board and President
of General Red International, Inc. since November 2007. Since May 2011, Mr. Hou has served as the Chief Executive Officer, President
and Chairman of General Red Holding, Inc. Mr. Hou has also served as a director of Hua Mei Investments Limited and Han Glory International
Limited since April 2011. Mr. Hou graduated from the PLA Nanchang Army Institute.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Shaokang Zeng, Chief Financial Officer and Director.<FONT STYLE="font-weight: normal">
Mr. Zeng will serve as our Chief Financial Officer and a director. Mr. Zeng has served as the Finance Department Manager of General
Fruit since December 2006. Mr. Zeng graduated from the People&rsquo;s University of China where he studied accounting
and received an MBA from Beijing University of Chemical Technology, College of Business Administration.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Yongjun Zeng, Secretary and Director</B>. Mr. Zeng will serve
as our Secretary and a director. Mr. Zeng has served as the Assistant General Manager of General Fruit since August 2003.
Since May 2011, Mr. Zeng has also served as the Vice President of General Red Holding, Inc. He has also served as a director of
General Red Industry Group Co., Ltd. since March 2006. Mr. Zeng graduated from the Central University of Finance and Economics
College of Adult Education where he studied finance.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Family Relationships</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There are no family relationships between any of our directors
or executive officers.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Employment Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We do not have any employment agreements with our executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Executive Compensation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">None of our executive officers, namely Xingping Hou, our Chief Executive Officer, and Shaokang Zeng, our
Chief Financial Officer, have received compensation, paid or accrued, by the Company or its subsidiaries in 2011 and 2010.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Director Compensation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Currently our directors serve without compensation.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Director Independence</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Currently, we do not have
any independent directors. Since our common stock is not currently listed on a national securities exchange, we have used the definition
of &ldquo;independence&rdquo; of The NASDAQ Stock Market to make this determination. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">Under NASDAQ Listing Rule
5605(a)(2), an &quot;independent director&quot; is a &quot;person other than an officer or employee of the company or any other
individual having a relationship which, in the opinion of the company's board of directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director.&quot; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">We do not currently have a
separately designated audit, nominating or compensation committee. However, we do intend to comply with the independent director
and committee composition requirements in the future.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certain Relationships And Related Party Transactions</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">None.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Item 5.06&#9;Change in Shell Company Status.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">As described in Item 1.01
of this Current Report on Form 8-K, on the Closing Date, we acquired all of the outstanding shares of GRH from the GRH Shareholders
and the GRH Shareholders transferred all of the outstanding shares of common stock of GRH to us. In exchange, we issued to the
GRH Shareholders the Common Stock, equal to 98.24% of all of our shares. As a result of the transactions contemplated by the Exchange
Agreement, GRH became our wholly owned subsidiary. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">As the result of the consummation
of the Share Exchange, we are no longer a shell company as that term is defined in Rule 12b-2 of the Securities Exchange Act of
1934, as amended.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Item 8.01 &#9;Other Events.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">None.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Item 9.01 &#9;Financial Statements and Exhibits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><U>Financial statements of business acquired</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">The Audited Consolidated Financial Statements
of GRH as for the years ended December 31, 2011 and 2010 are filed as Exhibit 99.1 to this current report and are incorporated
herein by reference. Unaudited Consolidated Financial Statements of GRH for the three months ended March 31, 2012 and 2011 are
filed as Exhibit 99.2 to this current report and are incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><U>Pro forma financial information</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">Unaudited Pro Forma Financial Statements of
GRH as of March 31, 2012 for the year ended December 31, 2011 and for the three months ended March 31, 2012 are filed as Exhibit
99.3 to this current report and are incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">Shell Company Transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">Reference is made to Items 9.01(a) and 9.01(b)
and the exhibits referred to therein which are incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">Exhibits</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 25pt; font-style: italic">Exhibit No.</TD>
    <TD STYLE="width: 84%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; font-style: italic">Description</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">2.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Share Exchange Agreement, dated July 11, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">10.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Form of Orange Purchase Contract</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">10.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Call Option Agreement, dated July 1, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">10.3</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Property Use Certificates, dated August 30, 2007 (translation)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">10.4&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Land Use Certificate, dated November 15, 2005 (translation)&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">10.5&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Office Lease Contract, dated March 1, 2011, between General Fruit and
    Shiyong Xu (translation)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">10.6&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Office Lease Contract, dated February 10, 2012,
    between General Fruit and Taixiang Wang&nbsp;(translation)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">16.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Letter of Weinberg &amp; Baer LLC to the SEC, dated July 12, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">21</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Subsidiaries of the Registrant</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">99.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Audited consolidated balance sheets of General Red Holding, Inc. and its subsidiaries for the fiscal year ended December 31, 2011 and 2010 and the related consolidated statements of income, stockholders&rsquo; equity and cash flows for each of the two years ended December 31, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">99.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Unaudited statements of income and cash flows of General Red Holding, Inc. for the three months ended March 31, 2012 and 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 25pt">99.3</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Unaudited pro forma financial statements and related notes thereto</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SIGNATURES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

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<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">GELTOLOGY INC.</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Dated: July 17, 2012&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="width: 4%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 46%">/s/ Xingping Hou</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Name: Xingping Hou<BR>
Title: Chief Executive Officer</TD></TR>
</TABLE>

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
July 11, 2012
Geltology Inc.
(Exact name of registrant as specified in
charter)
Delaware
(State or other jurisdiction of incorporation)
333-174874
(Commission File Number)
35-2379917
(IRS Employer Identification No.)
Room 2903, Unit B
Jianwai SOHO East District
39 East Third Ring Road Central
Chaoyang District, Beijing City, China
(Address of principal executive offices
and zip code)
86-10-5869-4611
(Registrant's
telephone number including area code)
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this Form 8-K that are not historical
are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These include statements about the Registrant's expectations, beliefs, intentions
or strategies for the future, which are indicated by words or phrases such as "anticipate," "expect," "intend,"
"plan," "will," "we believe," "management believes" and similar words or phrases.
The forward-looking statements are based on management's current expectations and are subject to certain risks, uncertainties
and assumptions. Our actual results could differ materially from results anticipated in these forward-looking statements. All forward-looking
statements included in this document are based on information available to us on the date hereof, and we assume no obligation to
update any such forward-looking statements.
Item 1.01	Entry
into a Material Definitive Agreement.
Share Exchange Agreement
On July 11, 2012 (the "Closing Date"), Geltology
Inc., a Delaware corporation ("GELT", references to "GELT" shall refer to GELT prior to the consummation
of the Share Exchange and references to the "Company," "we," "our" or "us" shall
refer to GELT, and its wholly-owned subsidiaries, after the consummation of the Share Exchange Agreement), entered into a Share
Exchange Agreement (the "Exchange Agreement"), with General Red Holding, Inc. ("GRH"), a Delaware corporation,
and the shareholders of GRH ("GRH Shareholders"). Pursuant to the terms of the Exchange Agreement, GRH agreed to pay
the two principal shareholders of GELT $455,000, and the GRH Shareholders transferred to GELT all of the outstanding shares of
common stock of GRH. In return, GELT issued, in the aggregate, 125,112,803 shares of GELT common stock, par value $0.0001 per share
("Common Stock") (such transaction is hereinafter referred to as the "Share Exchange") to the GRH Shareholders.
In connection with the transaction, the two principal shareholders of GELT also surrendered for cancellation an aggregate of 4,513,252
shares of Common Stock beneficially owned by them. As a result of the Share Exchange, we are now a holding company, through which
our operating companies in the People's Republic of China ("China" or the "PRC"), are primarily engaged
in planting, preserving, packaging and marketing premium navel oranges for distribution and sale throughout the PRC.
Item 2.01	Completion
of Acquisition or Disposition of Assets
On the Closing Date, we consummated the transactions contemplated
by the Exchange Agreement as described in Item 1.01 above.
2
As
a result of the Share Exchange, our current corporate structure is as follows:
3
Business
Company Background
GELT was incorporated under the laws of the State of Delaware
on March 24, 2010. GELT's primary business involved the sourcing of production and other services in the Far East, and specifically
China. In particular, GELT matched factories in China with western companies that were looking to manufacture goods in China. This
line of business included sourcing for existing and new products and supplies, sourcing for high or low volume production, product
development to assist with local design companies, process and manufacturing development in China, quality control, facilitating
and coordinating visits by buyers' representatives to China, negotiating the best prices from reputed suppliers, providing
production updates to buyers and arranging shipments and timely deliveries. GELT also planned to develop a second business line
that would focus on promoting yoga accessories by selling its products via the "e-promotional" gift industry market
in the United States, initially by the sale of yoga mats to corporations as part of their gift promotions to their employees, customers,
and clients. GELT never generated any revenues from this second business line.
References to "we," "our," "ours"
and "us," include our operating subsidiaries in the PRC, Xingguo General Fruit Industry Development Co., Ltd. ("General
Fruit") and its wholly owned subsidiary Xingguo General Red Navel Orange Preservation Company Ltd. ("General Preservation").
Our Current Business and Products
As a result of the Share Exchange, we
operate our business through our wholly-owned subsidiary, General Fruit, located in the Jiangxi Province of the PRC. We are one
of the leading companies engaged in the planting, post-harvest processing and temperature controlled preservation and storage
of organic navel oranges. We contract with approximately 30 farmers to plant and harvest oranges in our orchards and provide them
with not only the raw materials necessary to plant, but also technical guidance and services to monitor quality of the crops.
When navel oranges are harvested, we preserve, store and subsequently sell them throughout many regions in the PRC. Although our
business operations primarily consist of the above described partnerships with local farmers, we also purchase oranges from farmers
and cooperatives who do not use our land. The oranges purchased from other farmers and cooperatives are not planted and harvested
as organic navel oranges. However, once purchased we commercially process and preserve them according to the standards of organic
navel oranges. All of the navel oranges we sell use the "General Red" brand name. We have received numerous honors
and certifications because of the high quality of our branded navel oranges.
Our goal is to become the largest integrated grower, packager
and distributor of organic navel oranges in China. We have invested in our business by devoting resources to the establishment
of significant orange groves, by building a state of the art storage and preservation facility and by marketing and advertising
our products. Currently, we have planted 515,843 orange trees in two orchards totaling 16,927 mu of land (approximately 2,788.5
acres). We lease 10,000 mu of the land (approximately 1,647.5 acres) from the local government, and developed our own orange groves
on that land. In addition, we lease from individual farmers 7,326.5 mu of orange groves (approximately 1,206.9 acres).
4
We utilize a "company + farmers" model for our production
of organic navel oranges. We allow the farmers to use our orchards, and provide them with raw materials, such as seedlings and
fertilizer, as well as production tools, electricity and irrigation facilities necessary for planting and harvesting the oranges.
Our in-house fruit forest management and protection team provide technical support and guidance to the farmers to optimize cultivation,
irrigation, fertilization, water and soil conservation, administration of pesticides for weed and pest control, and protection
against frost and rain. We instruct farmers on how to implement these quality control measures, so that the oranges are of the
highest quality. Prior to the growing season, the farmers enter into short-term sales contracts with us, which provide that we
will purchase a specified quantity of oranges from the farmers, based on weight, at a specified purchase price. We divide the
production yield with farmers, so that 60% of all product is for us, and 40% is for the farmers. These contracts further provide
that we are only obligated to purchase those oranges that meet our quality specifications. We believe that this is an attractive
model for farmers, as it allows them to bypass the logistics and added costs of going through wholesale or retail markets to sell
their oranges. This model is also beneficial to us because we have an ongoing supply of oranges, which we know are grown according
to our specifications enabling us to consistently maintain our high level of quality.
In Ganzhou, Jiangxi, we constructed one of the largest navel
orange temperature-controlled preservation facilities in the Southern Jiangxi region of China on 39,171 square meters of land
(approximately 9.68 acres), of which 11,131 square meters (approximately 2.75 acres) is the construction area of the main structure
for the preservation facility. We have approximately 4,346 square meters of administrative offices, dormitories and power supply
rooms next to the facility. The maximum storage capacity is 7,000 tons and maximum capacity is 10,000 tons. Currently, most of
the navel orange storage facilities in the Southern Jiangxi region are cold storage, with few that are temperature controlled
facilities. The temperature-controlled storage and preservation technology used in our facility comes from Beijing Furui Ventilation
Protection Company ("Beijing Furui"), which was previously a subsidiary of China Agricultural University and Chinese
Academy of Agricultural Sciences. Beijing Furui was the construction contractor in the design and build of our temperature-controlled
preservation facility, and provided the main equipment used in the facility. We purchased our post-harvest processing equipment,
which includes our selection and packaging lines, from MAF RODA Group of Spain ("MAF RODA"). As part of the purchasing
contract MAF RODA provides us with technical training on how to operate the equipment, which includes educating our employees
about the automatic control technology used in the equipment. We have two modern sorting lines at our Ganzhou facility. The sorting
line has a sorting capacity of 40 tons/hour. These sorting lines clean, disinfect and apply wax coating to the oranges, and then
select, classify, and send the naval oranges to pre-storage.
Industry and Market Overview
There are three primary areas of business operations in the
navel orange industry: production, post-harvest processing and preservation.
Navel Orange Production
The navel orange industry has been growing rapidly in
China due to governmental support and an increase in demand for navel oranges. Planting areas and the production of navel
oranges in China have steadily increased since the 1980's. Navel orange production requires stringent climate
conditions, therefore, there are limited areas in the world where navel oranges can be produced and, as a result, production
is primarily concentrated in warmer climates, such as California, Spain, South Africa, Australia, and "Gannan –
Southern Hunan – Northern Guangxi" in China. The Chinese government has identified the Gannan area as "the
hometown of the navel orange in China", and has been willing to provide intensive support to local producers. The
Ministry of Agriculture named Gannan navel oranges as one of the nine competitive agricultural products in the country, and
listed Gannan as one of the key developing areas. The Ministry planned to reach 5 million mu (1 mu = 1/15 hectare) of
planting area and yield 5.5 million tons of navel oranges in Gannan – Southern Hunan – Northern Guangxi by 2012.
Gannan planted 1.76 million mu and produced 1.22 million tons of navel oranges in 2010. It has been estimated that the
planting area in 2011 was 1.81 million mu, with a production yield of 1.4 million tons. Gannan has ranked first worldwide by
navel orange planting and ranked third worldwide by annual output, according to China Industrial Economy News.
5
General Fruit is one of six leading enterprises
in Gannan and plays a decisive role in Gannan's navel orange industry. "Ganan Navel Orange" is the common brand
shared by all producers in Gannan area. Thanks to its superior quality and effective brand strategy, "General Red"
stands out among all of the Gannan brands and has become one of the most influential brands in China. General Fruit has become a leader in producing organic navel oranges, with a planting area in Gannan
of 38.5% of all such organic navel orange planting areas in Southern Jiangxi.
We anticipate that the demand for navel oranges will
continue to increase. In 2008 per capita fruit consumption was 61.4 kg worldwide, 83.3 kg in developed countries, 55.4 kg
in developing countries, and 45.6 kg in China. Compared with 63% in other countries and over 80% in Brazil and the US,
orange production accounts for only about 17% of citrus production in China, among which navel orange production accounts for
less than 10%. Approximately 98% of navel oranges produced in China are sold in the domestic market, with only 2% exported to
other countries. More than 95% of citrus fresh fruit is sold domestically in China, with less than 5% of such fruit exported.
A large portion of raw materials for orange juice is imported from Brazil and the US. We believe that such data indicates
there is a significant room for growth in this industry in China.
Post-harvest
processing
The post-harvest  processing of harvested
fruits also has broad prospects in China. Post-harvest processing includes selecting, grading, cleaning, pre-cooling, waxing and
packaging. Proper processing can minimize post-harvest loss, maintain the high nutritional content and freshness, slow down the
metabolic process of fruit in its natural state, enhance the appearance of the fruit and extend the life of the fruit. Currently,
the rate of post-picking commercially treated citrus fresh fruit is only 5% in China, compared to more than 90% in other developed
major producing countries. The rate of citrus processing in China is much lower than the average level of 35% in the world, which
is much lower than that of Brazil and the US, which is 80% and 70%, respectively.
Preservation
The storage and preserving technology in China lags behind that
of developed countries with citrus exports due to grossly inadequate storage and preservation facilities. The rate of cold chain
distribution of fruits and vegetables is only 5%, and the rate of refrigerated transportation hardly reaches 15%, which is much
lower than in developed countries. Cold chain distribution is a temperature controlled distribution supply chain, resulting in
an uninterrupted series of storage and distribution activities maintaining a given temperature. It is used to help extend and ensure
the shelf life of products, including agricultural products. The loss rate in distribution of oranges in China is 20-30%, compared
with less than 5% in developed countries. The National Development and Reform Commission of China developed a "cold chain
logistics development plan" in 2010, which plans to improve the cold chain distribution rate to 20% and refrigerated transportation
rate to 30%, and reduce loss rate in distribution to 15%.
Most navel oranges mature in October and November, and are distributed
between the months of October through January. There is only a small amount of citrus fruit distributed between March and August.
No other citrus fruit is available in the summer months except a small amount of Valencia oranges from Spain. General Fruit can
extend its sales cycle by 2-3 times due to its strong preservation abilities, which enables us to sell navel oranges at a higher
price during the off-season when other distributors may not have sufficient supply.
6
Our Competitive Strengths
Our competitive strengths include:
Quality of Orange
s
and Brand Name
.
We are committed to purchasing high quality oranges. Our agreements with the farmers provide that each orange must have a solid
shape, even stem and a smooth surface and be free of any black spots, fertilizer spots, cracks or worms. The agreements further
provide that oranges may not be picked when it is raining, or within three days of rain, when it is foggy or before the dew on
the orange tree has dried. The Company has received more than 20 honors related to navel oranges and the Company's preservation
facility. Among the honors the Company has received are the titles of "Chinese Famous Brand" by the Fruits Logistics
Association of China, "Famous Agricultural Brand of Jiangxi" by the Jiangxi provincial government, and "Key
Leading Enterprise of Ganzhou in Agricultural Industrialization" by the Ganzhou municipal government.
Geographical Advantage.
The location of our
planting area affords us numerous advantages, including proximity to China's transportation network of highways,
optimal climate conditions, and excellent soil for cultivating organic oranges. Our planting area is close to the
Beijing-Kowloon railroad, 105 state road, 323 national highway, 319 state road, Kunsha Highway, and Quannan Highway. Using
these roads, Jinggangshan airport is approximately one hour drive while the port cities of Shenzhen, Guangzhou and Xiamen are
all within five hours by car. Our planting area is located in a subtropical monsoon climate, with abundant
rainfall, sunshine and four distinct seasons. The average annual temperature is 18.9C with a low of -3C and relative
humidity of 70-80%. There is an average annual sunshine exposure of 1,992.3 hours and approximately 1,600 mm of annual
rainfall making it very suitable for growing oranges. The soil at our planting area is rich in organic matter with soil pH
levels of 6-6.3 (optimal for orange cultivation). Soil sample tests are conducted by experts to comply with the provisions of
the Chinese government's NY5016-2001 standard.
Top of the Line Sorting Machines
. Our processing
facilities utilize up-to-date and efficient sorting machines purchased from world class manufacturers in this industry, such as
MAF RODA Group and Yantai Sinclair Economic and Trade Co., Ltd. MAF Roda is the world's largest fresh produce procurement, processing,
and packaging equipment manufacturer, leading the world in the development of agricultural products packaging industry and its
products represent the top of the line in the field. Yantai Sinclair Economic and Trade Co., Ltd., is the world's leading provider
of fresh fruits and vegetables labeling systems. All of the world's major fruit producing areas are serviced by Sinclair's systems,
which meet European specifications and regulations regarding fruits and vegetables, the U.S. Food and Drug Administration (FDA),
and the world's leading supermarket chain requirements. Sinclair currently has tens of thousands of devices running worldwide.
Technology Advantage
. Our controlled
atmosphere storage and preservation technology allows us to maintain a storage period of up to 6-8 months, improve orange
appearance and color, and retain a fresh flavor. This is necessary for our oranges to achieve the status of "Gannan
navel orange" that meets the national standard (Standard No. GB/T200355-2006). Our controlled atmosphere storage
equipment is primarily provided by the China Agricultural University, Chinese Academy of Agricultural Sciences, and its
affiliated company, Beijing Furui. Beijing Furui specializes in the research and development of fruit and vegetable storage
and preservation technology, manufacturing of cold atmosphere equipment, and construction of controlled
atmosphere storage projects. Beijing Furui and domestic research institutes have co-developed vacuum decompression
preservation devices, air discharge devices, cold storage central control and measurement systems,
VSA oxygen systems, carbon dioxide removal systems, ethylene suspension systems, and transmission systems.
7
Highly Trained Management and Expert Team
.
We have established a specialized fruit forest management and expert team, who work with the contract farmers to optimize
cultivation, irrigation, fertilization, water and soil conservation, administration of pesticides for weed and pest control
and educate about protection against frost and rain. This team has learned through various lectures taught by a professor of
Huazhong Agricultural University, a member of the Chinese Academy of Engineering, and by other distinguished fruit experts in
China. These lectures were part of an agricultural technology promotional series, provided by the Chinese government for free
in support of the planting of navel oranges in the Southern Jiangxi region. In these seminars and lectures the team was
introduced to certain navel orange varieties in the Southern Jiangxi region of high-yield and high-quality and was taught
standardized production, pollution-free cultivation and other cultivation techniques.
Growth Strategy
We intend to leverage our existing operations  to create a
fully integrated business that grows, preserves and distributes high-quality organic navel oranges and other fruits and vegetables.
Our approach includes:
Developing Planting Areas in Key Sales Regions
. Our fully
integrated business model begins with the planting and growing of fruits and vegetables. To that end, we plan on establishing planting
areas in each of the major fruit producing areas in the PRC.
Establishing Temperature Controlled Warehouses and Distribution
Centers in Key Sales Regions
. We plan to purchase or construct modern, temperature-controlled preservation warehouses
in major fruit and vegetable consumer markets, including the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin region,
and the provincial capital cities. We also plan to build fruit and vegetable distribution centers with cold-storage services.
Establishing Retail Chain Stores
. We plan to build retail chain stores of fruits and vegetables in major cities, leveraging our existing
infrastructure.
Promoting General Red Brand Name
.
We
plan to promote and enhance the "General Red" brand by placing General Red trademark signs and advertisements in member
stores and in the target markets, employing consistent product management system and high standards for product quality, conducting
customer feedback surveys, and bringing added convenience to end-customers.
Competition
To our knowledge, we are the largest integrated navel orange
company with both growing areas and post-harvest processing and preservation facilities. Our competitors are pure navel orange
growers, pure post-harvest processors, or both. The largest competitor in navel orange growing is Jiangxi Wangpin Agricultural
Science and Technology Development Co. Ltd. with 6,880 mu of navel orange groves. The largest competitors in post-harvest processing
and preservation are Anyuan Shengda Fruit Industrial Co. Ltd with 20,000 metric ton of preservation capacity, and Xinfeng Yuhe
Agricultural Development Co. Ltd. with 10,000 metric ton of preservation capacity.
The following table lists our competitors and their profiles, based upon information accessible to us:
8
Company Name
Planting Base (mu)
Sorting Line Capacity
(ton/hour)
Storage Facility
    Capacity
(tons)
Leading Enterprise Qualification
Total Area
(mu)
Area of Organic Planting Base for Navel Orange
Anyuan County Anshengda Fruit Industry Co., Ltd.
5,000
none
40
20000
Province Level
Jiangxi Gannan Fruit Industry Holdings Co., Ltd.
3,250
none
20
none
none
Guangdong Yangshi Nanbei Fresh Fruit Co., Ltd.)
none
none
60
none
City Level
Jiangxi Wangpin Agricultural Science and Technology Development Co., Ltd.
6,880
1,000
80
none
Province Level
Jiangxi Shengwei Fruit Industry Co., Ltd.
none
none
20
6000
none
Jiangxi Shengdi Fruit Industry Development
        Co., Ltd.
3,000
none
none
none
none
Xinfeng County Yuhe Agricultural Development Co., Ltd.
none
none
40
10000
Province Level
Xunwu County Yuanxing Fruit Industry Co.,
        Ltd.
3,000
none
25
5000
Province Level
Huichang County Lvfeng Fruit Industry Co., Ltd.
none
none
15
3000
Province Level
Anyuan County Jinfeng Linong Products Co., Ltd.
none
none
15
none
none
Our competitive advantages are that we are an integrated player
and the largest grower. We control the source of the navel oranges with high quality standards. In addition, our preservation
facility is an air-controlled facility in which we control not only the temperature but also the composition of the air. A nitrogen
rich air environment slows down the oxidation process and prolongs the preservation life of the fruits. Our competitors in orange
preservation space mostly use temperature controlled facility instead of the more advanced air controlled technology.
Suppliers
Approximately 50 percent of our business is the sale and distribution
of oranges supplied by outside parties. We are supplied with what is referred to as "raw navel oranges," which are
oranges prior to post-harvest processing.
Set forth below is a list of our top five raw navel orange
suppliers in 2011:
Supplier
Percentage of
total supply
Xingguo Mengshan Fruits Development Co., Ltd.
13.95
%
Ningdu County Runhua Navel Orange Professional Cooperative
11.79
%
Ningdu County Qingtang Township Xiangyun Fruits Professional Cooperative
11.07
%
Jianhua Wen
8.42
%
Xingguo Changwang Gannan Navel Orange Professional Cooperative
6.30
%
When we initially develop the orange groves, our fruit seedlings
are sourced from seedling cultivation centers. In China, the government places great emphasis on cultivating and managing the seedling
sources for high quality and/or high yield fruits or crops. The seedling cultivation centers are typically the result of the joint
efforts among the agriculture research institutes, and government agency in agriculture technology promotion. We have had continued
support and fruit seedlings from the seedling cultivation centers.
We purchase the fertilizers, other production materials and
tools from the public market. We have not had any problems in sourcing the supplies.
9
Significant Customers
Our products are currently sold through distributors in over
11 provinces of China including Jiangxi, Beijing, Shanghai, Zhejiang, Guangxi, Shandong, Guangdong, Anhui, Helongjiang, Inner Mongolia
and Jiangsu. We currently do not sell directly to consumers or retail markets.
Set forth below is a list of our top five customers for the
year 2011:
Customer
Percentage of
total sales
Zhejiang Green Land Agriculture Development Co., Ltd.
7.96
%
Beijing Yuanheng Xingye Fruits Trading Co. Ltd.
7.14
%
Beijing Green Land Fruits Co. Ltd
7.08
%
Guangfeng Tianyuan Agriculture Development Co. Ltd
5.83
%
Feng Xin
5.67
%
PRC Government Regulation
Agriculture Laws
On July 2, 1993, the Standing
Committee of National People's Congress of the PRC promulgated the Agriculture Law, which sets forth certain principles and various
measures designed to ensure the steady development of the agricultural industry. For example, the production or operation of agricultural
products that affect the health of people or animals, such as seeds, must meet registration and approval requirements of the PRC
laws and regulations. The Agriculture Law regulates the planting, processing, selling, preservation and transportation of agricultural
products. Agricultural Law stipulates that farmers and organizations for production and operation of agriculture products shall
keep good maintenance of their lands, make a rational use of chemical fertilizers and pesticides, increase their application of
organic fertilizers so as to improve soil fertility and prevent the land from pollution, destruction and soil fertility declination.
The Company endeavors to plant orange trees by organic and environmental friendly approaches.
According
to Law of the People's Republic of China on Quality and Safety of Agricultural Products
passed by
Standing
Committee of National People's Congress on April 29, 2006, effective on November 1, 2006,
the
administrative departments for agriculture under the governments at or above the county level shall be responsible for supervision
and control of the quality and safety of agricultural products; and the relevant departments of the people's governments at or
above the county level shall, in compliance with the division of their duties, be responsible for the work related to the quality
and safety of agricultural products. Agricultural production enterprises and specialized cooperative economic organizations of
farmers shall test the quality and safety of their products themselves or entrust the testing to a testing agency. The Company
engaged testing agency to test soil, cultivating water and air for certain planting areas to ensure quality and safety of its products.
According to Law of the People's Republic
of China on Quality and Safety of Agricultural Products, when agricultural products is marketed by agricultural production enterprises,
specialized cooperative economic organizations of farmers, and by units or individuals engaged in the purchase of agricultural
products, then such agriculture products will be required to be packed or labeled in case the packing and labeling is necessary
according to related regulations and shall be marketable only after they are packaged or labeled. The Company believes that it
has packed and labeled its orange products.
10
New Plant Varieties Regulation
The Regulation for the Protection of New Plant Varieties
of was promulgated by the State Council on March 20, 1997 and became effective on October 1, 1997. The
administrative departments of the State Council in charge of agriculture and forestry are, according to their respective
functions, jointly responsible for the acceptance and examination of applications for the rights to new varieties of plants
and the grant of such rights. A person that has completed the production, sale or dissemination of a new variety of plant
which has been granted a variety right will have an exclusive right in its protected variety. Unless otherwise provided in
the regulations, no other person may use such variety for commercial purposes without a license from the owner of the rights
to the variety. The Company does not currently have the exclusive rights of a protected variety to any brand of navel orange.
As its business develops, the Company may file for  protection  of its  own orange variety in the future.
Forest Laws
The PRC Forestry Law passed by the
Standing Committee of the National People's Congress on April 29, 1998 and effective as of July 1, 1998, as well as its implement
promulgated by State Council on January 29, 2000 ("Forest Law"), is enacted to protect, cultivate and reasonably use
of forest resources. It governs the afforestation, cultivation, felling, utilization, management and administration of forests
within the PRC territory. PRC Forestry Law divided the forests into the following five categories: (1) Protection forests: forests,
trees and bushes mainly aimed at protection, inclusive of water source storage forests, forests for water and soil conservation,
wind protection and sand bind forests, forests for farmland and grassland protection, river bank protective belts and road protection
belts; (2) Timber stands: forests and trees mainly at timber production, inclusive of bamboo groves mainly aimed at bamboo production;
(3) Economic forests: trees mainly aimed at the production of fruits; edible oils, soft drinks and ingredients; industrial raw
materials; and medicinal materials; 4) Firewood forests: trees mainly aimed at the production of fuels; 5) Forests for special
uses: forests and trees mainly aimed at national defense, environmental protection and scientific experiments, inclusive of national
defense forests, experimental forests, parent stands, environmental protection forests, scenic beauty forests, trees for sites
of historical interests and the forests of natural protection areas. Forest Law prohibits land reclamation at the expense of deforestation,
rock quarrying, sand quarrying, soil extracting and other activities at the expense of deforestation. The Company endeavors to
protect its orange trees.
PRC Quarantine Law on the Import
and Export of Plants and relevant rules and regulations
The PRC Quarantine Inspection Law on
the Import and Export of Plants passed by the Standing Committee of the National People's Congress on October 30, 1991, and
effective as of April 1, 1992, is aimed at preventing diseases, insect pests and harmful organisms from spreading into or out of
the country, protecting the production of agriculture, forestry, animal husbandry and fishery as well as human health, and promoting
the development of foreign economic relations and trade. The implement rule of PRC Quarantine Inspection Law on the Import and
Export of Plants was promulgated by State Council on December 2, 1996 and effective as of January 1, 1997. Administration Rule of
Quarantine Inspection of Exporting Fruits was promulgated by General Administration of Quality Supervision, Inspection and Quarantine
of PRC ("AQSIQ") on December 25, 2006 and effective on February 1, 2007.
Pursuant to PRC Quarantine
Inspection Law on the Import and Export of Plants and its implementing regulations, (i) the Ministry of Agriculture shall be responsible
for the import and export quarantine of animal and plant; and (ii) enterprises importing plant seeds, seedlings or other
propagating materials must submit an application in advance and go through the formalities of quarantine inspection. In
addition, according to Administration Rule of Quarantine Inspection of Exporting Fruits, the fruits may export after the pass
of quarantine inspection.
We will organize a quarantine inspection
according to related laws for the oranges for exporting.
11
Foreign Currency Exchange
Pursuant to the Foreign Currency Administration
Rules promulgated on January 29, 1996 and amended on August 1, 2008, as well as various regulations issued by State Administration
of Foreign Exchange ("SAFE") and other relevant PRC government authorities, the RMB is freely convertible into a foreign
currency for current account items, including trade-related receipts and payments, interest and dividends, but not for capital
account items, such as direct equity investments, loans and repatriation of investment, unless prior approval from SAFE or a local
branch has been obtained. Transactions that occur within the PRC must be settled in RMB. Unless otherwise approved, PRC companies
must repatriate foreign currency payments received from abroad and domestic enterprises must convert all of their foreign currency
receipts into RMB. Foreign-invested enterprises may retain foreign exchange in accounts with designated foreign exchange banks
subject to a cap set by SAFE or its local branch.
Intellectual Property
The PRC Trademark Law, adopted on August 23, 1982 and revised
on October 27, 2001, protects the proprietary rights of registered trademarks. The State Administration for Industry and Commerce's
Trademark Office handles trademark registrations and grants an initial term of rights of ten years to registered trademarks. Upon
the initial term's expiration, a second term of ten years may be granted under a renewal. Trademark license agreements must
be filed with the Trademark Office or a regional office. In addition, if a registered trademark is recognized as a well-known trademark
in a specific case, the proprietary right of the trademark holder may be extended beyond the registered sphere of products and
services to which the trademark relates.
We own and utilize the trademarks and domain name listed below.
We continuously look to increase the number of our trademarks where necessary to protect valuable intellectual property. We regard
our trademarks and other intellectual property as valuable assets and believe that they have significant value in the marketing
of our products. We vigorously protect our trademarks against infringement, including through the use of cease and desist letters,
administrative proceedings and lawsuits.
We rely on trademark, and trade secret protection, non-disclosure
agreements and licensing arrangements to establish, protect and enforce intellectual property rights in our logos, trade names
and in the marketing of our products. In particular, we believe that our future success will largely depend on our ability to maintain
and protect the "General Red" trademark. Despite our efforts to safeguard and maintain our intellectual property rights,
we cannot be certain that we will be successful in this regard. Furthermore, we cannot be certain that our trademarks, products
and promotional materials or other intellectual property rights do not or will not violate the intellectual property rights of
others, that our intellectual property would be upheld if challenged or that we would, in such an event, not be prevented from
using our trademarks or other intellectual property rights. Such claims, if proven, could materially and adversely affect our business,
financial condition and results of operations. In addition, although any such claims may ultimately prove to be without merit,
the necessary management attention to, and legal costs associated with, litigation or other resolution of future claims concerning
trademarks and other intellectual property rights could materially and adversely affect our business, financial condition and results
of operations.
The laws of certain foreign countries do not protect intellectual
property rights to the same extent or in the same manner as do the laws of the PRC. Although we continue to implement protective
measures and intend to defend our intellectual property rights vigorously, these efforts may not be successful or the costs associated
with protecting our rights in certain jurisdictions may be prohibitive. From time to time we may discover products in the marketplace
that are counterfeit reproductions of our products or that otherwise infringe upon intellectual property rights held by us. Actions
taken by us to establish and protect our trademarks and other intellectual property rights may not be adequate to prevent imitation
of our products by others or to prevent others from seeking to block sales of our products as violating trademarks and intellectual
property rights. If we are unsuccessful in challenging a third party's products on the basis of infringement of our intellectual
property rights, continued sales of such products by that or any other third party could adversely impact the "General Red"
brand, result in the shift of consumer preferences away from our products and generally have a material adverse effect on our business,
financial condition and results of operations.
12
Trademarks
Through General Fruit and General Preservation, we are licensed
to use the following trademarks registered with the Trademark Office, State Administration for Industry and Commerce in the PRC:
We plan to file for an extension with the appropriate trademark
offices before expiration of the trademarks listed above.
Legal Proceedings
We are not currently a party to any material legal or administrative
proceedings and are not aware of any pending legal or administrative proceedings against us. We may from time to time become a
party to various legal or administrative proceedings arising in the ordinary course of our business.
Property
There is no
private ownership of land in China. Land is usually owned by the state and the government grants land use rights for
specified terms. General Preservation has obtained the following Land Use Right Certificates and Property Right Certificates
which show our entitlement to the land and buildings used by the Company:
13
No.
Certificate Number
Area (sq m)
Purpose
Property Location
Expiration Date
1
Property Right Certificate
(Xingfangquanzheng Gaoxing
        Zi No. LJGF2049)
1,688
Dormitory
Mengshan Village, Gaoxing Town, Xingguo County
November 1, 2055
2
Property Right Certificate
(Xingfangquanzheng Gaoxing
        Zi No. LJGF2050)
11,131
Workshop
Mengshan Village, Gaoxing Town, Xingguo County
November 1, 2055
3
Property Right Certificate
(Xingfangquanzheng Gaoxing
        Zi No. LJGF2051)
418
Electricity Supply Room
Mengshan Village, Gaoxing Town, Xingguo County
November 1, 2055
4
Property Right Certificate
(Xingfangquanzheng Gaoxing
        Zi No. LJGF2052)
2,241
Office Building
Mengshan Village, Gaoxing Town, Xingguo County
November 1, 2055
5
State-owned Land Use Right
        Certificate
(Xingguoyong 2005 No. 2B2905-051)
39,171
Industry
Mengshan Village, Gaoxing Town, Xingguo County
November 1, 2055
6.
Lease from Xu, Shiyong
100
Office Space
128 Pingchuan Blvd., Xingguo County
February 28, 2014
7
Lease from Wang, Taixiang
300
Office Space
77 Pingchuan Blvd., Xingguo County
January 31, 2017
Employees
Currently, we have 252 employees and temporary staff. Set forth
below is a breakdown of our employees by category:
Category
Number of employees
Administrative and finance
31
Sales and marketing
10
Technician
4
Workers
207
Our PRC operating companies, General Fruit and
General Preservation, have labor contracts with 53 employees, some of whom are part-time employees. We also hire
approximately 199 temporary staff for seasonal work. We do not pay social insurance for part-time employees. We are
currently in the process of completing governmental procedures for payment of social insurance for approximately 26
employees. We paid pension or medical insurance of farmers for approximately 21 employees.
Corporation Information
Our principal executive offices are located at Room 2903, Unit
B, Jianwai SOHO East District, 39 East Third Ring Road Central, Chaoyang District, Beijing City, China. Our telephone number
is +86-10-5869-4611.
14
Risk Factors
Risks Related to Our Business
We have a relatively short operating history and are
subject to the risks of a new enterprise, any one of which could limit growth, or market development.
Our short operating history
makes it difficult to predict how our businesses will develop. Accordingly, we face all of the risks and uncertainties encountered
by early-stage companies, such as:
•
uncertain growth
in the market for our products; and
•
competition or evolving
customer preferences that could harm sales of our products.
If we are not able to meet the challenge of
building our business, our growth may be slowed, which could result in lower margins, additional operational costs and lower income.
Because we face significant competition, we could lose
market share and may need to respond by lowering our prices, which could materially and adversely affect our results of operations.
The agricultural citrus business
in China is highly fragmented and competitive, and we expect competition in this sector to persist and intensify. We face competition
in each geographic market in which we operate. While we are trying to enter into agreements with additional farmers, we face competition
from other producers and may not succeed in our efforts.
We have agreements with a limited number of farmers
to grow and supply us with oranges. Any disruption in supply, breach of our agreements, or failure to deliver products, could adversely
impact our distribution capabilities or increase our costs, which could harm our reputation or materially and adversely affect
our business, results of operations and financial condition.
We purchase our products from
farmers with whom we enter into seasonal contracts. The failure of our farmers to supply oranges that satisfy our quality, quantity
and cost requirements, the decision by farmers not to re-enter into contracts with us, or a breach of the contracts, could have
an adverse effect on our ability to maintain our distribution network. If we fail to maintain our relationships with these farmers
or fail to develop new relationships with other farmers, our business, results of operations and financial condition would be materially
adversely impacted.
We derive most of our sales from the PRC.
Most of our sales are generated from the PRC. Although we
have explored the exportation of oranges outside of the PRC, at this time we anticipate that sales of our oranges in the PRC
will continue to represent a substantial proportion of our total sales in the near future. Any significant decline in the
condition of the PRC economy could adversely affect consumer demand of our products, among other things, which in turn would
have a material adverse effect on our business and financial condition.
If our land use rights are revoked, we would have no
operational capabilities or ability to conduct our business.
15
Under Chinese law, land
is owned by state or rural collective economic organizations. The state issues tenants the rights to use property. Rights to use
property can be revoked and tenants can be forced to vacate at any time when redevelopment of the land is in the public interest.
The public interest rationale is interpreted broadly and the process of land appropriation may be less than transparent. Since
production of oranges is dependent on having land to grow, we rely on these land use rights as the cornerstone of our operations,
and the loss of such rights would have a detrimental effect on our business.
Weather and other environmental factors may affect our
harvesting season, and a reduction in the quality or quantity of our orange supplies may have a detrimental effect on our revenues.
Our business may be adversely affected by weather and environmental
factors beyond our control, such as adverse weather conditions during the growing season. We have no control over such forces of
nature. A significant reduction in the quantity or quality of oranges harvested resulting from adverse weather conditions, disease
to the crops or other factors could result in increased per unit processing costs and decreased production, with adverse financial
consequences to us.
Concerns over food safety and public health may affect
our operations by increasing our costs and negatively impacting demand for our products.
We could be adversely affected by diminishing confidence in
the safety and quality of certain food products or ingredients, even if our practices and procedures are not implicated. As a result,
we may also elect or be required to incur additional costs aimed at increasing consumer confidence in the safety of our products.
For example, a crisis in China over melamine-contaminated milk in 2008 adversely impacted overall Chinese food exports since October
2008, as reported by the Chinese General Administration of Customs, even though most foods exported from China were not implicated
by the melamine-contaminated milk. Our success depends on our ability to maintain the quality of our products. Product quality
issues, real or imagined, or allegations of product contamination, even if false or unfounded, could tarnish our image and may
cause consumers to choose other products.
We have limited insurance coverage.
The insurance industry in China is still at an early stage of
development. Insurance companies in China offer limited insurance products and the cost of such insurance is high. We have determined
that the risks of disruption or liability from our business, the loss or damage to our property, including our facilities, equipment
and office furniture, the cost of insuring for these risks, and the difficulties associated with acquiring such insurance on commercially
reasonable terms make it impractical for us purchase. As a result, we only carry insurance on some company owned vehicles. Any
uninsured occurrence of loss or damage to property, or litigation or business disruption may result in the incurrence of substantial
costs and the diversion of resources, which could have an adverse effect on our operating results.
We may be subject to product quality or liability claims,
which may cause us to incur litigation expenses and to devote significant management time to defending such claims and, if determined
adversely to us, could require us to pay significant damage awards.
Unlike the United States and many other countries, product liability
claims and lawsuits in the PRC are rare. Furthermore, we cannot guaranty that product liability exposures and litigation will not
become more commonplace in the PRC or that we will not face product liability exposure or actual liability as we expand our sales
into international markets, like the United States, where product liability claims are more prevalent. In addition to the genetic
traits and the quality of our products, the performance marketability of our fruits depends on climate, geographical areas, cultivation
method, farmers' degree of knowledge and other factors. At the same time, the viability of some farmland in China has deteriorated
due to toxic and hazardous materials from farmers' overuse of herbicides. These factors are beyond our control and can result
in sub-optimal production yields. However, farmers generally attribute sub-optimal production yields to poor seed quality. We may
be required from time to time to recall products. Product recalls could adversely affect our profitability and our brand image.
16
We may be subject to legal proceedings and claims from time
to time relating to our seed quality. The defense of these proceedings and claims could be both costly and time-consuming and significantly
divert the efforts and resources of our management personnel. An adverse determination in any such proceedings could subject us
to significant liability. In addition, any such proceeding, even if ultimately determined in our favor, could damage our market
reputation and prevent us from maintaining or increasing sales and market share. Protracted litigation could also result in our
customers or potential customers deferring or limiting their purchase of our products.
While we have not experienced any credible product liability
litigation to date, there is no guarantee that we will not experience such litigation in the future. In the event we do experience
product liability claims or a product recall, our financial condition and business operations could be materially adversely affected.
We may experience major accidents in the course of our
operations, which may cause significant property damage and personal injury.
We may experience major accidents in the course of our operations,
which may cause significant property damage and personal injuries. Significant industry-related accidents and natural disasters
may cause interruptions to various parts of our operations, or could result in property or environmental damage, increase in operating
expenses or loss of revenue. The occurrence of such accidents and the resulting consequences may not be covered adequately, or
at all, by the insurance policies we carry. In accordance with customary practice in China, we do not carry any business interruption
insurance or third party liability insurance for personal injury or environmental damage arising from accidents on our property
or relating to our operations other than our automobiles. Losses or payments incurred may have a material adverse effect on our
operating performance if such losses or payments are not fully insured.
Risks Related to Our Corporate Governance and Controls
We do not have a majority of independent directors serving
on our board of directors, which could present the potential for conflicts of interest.
We do not have a majority
of independent directors serving on our board of directors. In the absence of a majority of independent directors, our executive
officers could establish policies and enter into transactions without independent review and approval. This could present the potential
for a conflict of interest between us and our stockholders, generally, and the directors, management and controlling shareholder.
If we are unable to establish appropriate internal financial
reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our
financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence
in our reported financial information and have a negative effect on the market price for shares of our Common Stock.
Effective internal controls
are necessary for us to provide reliable financial reports and effectively prevent fraud. As a public company, we have significant
additional requirements for enhanced financial reporting and internal controls. However, as a result of the Share Exchange, we
have a newly acquired business, which may not have been subject to the same control systems as public company must maintain. We
will be required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial
reporting and a report by our independent registered public accounting firm addressing these assessments. The process of designing
and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our
business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls
that is adequate to satisfy our reporting obligations as a public company. We expect that there will be a period of transition
as we begin to integrate our new business and implement internal controls over financial reporting and disclosure controls and
procedures necessary for a public company's business.
17
We cannot assure you that
we will not, in the future, identify areas requiring improvement in our internal control over financial reporting, and disclosure
controls and procedures. We cannot assure you that the measures we will take to remediate any areas in need of improvement will
be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future
as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could
cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results,
subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have
a negative effect on the market price for shares of our Common Stock.
Lack of US GAAP experience by our finance and accounting
team could result in our financial statements not being prepared properly.
Currently, we do not
have anyone in our finance and accounting team with requisite U.S. GAAP experience or training, which could result in our financial
statements not being prepared properly. We may need to hire additional financial reporting, internal controls and other finance
staff or consultants in order to assist with our financial statement preparations and to develop and implement appropriate internal
controls and reporting procedures. If we are unable to comply with the Sarbanes-Oxley Act's internal controls requirements,
we may not be able to obtain the independent auditor certifications that Sarbanes-Oxley Act requires publicly-traded companies
to obtain, further the failure to have such qualified employees may be a material weakness in our internal controls over financial
reporting.
We will incur increased costs as a result of acquiring
a new operating business in the Share Exchange.
As a result of the Share Exchange,
we now have an active operating business. We anticipate that we will incur significant legal, accounting and other expenses that
we did not incur as a prior shell company. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the
SEC, has required changes in corporate governance practices of public companies. We expect these rules and regulations to increase
our legal, accounting and financial compliance costs and to make certain corporate activities more time-consuming and costly. In
addition, we will incur additional costs associated with our public company reporting requirements. We are currently evaluating
and monitoring developments with respect to these new rules, and we cannot predict or estimate the amount of additional costs we
may incur or the timing of such costs.
Risks Relating to Regulation of our Business
Restrictions on currency exchange
may limit our ability to utilize our revenues effectively.
18
The PRC government imposes controls
on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive
all of our revenues in RMB. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries
to remit sufficient foreign currency to pay dividends or other payments to the US parent company, or other subsidiaries outside
of the PRC, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations,
payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions,
can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However,
approval from appropriate government authorities is required where RMB is converted into foreign currency and remitted out of China
to pay capital expenses such as the repayment of bank loans denominated in foreign currencies. If the foreign exchange control
system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends
in foreign currencies to our shareholders
Under the PRC Enterprise Income Tax Law, we may be classified
as a "resident enterprise" of China, and such classification would likely result in unfavorable tax consequences to
us and our non-PRC stockholders.
On March 16, 2007, the National
People's Congress or the NPC, approved and promulgated the PRC Enterprise Income Tax Law, which we refer to as the New EIT
Law. The New EIT Law took effect on January 1, 2008. Under the New EIT Law, Foreign Investment Enterprises (FIEs) and domestic
companies are subject to a uniform tax rate of 25%. The New EIT Law provides a five-year transition period starting from its effective
date for those enterprises which were established before the promulgation date of the New EIT Law and which were entitled to a
preferential lower tax rate under the then-effective tax laws or regulations.
On December 26, 2007, the
State Council issued a Notice on Implementing Transitional Measures for Enterprise Income Tax, or the Notice, providing that the
enterprises that have been approved to enjoy a low tax rate prior to the promulgation of the New EIT Law will be eligible for a
five-year transition period since January 1, 2008, during which time the tax rate will be increased step by step to the 25% unified
tax rate set out in the New EIT Law. From January 1, 2008, for the enterprises whose applicable tax rate was 15% before the promulgation
of the New EIT Law , the tax rate will be increased to 18% for year 2008, 20% for year 2009, 22% for year 2010, 24% for year 2011,
25% for year 2012. For the enterprises whose applicable tax rate was 24%, the tax rate will be changed to 25% from January 1, 2008.
Under the New EIT Law, an
enterprise established outside of China with "de facto management bodies" within China is considered a "resident
enterprise," meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes.
The implementing rules of the New EIT Law define de facto management as "substantial and overall management and control over
the production and operations, personnel, accounting, and properties" of the enterprise. Because the New EIT Law and its
implementing rules are new, no official interpretation or application of this new "resident enterprise" classification
is available. Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.
If the PRC tax authorities
determine that we are "resident enterprises" for PRC enterprise income tax purposes, a number of unfavorable PRC tax
consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income
as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as interest on offering
proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the
New EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify as "tax-exempt income,"
we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities,
which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities
that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that "resident enterprise"
classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC stockholders
and with respect to gains derived by our non-PRC stockholders from transferring our shares.
19
Dividends we received from General Fruit may be subject
to PRC withholding tax.
The New EIT Law provides
that an income tax rate of 20% may be applicable to dividends payable to non-PRC investors that are "non-resident enterprises"
and that do not have an establishment or place of business in the PRC, or which have such establishment or place of business in
the PRC but
the relevant income is not effectively connected with the establishment or
place of business, to the extent such dividends are derived from sources within the PRC. The income tax for non-resident enterprises
shall be subject to withholding at the income source, with the payer acting as the obligatory withholder under the New EIT Law,
and therefore such income taxes are generally called withholding tax in practice. The State Council of the PRC has reduced the
withholding tax rate from 20% to 10% through the Implementation Rules of the New EIT Law. It is currently unclear in what circumstances
a source will be considered as located within the PRC. We are an offshore holding company. Thus, if we are considered as a "non-resident
enterprise" under the New EIT Law and the dividends paid to us by our subsidiary in the PRC are considered income sourced
within the PRC, such dividends may be subject to a 10% withholding tax.
The new tax law provides only
a framework of the enterprise tax provisions, leaving many details on the definitions of numerous terms as well as the interpretation
and specific applications of various provisions unclear and unspecified. Any increase in our combined company's tax rate
in the future could have a material adverse effect on our financial conditions and results of operations.
Under PRC laws, General Fruit
and General Preservation, are obligated to withhold and pay individual income tax on behalf of our employees who are subject to
PRC individual income tax. If the PRC Subsidiary fails to withhold and/or pay such individual income tax in accordance with PRC
laws, it may be subject to certain sanctions and other penalties and may become subject to liability under PRC laws.
In addition, the State Administration
of Taxation has issued several circulars concerning employee stock options. Under these circulars, our employees working in the
PRC (which could include both PRC employees and expatriate employees subject to PRC individual income tax) who exercise stock options
will be subject to PRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee stock
options with relevant tax authorities and withhold and pay individual income taxes for those employees who exercise their stock
options. While tax authorities may advise us that our policy is compliant, they may change their policy, and we could be subject
to sanctions.
We must comply with the Foreign Corrupt Practices Act.
We are required to comply
with the United States Foreign Corrupt Practices Act, which prohibits U.S. companies from engaging in bribery or other prohibited
payments to foreign officials for the purpose of obtaining or retaining business. Foreign companies, including some of our competitors,
are not subject to these prohibitions. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from
time-to-time in mainland China. If our competitors engage in these practices, they may receive preferential treatment from personnel
of some companies, giving our competitors an advantage in securing business or from government officials who might give them priority
in obtaining new licenses, which would put us at a disadvantage. Although we inform our personnel that such practices are illegal,
we cannot assure you 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.
Risks Related to our Securities
20
Because we became a public company
by means of a reverse merger, we may not be able to attract the attention of major brokerage firms.
Additional risks may exist since we
became public through a "reverse merger." Securities analysts of major brokerage firms may not provide coverage of
our securities since there is little incentive to brokerage firms to recommend the purchase of our Common Stock. No assurance can
be given that brokerage firms will want to conduct any secondary offerings on our behalf in the future.
If we become directly subject
to the recent scrutiny involving U.S. Chinese companies, we may have to expend significant resources to investigate and/or defend
the matter, which could harm our business operations, stock price and reputation.
Recently, many U.S. reverse merger
public companies that have substantially all of their operations in China have been the subject of intense scrutiny by investors,
financial commentators and regulatory agencies. Much of the scrutiny has centered around financial and accounting irregularities
and mistakes, a lack of effective internal controls over financial reporting and, in many cases, allegations of fraud. As a result
of the scrutiny, the publicly traded stock of many U.S. listed China-based companies that have been the subject of such scrutiny
has sharply decreased in value. Many of these companies are now subject to shareholder lawsuits and/or SEC enforcement actions
that are conducting internal and/or external investigations into the allegations. If we become the subject of any such scrutiny,
whether any allegations are true or not, we may have to expend significant resources to investigate such allegations and/or defend
our company. Such investigations or allegations will be costly and time-consuming and distract our management from our business
plan and could result in our reputation being harmed and our stock price could decline as a result of such allegations, regardless
of the truthfulness of the allegations.
GRH has
a number of Chinese minority shareholders.
GRH, our public parent company, has a number
of Chinese minority shareholders who, along with other U.S. persons, were the initial shareholders of GRH. Such Chinese minority
shareholders also held shares of General Red International, Inc., a Texas corporation which sold its operating company, Sheng Da
Holdings Limited, a British Virgin Islands company, to GRH. General Red International, Inc. is currently in the process of dissolving.
These Chinese minority
shareholders mainly obtained their shares of General Red International, Inc. from its owners, Mr. Qingsong Luo and Mr. Baojun
Xin
g,
who had provided  marketing and consulting services to one of our PRC operating
companies, General Fruit, in exchange for the shares of General Red International, Inc.
Insiders have substantial control
over us, and they could delay or prevent a change in our corporate control even if our other stockholders wanted it to occur.
Our executive officers, directors, and
principal shareholders hold approximately 76.43% of our outstanding Common Stock. Accordingly, these shareholders are able to control
all matters requiring shareholders approval, including the election of directors and approval of significant corporate transactions.
This could delay or prevent an outside party from acquiring or merging with us even if our other shareholders wanted it to occur.
We cannot assure you that the Common
Stock will become liquid or that it will be listed on a securities exchange.
21
In addition, if we fail to meet the criteria
set forth in SEC regulations, by law, various requirements would be imposed on broker-dealers who sell its securities to persons
other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending
or selling the Common Stock, which may further affect its liquidity.
There may not be sufficient liquidity
in the market for our securities in order for investors to sell their securities.
Currently, we are eligible to be quoted
on the OTC Bulletin Board, where an investor may find it difficult to obtain accurate quotations as to the market value of the
Common Stock. There is only a limited public market that currently exists for our Common Stock and there can be no assurance that
a trading market will develop further or be maintained in the future.
The market price of our Common Stock
may be volatile.
The market price of our Common Stock will
likely be highly volatile, as is the stock market in general, and the market for OTC Bulletin Board quoted stocks in particular.
Some of the factors that may materially affect the market price of our Common Stock are beyond our control, such as changes in
financial estimates by industry and securities analysts, conditions or trends in the industry in which we operate or sales of our
Common Stock and overall general public sentiment toward U.S.reverse merger public companies that have substantially all of their
operations in China. These factors may materially and adversely affect the market price of our Common Stock, regardless of our
performance. In addition, the public stock markets have experienced extreme price and trading volume volatility. This volatility
has significantly affected the market prices of securities of many companies for reasons frequently unrelated to the operating
performance of the specific companies. These broad market fluctuations may adversely affect the market price of our Common Stock.
We have not paid dividends in the
past and do not expect to pay dividends in the future, and any return on investment may be limited to the value of our stock.
We have never paid
any cash dividends on our Common Stock and do not anticipate paying any cash dividends on our Common Stock in the foreseeable future
and any return on investment may be limited to the value of our Common Stock. We plan to retain any future earning to finance growth.
Risks Associated With Doing Business In China
Because Chinese laws will govern almost all of our business'
material agreements, we may not be able to enforce our rights within the PRC or elsewhere, which could result in a significant
loss of business, business opportunities or capital.
We have entered into
numerous contracts governed by PRC law, many of which are material to our business. As compared with contracts in the United States,
contracts governed by PRC law tend to contain less detail and are not as comprehensive in defining contracting parties' rights
and obligations. As a result, contracts in China are more vulnerable to disputes and legal challenges.
The
Chinese legal system is similar to a civil law system based on written statutes. Unlike common law systems, it is a system in which
decided legal cases have little precedential value. Although legislation in the PRC over the past 25 years has significantly improved
the protection afforded to various forms of foreign investment and contractual arrangements in the PRC, these laws, regulations
and legal requirements are relatively new. Due to the limited volume of published judicial decisions, their non-binding nature,
the short history since their enactments, the discrete understanding of the judges or government agencies of the same legal provision,
inconsistent professional abilities of the judicators, and the inclination to protect local interest in the court rooms, interpretation
and enforcement of PRC laws and regulations involve uncertainties, which could limit the legal protection available to us, and
foreign investors. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant
loss of business, business opportunities or capital and could have a material adverse impact on our business, prospects, financial
condition, and results of operations. In addition, the PRC legal system is based in part on government policies and internal rules
(some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not be aware
of our violation of these policies and rules until sometime after the violation. In addition, any litigation in the PRC, regardless
of outcome, may be protracted and result in substantial costs and diversion of resources and management attention.
22
Our operations and assets in China are subject to significant
political and economic uncertainties.
Changes in PRC laws and regulations,
or their interpretation, or the imposition of confiscatory taxation, restrictions on currency conversion, imports and sources of
supply, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material adverse
effect on our business, results of operations and financial condition. Under its current leadership, the Chinese government has
been pursuing economic reform policies that encourage private economic activity and greater economic decentralization. There is
no assurance, however, that the Chinese government will continue to pursue these policies, or that it will not significantly alter
these policies from time to time without notice.
Currency fluctuations and restrictions on currency exchange
may adversely affect our business, including limiting our ability to convert Chinese Renminbi into foreign currencies and, if Chinese
Renminbi were to decline in value, reducing our revenue in U.S. dollar terms.
Our reporting currency is
the U.S. dollar and our operations in China use their local currency as their functional currencies. Substantially all of our revenue
and expenses are in Chinese Renminbi. We are subject to the effects of exchange rate fluctuations with respect to any of these
currencies. For example, the value of the Renminbi depends to a large extent on Chinese government policies and China's domestic
and international economic and political developments, as well as supply and demand in the local market. Since 1994, the official
exchange rate for the conversion of Renminbi to the U.S. dollar had generally been stable and the Renminbi had appreciated slightly
against the U.S. dollar. However, on July 21, 2005, the Chinese government changed its policy of pegging the value of Chinese Renminbi
to the U.S. dollar. Under the new policy, Chinese Renminbi may fluctuate within a narrow and managed band against a basket of certain
foreign currencies. As a result of this policy change, Chinese Renminbi appreciated approximately 0.09% against the U.S. dollar
in 2009 and 3.35% in 2008. It is possible that the Chinese government could adopt a more flexible currency policy, which could
result in more significant fluctuation of Chinese Renminbi against the U.S. dollar. We can offer no assurance that Chinese Renminbi
will be stable against the U.S. dollar or any other foreign currency.
The income statements of our
operations are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar
strengthens against foreign currencies, the translation of these foreign currencies denominated transactions results in reduced
revenue, operating expenses and net income for our international operations. Similarly, to the extent the U.S. dollar weakens against
foreign currencies, the translation of these foreign currency denominated transactions results in increased revenue, operating
expenses and net income for our international operations. We are also exposed to foreign exchange rate fluctuations as we convert
the financial statements of our foreign subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency
exchange rates, the conversion of the foreign subsidiaries' financial statements into U.S. dollars will lead to a translation
gain or loss which is recorded as a component of other comprehensive income. In addition, we have certain assets and liabilities
that are denominated in currencies other than the relevant entity's functional currency. Changes in the functional currency
value of these assets and liabilities create fluctuations that will lead to a transaction gain or loss. We have not entered into
agreements or purchased instruments to hedge our exchange rate risks, although we may do so in the future. The availability and
effectiveness of any hedging transaction may be limited and we may not be able to successfully hedge our exchange rate risks.
23
Although Chinese governmental
policies were introduced in 1996 to allow the convertibility of Chinese Renminbi into foreign currency for current account items,
conversion of Chinese Renminbi into foreign exchange for capital items, such as foreign direct investment, loans or securities,
requires the approval of the State Administration of Foreign Exchange, or SAFE, which is under the authority of the People's
Bank of China. These approvals, however, do not guarantee the availability of foreign currency conversion. We cannot be sure that
we will be able to obtain all required conversion approvals for our operations or that Chinese regulatory authorities will not
impose greater restrictions on the convertibility of Chinese Renminbi in the future. Because a significant amount of our future
revenue may be in the form of Chinese Renminbi, our inability to obtain the requisite approvals or any future restrictions on currency
exchanges could limit our ability to utilize revenue generated in Chinese Renminbi to fund our business activities outside of China,
or to repay foreign currency obligations, including our debt obligations, which would have a material adverse effect on our financial
condition and results of operations
The Chinese government exerts substantial influence
over the manner in which we must conduct our business activities.
China only recently has permitted
provincial and local economic autonomy and private economic activities, and, as a result, we are dependent on our relationship
with the local government in the province in which we operate our business. Chinese government has exercised and continues to exercise
substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate
in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations,
land use rights, property and other matters. We believe that our operations in China are in material compliance with all applicable
legal and regulatory requirements. However, the central or local governments of these jurisdictions may impose new, stricter regulations
or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance
with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue
to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation
of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could
require us to divest ourselves of any interest we then hold in Chinese properties.
Future inflation in China may inhibit our activity to
conduct business in China.
In recent years, the Chinese
economy has experienced periods of rapid expansion and high rates of inflation. These factors have led to the adoption by Chinese
government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth
and contain inflation. High inflation may in the future cause Chinese government to impose controls on credit and/or prices, or
to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.
You may experience difficulties in effecting service
of legal process, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws
against us and our management.
24
We conduct substantially all
of our operations in China and substantially all of our assets are located in China. In addition, all of our directors and executive
officers reside within China. As a result, it may not be possible to effect service of process within the United States or elsewhere
outside China upon our directors and senior executive officers, including with respect to matters arising under U.S. federal securities
laws or applicable state securities laws. It would also be difficult for investors to bring an original lawsuit against us or our
directors or executive officers before a Chinese court based on U.S. federal securities laws or otherwise. Moreover, China does
not have treaties with the United States or many other countries providing for the reciprocal recognition and enforcement of judgment
of courts.
25
Management's Discussion and
Analysis of Financial Condition
and Results of Operations
The following discussion of the financial condition and results
of operation of General Red for the fiscal years ended December 31, 2011 and 2010 and for the three months ended March 31,
2012 and 2011 should be read in conjunction with the selected consolidated financial data, the financial statements and the notes
to those statements that are included elsewhere in this Current Report on Form 8-K ("Form 8-K"). Our discussion includes
forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives,
expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking
statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking
Statements and Business sections in this Form 8-K. We use words such as "anticipate," "estimate," "plan,"
"project," "continuing," "ongoing," "expect," "believe," "intend,"
"may," "will," "should,"
"
could
,
"
and similar expressions to identify forward-looking statements.
COMPANY OVERVIEW
General Red Holding, Inc. ("GRH") was established
under the laws of the State of Delaware on January 18, 2011. The accompanying consolidated financial statements include the
financial statements of GRH and its subsidiaries (collectively, the "Company"). The Company is primarily engaged in
growing, preserving and marketing navel oranges.
On September 30, 2011, GRH entered into a Share Transfer
and Issuance Agreement (the "Agreement") with Han Glory International Investment Limited ("Han Glory International"),
a company incorporated on April 28, 2011 under the laws of British Virgin Islands and Hua Mei Investments Limited ("Hua
Mei"), a company incorporated on April 26, 2011 under the laws of the British Virgin Islands. Pursuant to the terms
of the Agreement, GRH issued 74,814,862 shares to Hua Mei, the sole stockholder of Han Glory International, in exchange for all
of the shares and beneficial interest of Han Glory International. This transaction is treated as a reverse merger, and therefore,
after the share exchange, Han Glory International became the wholly owned subsidiary of GRH.
On May 18, 2011, Han Glory International purchased all
of the shares of Greater China International Investment Limited ("Greater China International"), a company incorporated
on December 4, 2009 under the laws of Hong Kong, from Zhihao Zhang, the sole stockholder of Greater China International, for
$1,290 (HK$10,000). As a result, Greater China International became a wholly owned subsidiary of Han Glory International.
On January 13, 2010, Greater China International formed
Nanchang Hanxin Agriculture Technology Co., Ltd. ("WFOE") in the city of Nanchang, Jiangxi Province, the PRC.
On February 5, 2010, WFOE purchased all of the shares of
Xingguo General Fruit Industry Development Co., Ltd. ("General Fruit") from Jiangjun Hong Group Co., Ltd., Xingping
Hou and Jiefeng Ren for an aggregate purchase price of $293,400. As a result, WFOE acquired a 100% equity interest in General Fruit.
This transaction was a capital transaction in substance. That is, the transaction was a reverse recapitalization, equivalent to
the issuance of stock by General Fruit for the net monetary assets of WFOE accompanied by a recapitalization.
26
General Fruit was formed in Xingguo County, Jiangxi
Province, under the corporate laws of the PRC on March 5, 2003. The primary business of General Fruits is to grow and
sell navel oranges. On July 14, 2008, pursuant to a series of equity transfer agreements, General Fruit acquired a 90%
equity interest in Xingguo General Red Navel Orange Preservation Company, Ltd. ("General Preservation"). On July 25, 2010,
General Fruits purchased the remaining 10% equity interest in General Preservation from Xingping Hou, the minority stockholder, for
$295,000 (RMB 2,000,000) and, as a result, now owns 100% of General Preservation.
General Preservation, a citrus fruits company primarily engaged in preserving,
packaging and marketing premium navel oranges, was formed as a limited liability company in Xingguo County, Jiangxi Province under
PRC laws on November 22, 2005. General Preservation provides wholesale, retail, and institutional customers in China and several other countries
with premium navel orange fruits under the trademark of "General Red".
On September 26, 2011, GRH purchased all of the outstanding
shares of Sheng Da Holding Limited ("Sheng Da BVI"), a company incorporated on May 18, 2011 under the laws of the British
Virgin Islands, from General Red Company, Ltd ("General Red BVI"), a limited liability company formed on August 28,
2008 under the laws of British Virgin Islands, for $23,000. As a result, Sheng Da BVI became the wholly owned subsidiary of GRH.
On September 29, 2011, Sheng Da BVI entered into a series of new agreements to terminate the old agreements with General Preservation,
which were originally signed between General Red BVI and General Preservation on November 17, 2008, amended on June 10, 2011, and
transferred to Sheng Da BVI by General Red BVI on June 30, 2011. The old agreements included a Consultation Agreement, an
Operating Agreement, a Share Pledge Agreement, a Proxy Agreement and an Option Agreement. Upon the entry of these new agreements,
General Preservation is no longer the Variable Interest Entity of Sheng Da BVI.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad
debts, inventories, recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates
on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts
of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation
of the financial statements.
While our significant accounting policies are fully described
in Note 2 to our consolidated financial statements for the year ended December 31, 2011 and 2010, we believe that the following
accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.
Variable interest entities
The accounting standards require a VIE to be consolidated by
a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the
VIE's residual returns. VIEs are those entities in which we, through contractual arrangements, bear the risk of, and enjoy
the rewards normally associated with ownership of the entity, and therefore we are the primary beneficiary of the entity. On September 29,
2011, Sheng Da BVI entered into a series of new agreements to terminate the VIE agreements.
27
Seasonal nature of operations
Typically the first and fourth quarters of the year are better
in terms of profitability because of the maturity stage of the Company's products, which is usually from the month of October.
Accounts receivable
We have a policy of reserving for uncollectible accounts based
on our best estimate of the amount of probable credit losses in our existing accounts receivable. We periodically review our accounts
receivable and other receivables to determine whether an allowance is necessary based on an analysis of past due accounts and other
factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged
to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
As a basis for accurately estimating the likelihood of collection
has been established, we consider a number of factors when determining reserves for uncollectable accounts. We believe that we
use a reasonably reliable methodology to estimate the collectability of our accounts receivable. We review our allowances for doubtful
accounts on at least a quarterly basis. We also consider whether the historical economic conditions are comparable to current economic
conditions. If the financial condition of our customers or other parties with which we have business were to deteriorate, resulting
in an impairment of their ability to make payments, additional allowances may be required.
Inventories
Inventories, consisting of raw materials, work in process and
finished goods related to our products are stated at the lower of cost or market utilizing the weighted average method. An allowance
is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market
value due to obsolescence or quantities in excess of expected demand, we will record additional reserves for the difference between
the cost and the market value. These reserves are recorded based on estimates. We review inventory quantities on hand and on order
and record, on a quarterly basis, a provision for excess and obsolete inventory, if necessary. If the results of the review determine
that a write-down is necessary, we recognize a loss in the period in which the loss is identified, whether or not the inventory
is retained. Our inventory reserves establish a new cost basis for inventory and are not reversed until we sell or dispose of the
related inventory. Such provisions are established based on historical usage, adjusted for known changes in demands for such products,
or the estimated forecast of product demand and production requirements.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using straight-line method over the estimated useful lives of the assets. The estimated useful lives of
the assets are as follows:
Estimated Useful Life
Electronic equipment
5 years
Vehicles
10 years
Machinery and equipment
10 years
Buildings and improvements
5-20 years
Producing orchards
30 years
28
Revenue recognition
The Company recognizes revenue when persuasive evidence of an
arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability
is reasonably assured. The Company recognizes revenues from the sale of citrus products upon shipment and transfer of title.
Foreign currency translation
The Company has evaluated the determination of its functional
currency based on the guidance in ASC Topic, "Foreign Currency Matters," which provides that an entity's functional
currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the
environment in which an entity primarily generates and expends cash.
On its own, the Company raises financing in the U.S. dollar,
pays its own operating expenses primarily in the U.S. dollar, paid dividends to its shareholders of common stock and expects to
receive any dividends that may be declared by its subsidiaries in U.S. dollars.
Therefore, it has been determined that the Company's functional
currency is the U.S. dollar based on the expense and financing indicators, in accordance with the guidance in ASC 830-10-85-5.
The Company uses United States dollars ("U.S. Dollar"
or "US$" or "$") for financial reporting purposes. The subsidiaries within the Company maintain their books
and records in Renminbi ("RMB"), the currency of the currency of China, the economic environment in which the Company's
primary subsidiaries conduct their operations. Assets and liabilities of the subsidiaries in RMB are translated into U.S. Dollars
using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of operations and comprehensive
income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical
rates. Adjustments resulting from the translation of the Company's financial statements are recorded as accumulated other
comprehensive income.
Results of Operations for the Year Ended December 31,
2011 Compared to the Year Ended December 31, 2010
Revenues
. For the year ended December 31, 2011,
we had net revenues of $17,096,403, as compared to net revenues of $13,820,121 for the year ended December 31, 2010, an increase
of approximately of $3,276,282 or 23.7%. The increase in net revenue was mainly attributable to increase in sale prices as well
as increase in sales volume. The favorable market caused by the continually rising demand for organic navel oranges in China made
it possible for us to increase our sale price. Starting from January 2011, we raised our sales prices partially in response to
continuously increasing cultivation costs such as labor and fertilizer. As a result, the unit sales price increased to approximately
$0.82 per kg for the year ended December 31, 2011 from $0.68 per kg for the year ended December 31, 2010. For the year
ended December 31, 2011, the sales volume was approximately 20,972,200 kg, as compared to the sales volume of approximately
20,269,420 kg for the year ended December 31, 2010, an increase of approximately 3.5%.
Cost of sales.
Cost of sales increased by $751,900, or
10.4%, from $7,255,714 for the year ended December 31, 2010 to $8,007,614 for the year ended December 31, 2011, primarily
as a result of increased prices for labor and raw materials related to our cultivation activities.
Gross profit and gross margin.
Our gross profit was $9,088,789
for year ended December 31, 2011 as compared to $6,564,407 for the year ended December 31, 2010 representing gross margins
of 53.2% and 47.5%, respectively. The increase in our gross profit margin percentage was mainly attributable to sales price increases
that occurred in January 2011. Although our labor and raw material costs also increased in 2011, they did not increase as fast
as our sales prices.
29
Selling expenses
. Selling expenses were $748,149 and
$516,459 for the year ended December 31, 2011 and 2010 respectively. Selling expenses consisted of the following:
For the Year ended
For the Year ended
December 31, 2011
December 31, 2010
Increase/decrease
Shipping and handling
633,504
408,848
54.9
%
Compensations and related benefits
40,970
48,499
-15.5
%
Advertising and promotion
17,319
27,246
-36.4
%
Others
56,356
31,866
76.9
%
Total
748,149
516,459
31.0
%
selling expense as % of revenues
4.4
%
3.7
%
Shipping and handling expense increased by $224,656 or 54.9%
due to freight rates inflation related to increasing labor and fuel cost in China.
Compensation and related benefits decreased by $7,529 or 15.5%
as we improved the efficiency of our sales team
after we
completed the construction of our sales
network in 2010. In 2010 and 2011, our customers in Beijing, Shandong, Zhejiang and Heilongjiang are able to accommodate all of
our existing production output. As a result, in 2011, we laid off one salesperson to further reduce the number of our salespersons
to four.
Advertising and promotion expense decreased by 9,927 or 36.4%.
In 2010, we completed the construction of our sales network. As a result, we spent less on advertising and promotion in 2011.
Other expense mainly includes meals, customer entertainment,
vehicle maintenance and miscellaneous office expense. These expenses vary from period to period.
General and administrative expenses. G
eneral and administrative
expenses amounted to $746,618 for the year ended December 31, 2011, as compared to $568,278 for the same period in 2010,
an increase of $178,340 or 31.4%. General and administrative expenses consisted of the following:
For the Year ended
For the Year ended
December 31, 2011
December 31, 2010
Increase/decrease
Compensation and related benefits
246,459
228,663
7.8
%
Depreciation
66,566
93,549
-28.8
%
Professional service
151,678
90,199
68.2
%
Office expense
76,874
26,583
189.2
%
Real estate tax
20,723
19,784
4.7
%
Amortization of land use right
3,556
3,395
4.7
%
Others
180,762
106,105
70.4
%
Total
746,618
568,278
31.4
%
G&A expense as % of revenues
4.4
%
4.1
%
30
Compensation and related benefits increased by $17,796 or 7.8%
due to increased labor costs in China.
Depreciation expense decreased by $26,983 or 28.8% due to allocation
of depreciation of certain equipment into general and administration expense instead of cost of goods sold at off-season in 2010
when we did not process navel oranges. In 2011, we changed our policy by allocating all the depreciation of this equipment into
cost of goods sold.
Professional service fees increased by $61,479 or 68.2% mainly
due to additional legal fees. Professional services primarily included audit and legal fees. In 2011, we incurred additional legal
fees in preparation for being public in the US market as compared to 2010.
Office expenses increased by $50,291 or 189.2% mainly as a result
of expenses associated with launch of WFOE business such as licensing and administration.
Real estate tax increased by $939 or 4.7% due to the depreciation
of the US dollar against RMB.
Amortization of land use right increased by $161 or 4.7% due to the depreciation of the US dollar
against RMB.
Other general and administrative expenses primarily include
customer entertainment, utilities, repairs, telecommunication, insurance and certain low-value material. These expenses usually
increased as the sales increased. In addition, in 2011, we incurred approximately $23,000 as compensation to prior shareholders
of Shengda BVI as GRH purchased Shengda BVI.
Income from operations.
For the year ended December 31,
2011, income from operations was $7,594,022, as compared to $5,479,670 for the year ended December 31, 2010, an increase of
$2,114,352 or 38.6%.
Other income (expenses)
. For the year ended December 31,
2011, other income amounted to $68,258 as compared to other expenses of $195,286 for the same period in 2010. For the years
ended December 31, 2011 and 2010, other income (expense) mainly included:
Government subsidy decreased by $295,880 or 100.0%. The
government subsidy varies from time to time.
Interest expense slightly decreased by $5,564 or 2.5% because
the average balances of our bank loans kept constant from 2010 to 2011.
Other income mainly includes rental income of our product line
in off-season.
Income tax expense
. For the years ended December 31,
2011 and 2010, income tax amounted to $0 and $838,162, as, beginning in January 2011, we started to enjoy income tax waiver that
we received due to our business in agricultural commodities.
Net income.
As a result of the factors described above,
our net income for the year ended December 31, 2011 was $7,662,280. For the year ended December 31, 2010, we had net
income of $4,836,794.
Foreign currency translation gain.
The functional currency
of our subsidiaries operating in the PRC is the Chinese Yuan or Renminbi ("RMB"). The financial statements of our subsidiaries
are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for
the period) for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in
the consolidated statements of operations. As a result of these translations, which are a non-cash adjustment, we reported a foreign
currency translation gain of $883,187 for the year ended December 31, 2011 as compared to $464,201 for the same period year
2010. This non-cash gain had the effect of increasing our reported comprehensive income.
31
Comprehensive income.
For the year ended December 31,
2011, comprehensive income of $8,545,467 is derived from the sum of our net income of $7,662,280 plus foreign currency translation
gains of $883,187.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2011, our balance of cash and cash equivalents
was $3,265,179. As of December 31, 2010, our balance of cash and cash equivalents was $971,321.
The following summarizes the key components of the Company's
cash flows for the year ended December 31, 2011 and 2010:
For the Years Ended
December 31,
December 31,
2011
2010
Net cash provided by operating activities
$
2,207,441
3,194,056
Cash flows used in investing activities
(621,386
)
(593,702
)
Cash flows provided (used) in financing activities
443,681
(3,058,298
)
Effect of foreign currency translation
264,122
42,135
Net increase (decrease) in cash and cash equivalents
$
2,293,858
(415,809
)
The Company currently generates its cash flow through operations
which it believes will be sufficient to sustain current level operations for at least the next twelve months.
In summary, our cash flows were:
Net cash provided by operating activities decreased in the year
ended December 31, 2011 by $986,615 to $2,207,441 from net cash provided by operating activities of $3,194,056 for the year
ended December 31, 2010, which represented a 30.9% decrease from the prior year. These changes were mainly brought about by
changes as follows: an increase in cash used in prepaid leases of $13,740,662 and a decrease in cash provided from advances from
customers of $1,188,431. These decreases were offset by an increase in net income of $2,825,486 or an increase of 58.4% over the
prior period ended December 31, 2010, an increase in cash used in accounts receivable of $1,998,788, a decrease in cash used
in inventory of $861,762 and an increase in cash provided by accounts payable and accrued expenses of $7,926,773.
Net cash used in investing activity increased by $27,684 in
the period ended December 31, 2011 compared to the same period in 2010 which is mainly due to an increase in cash used for
our acquisition of machinery and equipment of $507,523, offset by an decrease in cash used in buyout of existing shareholder of
$300,000.
Net cash provided by financing activities increased by $3,501,979
to $443,681 in the period ended December 31, 2011 compared to $3,058,298 used in financing activities in the same period of
2010. This was mainly due to an increase in cash provided by short-term loans of $2,035,540, a decrease in cash payment to related
parties of $1,980,459, offset by an increase in cash used in repayment of a long-term bank loan of $809,900.
32
Working capital at December 31, 2011 decreased by
$4,791,319 to $-5,485,900 from $-694,581 or 689.8% over the same period ended December 31, 2010. The negative working
capital in 2011 is mainly a result of purchasing 308,000 mature navel orange trees on credit in 2011 for a total price of
approximately $14,730,000 (RMB93,598,560), which needs to be repaid in two years. The expected navel orange output from these
purchased trees in 2012 is approximately 14,000 tons and will generate a profit of approximately $4,722,000 (RMB30,000,000).
Furthermore, the expected profit from the output of our existing orange trees in 2012 is approximately $5,509,000
(RMB35,000,000). In addition, as we are listed by the lending bank as a good credit customer, we reasonably believe that our
short-term bank loans will be renewed at their maturity dates. As a result we believe our operating cash is sufficient to sustain
current level operations for at least the next twelve months.
33
Results of Operations for the Three Months Ended March 31,
2012 Compared to the Three Months Ended March 31, 2011
Revenues. For the three months ended March 31, 2012, we
had net revenues of $7,650,288, as compared to net revenues of $7,461,779 for the three months ended March 31, 2011, an increase
of approximately $188,509 or 2.5%. The increase in net revenues was primarily attributable to increases in sales volume, offset
by a decrease in our sales prices. As navel orange orchards in our leased farmland became more mature, we were able to harvest
more navel oranges starting in December 2011 as compared to the same harvest season of 2010. As a result, we were able to sell
more navel oranges during the first quarter of 2012 as compared to the first quarter of 2011. For the three months ended March 31,
2012, the sales volume increased to approximately 9,522,275kg from approximately 8,489,330kg for the three months ended March 31,
2011, an increase of approximately 12.2%. However, as output of navel oranges in the South of Jiangxi Province, the homeland of
growing navel orange in China, increased each year, the market becomes more competitive. Furthermore, in the first quarter of 2012,
due to the cost increase in rental, shipping and labor, our customers, mainly wholesalers, suffered losses in their profit margin.
In order to leave room for our customers' profit and maintain our market shares, we reduced our sales price to $0.80 for
the three months ended March 31, 2012 from $0.88 for the three months ended March 31, 2011.
Cost of sales.
Cost of sales increased by $348,588, or
11.0%, from $3,166,453 for the three months ended March 31, 2011 to $3,515,041 for the three months ended March 31, 2012
mainly as a result of 12.2% increase in the sales volume.
Gross profit and gross margin.
Our gross profit was $4,135,247
for three months ended March 31, 2012 as compared to $4,295,326 for the three months ended March 31, 2011 representing
gross margins of 54.1% and 57.6%, respectively. The decrease in our gross profit margin was mainly attributable to decreases in
sales prices that occurred in the three months ended March 31, 2012, while our unit cost kept at approximately $0.37 per kg
period over period.
Selling expenses
. Selling expenses were $429,820 and
$ 156,390 for the three months ended March 31, 2012 and 2011 respectively. Selling expenses consisted of the following:
For the three
months ended
For the three
months ended
March 31, 2012
March 31, 2011
Increase/decrease
Shipping and handling
384,278
145,273
164.5
%
Compensations and related benefits
11,530
7,586
52.0
%
Advertising and promotion
17,182
2,110
714.3
%
Others
16,830
1,421
1,084.3
%
Total
429,820
156,390
174.8
%
selling expense as % of revenues
5.6
%
2.1
%
Shipping and handling expenses increased by $239,005 or 164.5%,
which includes approximately $125,000 in extra costs related to ocean shipping incurred for oranges sold to United Arab Emirates
and approximately $127,227 in shipping costs in 2011, which was paid off as part of orange processing fee, and was recorded as
cost of goods. In order to correctly reflect its nature, starting from January 2012, we decided to record it as selling expense.
Compensation and related benefits increased by $3,944 or 52.0%
as we incurred more travelling expenses in the three months ended March 31, 2012.
34
Advertising and promotion expense increased by $15,072 or 714.3%
as a result of a planned promotion campaign in 2012. In order to promote the brand name of General Red Navel Oranges, we plan to
spend more on advertisements in 2012.
Other expense mainly includes packaging, customer entertainment,
vehicle maintenance and miscellaneous office expenses. Because packaging materials are low-value and hard to be counted in use,
they are expensed immediately after purchase. In the three months ended March 31, 2012, approximately $16,798 packaging materials
were expensed. Other expenses are minimal and vary from time to time.
General and administrative expenses. G
eneral and administrative
expenses amounted to $179,631 for the three months ended March 31, 2012, as compared to $161,922 for the same period
in 2011, an increase of $17,709 or 10.9%. General and administrative expenses consisted of the following:
For the three
months ended
For the three
months ended
March 31, 2012
March 31, 2011
Increase/decrease
Compensation and related benefits
70,648
82,698
-14.6
%
Depreciation
25,617
16,309
57.1
%
Professional service
31,454
1,004
3032.9
%
Office expense
20,354
13,206
54.1
%
Amortization of land use right
911
873
4.4
%
Others
30,647
47,832
-35.9
%
Total
179,631
161,922
10.9
%
G&A expense as % of revenues
2.3
%
2.2
%
Compensation and related benefits decreased by $12,050 or 14.6%.
In the three months ended March 31, 2011, we awarded bonuses of approximately $8,570, while in the three months ended March 31,
2012, we did not award any bonuses. The remaining decrease is due to the variance in management's travelling expense period
by period.
Depreciation expense increased by $9,308 or 57.1% due to completion
of construction of our Plastic Sorting Workshop worth approximately $132,000 and addition of certain equipment in December 2011,
which we started to record depreciation during the three months ended March 31, 2012.
Professional service fees increased by $ 30,450 mainly as a
result of appraisal fee of approximately $20,000 associated with a bank loan application and US professional fees such as legal
and auditor fees in preparation for being public in the US market.
Office expense increased by $7,148 or 54.1% mainly as a result
of business expansion.
Amortization of land use right increased by $38 or 4.4% due
to changes in the exchange rate of the US dollar to RMB.
Other general and administrative expenses mainly include customer
entertainment, utilities, repairs, telecommunication, insurance and certain low-value material. These expenses usually increased
as sales increased. We started reducing our costs related to customer entertainment, which decreased by $17,043 period over period.
35
Income from operations.
For the three months ended March 31,
2012, income from operations was $3,525,796, as compared to $3,977,014 for the three months ended March 31, 2011, a decrease
of $451,218 or 11.3%.
Other income (expenses)
. For the three months ended March 31,
2012, other expense amounted to $67,371 as compared to other expenses of $8,343 for the same period in 2011. For the three
months ended March 31, 2012 and 2011, other income (expense) mainly included:
Interest expense slightly increased by $29,542 or 49.2% due
to a significant increase in the average balances of our bank loans.
Other income mainly includes rental income of our product line
in off-season and certain government subsidies. In the three months ended March 31, 2012, we received government subsidies
such as bank loan interest discount and an eco-irrigation subsidy.
Income tax expense
. For both the three months ended March 31,
2012 and 2011, income tax amounted to $0, as we started to enjoy income tax waiver in January 2011, as we engaged in agricultural
commodities.
Net income.
As a result of the factors described above,
our net income for the three months ended March 31, 2012 was $3,458,425. For the three months ended March 31, 2011, we
had net income of $3,968,671.
Foreign currency translation gain.
The functional currency
of our subsidiaries operating in the PRC is the Chinese Yuan or Renminbi ("RMB"). The financial statements of our subsidiaries
are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for
the period) for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in
the consolidated statements of operations. As a result of these translations, which are a non-cash adjustment, we reported a foreign
currency translation gain of $140,902 for the three months ended March 31, 2012 as compared to $111,938 for the same period
year 2011. This non-cash gain had the effect of increasing our reported comprehensive income.
Comprehensive income.
For the three months ended March 31,
2012, comprehensive income of $3,599,327 is derived from the sum of our net income of $3,458,425 plus foreign currency translation
gains of $140,902.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2012, our balance of cash and cash equivalents
was $647,778. As of March 31, 2011, our balance of cash and cash equivalents was $1,610,934.
The following summarizes the key components of the Company's
cash flows for the three months ended March 31, 2012 and 2011:
For the Three Months Ended
March 31,
March 31,
2012
2011
Net cash (used in) provided by operating activities
$
(2,626,697
)
1,088,345
Cash flows (used in) investing activities
(18,668
)
(1,141
)
Cash flows provided by (used) in financing activities
377
(456,136
)
Effect of foreign currency translation
27,587
8,545
Net (decrease) increase in cash and cash equivalents
$
(2,617,401
)
639,613
36
The Company currently generates its cash flow through operations
which it believes will be sufficient to sustain current level operations for at least the next twelve months.
In summary, our cash flows were:
Net cash used in operating activities increased in the three
months ended March 31, 2012 by $3,715,042 to $2,626,697 from net cash provided by operating activities of $1,088,345 for the
three months ended March 31, 2011, which represented a 341.3% decrease from the prior year. These changes were mainly brought
about by changes as follows: a decrease in net income of $510,246, an increase in cash used in accounts receivable of $2,099,277,
a decrease in cash provided from accounts payable and accrued expenses of $2,718,219 and an increase in cash used in inventory
of $947,026. This was offset by a decrease in cash used in advance payment of $1,628,927 and an increase in cash provided by advances
from customers of $597,079.
Net cash used in investing activity increased by $17,527 in
the period ended March 31, 2012 compared to the same period ended in 2011, which is mainly due to an increase in cash used
for our acquisition of machinery and equipment of $6,874.
Net cash provided by financing activities increased by
$456,513 to $377 in the period ended March 31, 2012 compared to $456,136 used in financing activities in  the same
period  in 2011. This was mainly due to a decrease in cash used to repay related parties of $456,513.
Working capital at March 31, 2012 decreased by $4,942,957
to $-1,435,551 from $3,507,406 or 140.9% over the same period ended March 31, 2011. The negative working capital in 2012 is
mainly a result of purchasing 308,000 mature navel orange trees on credit in 2011 for a total price of approximately $14,730,000
(RMB93,598,560), which needs to be repaid in two years. The expected navel orange output from these
purchased trees in 2012 is approximately 14,000 tons and will generate a profit of approximately $4,722,000 (RMB30,000,000).
Furthermore, the expected profit from the output of our existing orange trees in 2012 is approximately $5,509,000
(RMB35,000,000). In addition, as we are listed by the lending bank as a good credit customer, we reasonably believe that our
short-term bank loans will be renewed at their maturity dates. As a result we believe our operating cash is sufficient to sustain
current level operations for at least the next twelve months.
37
Description of Securities
Authorized Capital Stock
Our authorized capital stock consists of 200,000,000 shares
of Common Stock, par value $0.0001 per share, of which 127,349,551 shares are outstanding.
Common Stock
Holders of Common Stock are entitled to cast one vote for each
share on all matters submitted to a vote of shareholders, including the election of directors. The holders of Common Stock are
entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available
therefore. See "Dividend Policy." Such holders do not have any preemptive or other rights to subscribe for additional
shares. All holders of Common Stock are entitled to share ratably in any assets for distribution to shareholders upon our liquidation,
dissolution or winding up. There are no conversion, redemption or sinking fund provisions applicable to the Common Stock. All outstanding
shares of Common Stock are fully paid and non-assessable.
Transfer
Agent
The
transfer agent of our common stock is Globex Transfer, LLC, located at 780 Deltona Boulevard, Suite 202, Deltona, Florida 32725.
38
Market
Price of and Dividends on Common Equity and Other Shareholder Matters
Market Information
There is no established public trading market for our Common
Stock. Our Common Stock is quoted on the OTC Bulletin Board under the symbol "GELT", but there is no active trading
at this time. Should a market develop for our shares, the trading price of the Common Stock is likely to be highly volatile and
could be subject to wide fluctuations in response to factors such as actual or anticipated variations in quarterly operating results,
announcements of technological innovations, new sales formats, or new services by us or our competitors, changes in financial estimates
by securities analysts, conditions or trends in the fruit or agriculture markets, announcements by us or our competitors of significant
acquisitions, strategic partnerships, joint ventures, capital commitments, additions or departures of key personnel, sales of common
stock and other events or factors, many of which are beyond our control. In addition, the stock market in general, and the market
for fruit and agricultural products in particular, has experienced extreme price and volume fluctuations that have often been unrelated
or disproportionate to the operating performance of such companies. These broad market and industry factors may materially adversely
affect the market price of the common stock, regardless of our operating performance.
Consequently, future announcements concerning us or our competitors,
litigation, or public concerns as to the commercial value of one or more of our products or services may cause the market price
of our common stock to fluctuate substantially for reasons which may be unrelated to operating results. These fluctuations, as
well as general economic, political and market conditions, may have a material adverse effect on the market price of our Common
Stock.
Holders of Common Stock
As of July 11, 2012, there were 634 record holders of Common
Stock.
Dividend Policy
We currently intend to retain all available funds and any future
earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends on our Common Stock
for the foreseeable future.
Future cash dividends, if any, will be at the discretion
of our Board of Directors and will depend upon our future operations and earnings, capital requirements and surplus, general
financial condition, contractual restrictions and other factors as our Board of Directors may deem relevant. Dividends or
other distributions will only be paid or made if we are able to pay our debts as they fall due in the ordinary course of
business.
In addition, under PRC Company Law and relevant rules and regulations,
our PRC subsidiaries may pay dividends only out of their retained earnings/net profit, if any, calculated according to PRC accounting
standards, and only after accumulated losses from preceding years have been fully covered and the following appropriations have
been made:
a) appropriations to the statutory surplus reserve equivalent
to 10% of its net profits less any accumulated losses, as determined under PRC GAAP; no further appropriations to the statutory
surplus reserve are required once this reserve reaches an amount equal to 50% of its respective registered capital;
39
b) appropriations to a discretionary surplus
reserve as approved by the shareholders in shareholders' meeting.
Indemnification of Directors and Officers
Our bylaws provide that we must, to the maximum extent and in
the manner permitted by the General Corporation Law of Delaware, indemnify any person against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or
completed action, suit, or proceeding in which such person was or is a party or is threatened to be made a party by reason of the
fact that such person is or was our director or officer of the corporation. Any repeal or modification of these provisions will
not adversely affect any right or protection of any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
In addition, our bylaws provide that we must indemnify our directors
and officers and we must advance expenses, including attorneys' fees, to our directors and officers in connection with legal proceedings,
subject to limited exceptions.
40
Principal Stockholders
The following table sets forth certain information
regarding beneficial ownership of our Common Stock as of July 11, 2012 (after giving effect to the Share Exchange and the related
issuances) by (i) each person (or group of affiliated persons) who is known by us to own more than five percent of the outstanding
shares of our Common Stock, (ii) each director, executive officer and director nominee, and (iii) all of our directors,
executive officers and director nominees as a group. As of July 11, 2012, we had 127,349,551 shares of Common Stock issued and
outstanding.
Beneficial ownership is determined in accordance
with SEC rules and generally includes voting or investment power with respect to securities. Unless otherwise noted, the principal
address of each of the stockholders, directors and officers listed below is Room 2903, Unit B, Jianwai SOHO East District, 39
East Third Ring  Road Central, Chaoyang District, Beijing City, China.
Name & Address of Beneficial Owner
Amount & Nature of Beneficial Ownership
(1)
Percent of Class
(2)
Xingping Hou
(3)
79,982,724
62.80
Yongjun Zeng
26,505
*
Shaokang Zeng
--
--
Across Asia Investments Limited
(4)
8,660,000
6.80
Ever Shining Investments Limited
(5)
8,670,000
6.81
Hua Mei Investments Limited
(3)
79,982,724
62.80
Zhihao Sabio Zhang
(3)
79,982,724
62.80
All officers and directors as a group (3 persons)
80,009,229
62.83
*Less than 1 percent
(1)
Pursuant to Rule 13d-3 under the Exchange Act, a person
has beneficial ownership of any securities as to which such person, directly or indirectly, through any contract, arrangement,
undertaking, relationship or otherwise has or shares voting power and/or investment power or as to which such person has the right
to acquire such voting and/or or investment power within 60 days.  Unless otherwise stated, each beneficial owner has sole
power to vote and dispose of the shares.
(2)
Based on 127,349,551 shares of Common Stock outstanding
as of July 11, 2012.
(3)
Xingping Hou is the sole director of Hua Mei Investments
Limited, and Zhihao Sabio Zhang owns all of the outstanding shares of Hua Mei Investments Limited. Pursuant to a call option agreement
dated July 1, 2012, Mr. Hou has the right to purchase all of the shares in Hua Mei Investments Limited held by Mr. Zhang . Such
option vests in three annual installments over a period of three years, of which 34% becomes exercisable on July 1, 2013, 33%
becomes exercisable on July 1, 2014, and the remaining 33% becomes exercisable on July 1, 2015. The option expires on July 1,
2017.
(4)
Shiqiu Xiao controls Across Asia Investment Limited.
(5)
Chunquan Luo controls Ever
Shining Investment Limited.
Item 3.02	Unregistered
Sales of Equity Securities
In connection with the Exchange Agreement, on July 11, 2012,
we issued an aggregate of 125,112,803 shares of Common Stock to the GRH Shareholders. We received in exchange from the GRH Shareholders
125,112,803 shares of GRH, representing 100% of the issued and outstanding shares of GRH, which exchange resulted in GRH becoming
our wholly owned subsidiary. The issuance of such securities was exempt from registration pursuant to Section 4(2) under the Securities
Act of 1933, as amended, and Regulation D or Regulation S promulgated thereunder.
41
Item 4.01	Change in Registrant's Certifying Accountant.
Effective July 11, 2012, (the
"Termination Date"), we terminated our engagement of Weinberg & Baer LLC ("Weinberg") as our independent
registered public accounting firm and retained Patrizio & Zhao, LLC ("Patrizio") as our independent public accounting
firm. This change in the Company's independent registered public accounting firm was unanimously approved by our board of directors.
The principal accountant's
reports of Weinberg on the financial statements of the Company as of and for the years ended December 31, 2011 and 2010 did not
contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting
principles, except that the reports of Weinberg for the fiscal year ended December 31, 2011 indicated conditions which raised substantial
doubt about the Company's ability to continue as a going concern.
During our two most recent
fiscal years and through the Termination Date, there were no disagreements with Weinberg on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure, which if not resolved to Weinberg's satisfaction
would have caused it to make reference thereto in connection with its reports on the financial statements for such periods. During
our two most recent fiscal years and through and through the Termination Date, there were no reportable events of the type described
in Item 304(a)(1)(v) of Regulation S-K.
During our two most recent
fiscal years and through the Termination Date, we did not consult with Patrizio with respect to any of (i) the application of accounting
principles to a specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on our
financial statements; or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation
S-K) or an event of the type described in Item 304(a)(1)(v) of Regulation S-K.
We provided Weinberg with
a copy of the foregoing disclosure and requested Weinberg to furnish us with a letter addressed to the Securities and Exchange
Commission stating whether it agrees with the statements made therein. A copy of such letter, dated July 12], 2012, furnished by
Weinberg, is filed as Exhibit 16.1 to this Current Report on Form 8-K.
Item 5.01	Changes
In Control of the Registrant
On the Closing Date, we consummated the transactions contemplated
by the Exchange Agreement, pursuant to which we acquired all of the issued and outstanding shares of GRH in exchange for the issuance
in the aggregate of 125,112,803 shares of our Common Stock to the GRH Shareholders.
Other than the transactions and agreements disclosed in this
Form 8-K, we know of no other arrangements which may result in our change in control.
Item 5.02 	Departure
of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
On the Closing Date, Yehuda Smaya Szender resigned as President,
Chief Executive Officer, Treasurer and Director and Ryan Goldstein resigned as Secretary and Director, effective immediately. Our
Board of Directors appointed Xingping Hou to serve as Chairman, Chief Executive Officer and President and Shaokang Zeng to serve
as Chief Financial Officer and Director and Yongjun Zeng to serve as Secretary and Director.
42
Set forth below is information regarding our current directors,
executive officers and director nominee.
Name
Age
Position
Xingping Hou
51
Chairman, Chief Executive Officer and President
Shaokang Zeng
34
Chief Financial Officer and Director
Yongjun Zeng
41
Secretary and Director
______________
Xingping Hou, Chairman, Chief Executive Officer and President.
Mr. Hou will serve as our Chairman, Chief Executive Officer and President. Mr. Hou has served as the Executive Director, Manager
of General Fruit since March 2003 and as the Executive Director, Manager of General Preservation since July 2003.
Mr. Hou has also served as the Chairman of the Board for each of General Red Industry Group Co., Ltd. and Shaanxi General Red Agricultural
Development Co., Ltd. since May 2010 and October 2010, respectively. He has also served as the Chairman of the Board and President
of General Red International, Inc. since November 2007. Since May 2011, Mr. Hou has served as the Chief Executive Officer, President
and Chairman of General Red Holding, Inc. Mr. Hou has also served as a director of Hua Mei Investments Limited and Han Glory International
Limited since April 2011. Mr. Hou graduated from the PLA Nanchang Army Institute.
Shaokang Zeng, Chief Financial Officer and Director.
Mr. Zeng will serve as our Chief Financial Officer and a director. Mr. Zeng has served as the Finance Department Manager of General
Fruit since December 2006. Mr. Zeng graduated from the People's University of China where he studied accounting
and received an MBA from Beijing University of Chemical Technology, College of Business Administration.
Yongjun Zeng, Secretary and Director
. Mr. Zeng will serve
as our Secretary and a director. Mr. Zeng has served as the Assistant General Manager of General Fruit since August 2003.
Since May 2011, Mr. Zeng has also served as the Vice President of General Red Holding, Inc. He has also served as a director of
General Red Industry Group Co., Ltd. since March 2006. Mr. Zeng graduated from the Central University of Finance and Economics
College of Adult Education where he studied finance.
Family Relationships
There are no family relationships between any of our directors
or executive officers.
Employment Agreements
We do not have any employment agreements with our executive officers.
43
Executive Compensation
None of our executive officers, namely Xingping Hou, our Chief Executive Officer, and Shaokang Zeng, our
Chief Financial Officer, have received compensation, paid or accrued, by the Company or its subsidiaries in 2011 and 2010.
Director Compensation
Currently our directors serve without compensation.
Director Independence
Currently, we do not have
any independent directors. Since our common stock is not currently listed on a national securities exchange, we have used the definition
of "independence" of The NASDAQ Stock Market to make this determination.
Under NASDAQ Listing Rule
5605(a)(2), an "independent director" is a "person other than an officer or employee of the company or any other
individual having a relationship which, in the opinion of the company's board of directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director."
We do not currently have a
separately designated audit, nominating or compensation committee. However, we do intend to comply with the independent director
and committee composition requirements in the future.
Certain Relationships And Related Party Transactions
None.
Item 5.06	Change in Shell Company Status.
As described in Item 1.01
of this Current Report on Form 8-K, on the Closing Date, we acquired all of the outstanding shares of GRH from the GRH Shareholders
and the GRH Shareholders transferred all of the outstanding shares of common stock of GRH to us. In exchange, we issued to the
GRH Shareholders the Common Stock, equal to 98.24% of all of our shares. As a result of the transactions contemplated by the Exchange
Agreement, GRH became our wholly owned subsidiary.
As the result of the consummation
of the Share Exchange, we are no longer a shell company as that term is defined in Rule 12b-2 of the Securities Exchange Act of
1934, as amended.
Item 8.01 	Other Events.
None.
Item 9.01 	Financial Statements and Exhibits.
Financial statements of business acquired
.
The Audited Consolidated Financial Statements
of GRH as for the years ended December 31, 2011 and 2010 are filed as Exhibit 99.1 to this current report and are incorporated
herein by reference. Unaudited Consolidated Financial Statements of GRH for the three months ended March 31, 2012 and 2011 are
filed as Exhibit 99.2 to this current report and are incorporated herein by reference.
44
Pro forma financial information
.
Unaudited Pro Forma Financial Statements of
GRH as of March 31, 2012 for the year ended December 31, 2011 and for the three months ended March 31, 2012 are filed as Exhibit
99.3 to this current report and are incorporated herein by reference.
Shell Company Transactions.
Reference is made to Items 9.01(a) and 9.01(b)
and the exhibits referred to therein which are incorporated herein by reference.
Exhibits
Exhibit No.
Description
2.1
Share Exchange Agreement, dated July 11, 2012
10.1
Form of Orange Purchase Contract
10.2
Call Option Agreement, dated July 1, 2012
10.3
Property Use Certificates, dated August 30, 2007 (translation)
10.4
Land Use Certificate, dated November 15, 2005 (translation)
10.5
Office Lease Contract, dated March 1, 2011, between General Fruit and
    Shiyong Xu (translation)
10.6
Office Lease Contract, dated February 10, 2012,
    between General Fruit and Taixiang Wang (translation)
16.1
Letter of Weinberg & Baer LLC to the SEC, dated July 12, 2012
21
Subsidiaries of the Registrant
99.1
Audited consolidated balance sheets of General Red Holding, Inc. and its subsidiaries for the fiscal year ended December 31, 2011 and 2010 and the related consolidated statements of income, stockholders' equity and cash flows for each of the two years ended December 31, 2011
99.2
Unaudited statements of income and cash flows of General Red Holding, Inc. for the three months ended March 31, 2012 and 2011
99.3
Unaudited pro forma financial statements and related notes thereto
45
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GELTOLOGY INC.
Dated: July 17, 2012
By:
/s/ Xingping Hou
Name: Xingping Hou
Title: Chief Executive Officer
46