8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) August 14, 2008
 

FASHION TECH INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
Nevada
(State or Other Jurisdiction of Incorporation)
	2-93231-NY		87-0395695
(Commission File Number)		(IRS Employer Identification No.)
	Fashion Tech International, Inc. No. 2 Wenhua Street Dongfeng New Village, Daqing, Heilongjiang 163311, China
(Address of Principal Executive Offices)
(86) 459-4609488
(Registrant's Telephone Number, Including Area Code)
12890 Hilltop Road Argyle, TX 76226
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements, which reflect our views with respect to future events and financial performance. These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from such statements. These forward-looking statements are identified by, among other things, the words "anticipates", "believes", "estimates", "expects", "plans", "projects", "targets" and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that may cause actual results to differ from those projected include the risk factors specified below.

USE OF DEFINED TERMS

Except where the context otherwise requires and for the purposes of this report only:

• "we," "us," "our company," "our" and "Fashion Tech" refer to the combined business of Fashion Tech International, Inc. and/or its consolidated subsidiaries, as the case may be;

•  "Fezdale" refers to Fezdale Investments Limited, our direct, wholly-owned subsidiary, a British Virgin Islands corporation, or Fezdale Investments Limited and its consolidated subsidiaries, as the case may be;

• "Solar Sun" refers to Solar Sun Holdings Limited, our indirect, wholly-owned subsidiary, a Hong Kong corporation;

• "Longheda" refers to Daqing Longheda Food Company Limited, our indirect, wholly-owned subsidiary, a Chinese corporation;

• "SEC" refers to the United States Securities and Exchange Commission;

• "China," "Chinese" and "PRC," refer to the People's Republic of China;

• "Renminbi" and "RMB" refer to the legal currency of China;

• and "U.S. dollars," "dollars" and "$" refer to the legal currency of the United States.

ITEM 1.01     ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On August 14, 2008, we entered into a share exchange agreement (the "Share Exchange Agreement"), with Fezdale and the shareholders of Fezdale, Yiu Fai Kung and Kwan Mo Ng (collectively, the "Shareholders"). Pursuant to the Share Exchange Agreement, the Shareholders transferred all of the shares of the capital stock of Fezdale held by them, constituting all of the issued and outstanding stock of Fezdale, in exchange for 30,166,878 newly issued shares of our common stock that constituted 86.59% of our issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transaction contemplated by the Share Exchange Agreement and the initial closing of the transaction contemplated by the securities purchase agreement described below.

On August 14, 2008, we entered into a securities purchase agreement (the "Securities Purchase Agreement") with certain investors and effected the initial closing whereby we issued 1.8 million shares of the our common stock for an aggregate purchase price of approximately $5 million, or $2.78 per share. In the private placement, we are seeking to raise on a best efforts basis aggregate gross offering proceeds of up to $20 million. We expect to complete subsequent closings on or before September 28, 2008. All investors participated or will participate in the private placement are hereinafter referred to as the "Investors." Under the Securities Purchase Agreement, we agreed to register the shares of our common stock within a pre-defined period. As a result of the share exchange transaction and the initial closing of the security purchase transaction described above, we currently have 34,840,175 shares of common stock issued and outstanding.

On August 14, 2008, we also entered into separate lock-up agreements (the "Lock-Up Agreements") with each of our newly appointed directors and executive officers, pursuant to which each of them irrevocably agreed not to offer, pledge, sell, contract to sell or otherwise transfer or dispose of any of their shares of our common stock, during the period commencing on the date of the lock-up agreement and ending on the 12-month anniversary of the date that the registration statement required by the Securities Purchase Agreement is first declared effective by the SEC.

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In connection with the Securities Purchase Agreement, Yiu Fai Kung entered into a make good escrow agreement (the "Investor Make Good Escrow Agreement") whereby Mr. Kung pledged to the Investors a number of his shares of our common stock equal to the total number shares purchased by the Investors. In addition, Mr. Kung also entered into a make good escrow agreement (the "HFG Make Good Escrow Agreement') with HFG International, Limited ("HFG"), whereby he pledged 2,513,758 of his shares of our common stock to HFG. See Item 2.01 of this report below for more details.

Also in connection with the Securities Purchase Agreement, we entered into a holdback escrow agreement (the "Holdback Escrow Agreement"), pursuant to which we agreed that an aggregate of $450,000 of the proceeds (the "Holdback Amount") will be deposited at the closing of the Securities Purchase Agreement with an escrow agent and be distributed upon the satisfaction of certain covenants set forth in the Securities Purchase Agreement. Pursuant to the Holdback Escrow Agreement, $250,000 of the Holdback Amount will be released to the Company upon the Company's satisfaction of a covenant regarding the composition of the board of directors and $200,000 of the Holdback Amount will be released to the Company upon the Company's satisfaction of a covenant regarding hiring of an investors relations firm.

The foregoing description of the terms of the Share Exchange Agreement, Lock-Up Agreements, Securities Purchase Agreement, Investor Make Good Escrow Agreement, the HFG Make Good Escrow Agreement and Holdback Escrow Agreement is qualified in its entirety by reference to the provisions of those documents filed as Exhibits 2.1, 4.1, 10.1, 10.2, 10.3 and 10.4, respectively, to this report, which are incorporated by reference herein.

ITEM 2.01     COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

On August 14, 2008, we completed an acquisition of Fezdale pursuant to the Share Exchange Agreement. The acquisition was accounted for as a recapitalization effected by a share exchange, wherein Fezdale is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized.

FORM 10 DISCLOSURE

As disclosed elsewhere in this report, August 14, 2008, we acquired Fezdale in a reverse acquisition transaction. Item 2.01(f) of Form 8-K states that if the registrant was a shell company like we were immediately before the reverse acquisition transaction disclosed under Item 2.01, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10.

Accordingly, we are providing below the information that would be included in a Form 10 if we were to file a Form 10. Please note that the information provided below relates to the combined enterprises after the acquisition of Fezdale, except that information relating to periods prior to the date of the reverse acquisition only relate to Fashion Tech International, Inc. unless otherwise specifically indicated.

DESCRIPTION OF BUSINESS

OUR CORPORATE STRUCTURE

We own all of the issued and outstanding capital stock of Fezdale, a BVI company, which in turn owns 100% of the outstanding capital stock of Solar Sun, a Hong Kong company. Solar Sun owns 100% of Longheda, incorporated under the PRC law.

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

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OUR CORPORATE HISTORY

We were originally incorporated in the State of Utah on April 22, 1983 under the name Portofino Investment, Inc. In January 1984, we changed our name to Fashion Tech International, Inc. In April 1999, our stockholders approved a merger with Fashion Tech International, Inc., a Nevada corporation to change the domicile of the Company from Utah to Nevada. We were a developmental-stage company from inception to January 1, 1984, when we became the holding company of certain operating or development-stage subsidiaries. On April 1, 1985, we reentered development-stage status. We have been a shell corporation since at least 1989. On June 19, 2008, we effected a one-for-10 reverse split of our issued and outstanding shares of common stock.

On August 14, 2008, we acquired Fezdale in a reverse acquisition transaction, as a result of which, we are no longer a shell company. We plan to amend our Articles of Incorporation to change our name to "China Nutrifruit Group Limited" to reflect the current business of our company.

Background and History of Fezdale and Solar Sun

Fezdale is a private limited liability company incorporated in the BVI on August 22, 2007. Solar Sun was incorporated in Hong Kong Special Administrative Region on September 12, 2007. Solar Sun is a wholly owned subsidiary of Fezdale.

Longheda was established on February 18, 2004 under the laws of the PRC as a limited company. On October 9, 2007, Solar Sun entered into a share purchase agreement with the owners of Longheda under which the six owners of Longheda agreed to transfer an aggregate of 75% interests in Longheda to Solar Sun. On May 12, 2008, Solar Sun entered into another share purchase agreement pursuant to which Solar Sun acquired the remaining 25% of Longheda's equity interest.

Acquisition of Fezdale and Related Financing

On August 14, 2008, we completed a reverse acquisition transaction with Fezdale whereby we issued to the Shareholders 30,166,878 shares of our common stock in exchange for all of the issued and outstanding capital stock of Fezdale. Fezdale thereby became our wholly owned subsidiary and the Shareholders became our controlling stockholders.

Upon the closing of the reverse acquisition, Richard Crimmins, our sole director and officer, submitted his resignation letter pursuant to which he resigned from all offices of the Company that he holds and from his position as our director effective immediately. Jinglin Shi and Changjun Yu were appointed as our directors at the effective time of the resignation of Richard Crimmins. In addition, our executive officers were replaced by the Fezdale executive officers upon the closing of the reverse acquisition as indicated in more detail below.

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For accounting purposes, the share exchange transaction was treated as a reverse acquisition with Fezdale as the acquiror and the Company as the acquired party. Unless the context suggests otherwise, when we refer in this report to business and financial information for periods prior to the consummation of the reverse acquisition, we are referring to the business and financial information of our subsidiary Longheda because Longheda currently conducts all our business operations.

On August 14, 2008, we also effected the initial closing of a private placement pursuant to which we issued and sold 1.8 million shares of our common stock to the Investors. As a result of the initial closing of such private placement, we raised approximately $5 million in gross proceeds, which left us with $4.26 million in net proceeds after the deduction of offering expenses in the amount of approximately $.75 million.

In connection with the private placement and share exchange transaction on August 14, 2008, Yiu Fai Kung, the former shareholder of Fezdale, entered into the Investor Make Good Escrow Agreement and the HFG Make Good Escrow Agreement for the benefits of the Investors and HFG, respectively. Pursuant to the these agreements, Mr. Kung agreed to certain "make good" provisions in the event that the Company does not meet certain income thresholds for fiscal years 2009 and/or 2010. Pursuant to these agreements, Mr. Kung established two escrow accounts and delivered to the escrow agent certificates evidencing the numbers of shares equal to the numbers of shares purchased by the Investors and 2,513,758 shares of our common stock held by him along with blank stock powers, to be held for the benefit of the Investors and HFG, respectively. Mr. Kung agreed that if the after tax net income (the "ATNI") for the Company's 2009 fiscal year is less than $13,919,707 or the ATNI for the Company's 2010 fiscal year is less than $18,495,315 (after the exclusion of certain items from the calculation), then, in each case, Mr. Kung will transfer to the Investors, on a pro rata basis, and HFG, 50% of the applicable make good shares, respectively. In addition, in such event, Mr. Kung's obligation to transfer such make good shares continues to apply to each of the Investors and HFG, even if an Investor or HFG has transferred or sold all or any portion of its securities, and each of the Investors and HFG shall have the right to assign its rights to receive such shares in conjunction with negotiated sales or transfers of any of its securities. If the ATNI for the Company's 2009 fiscal year is no less than $13,919,707 (after the exclusion of certain items from the calculation), 50% of the make good shares will be released to Mr. Kung. If the ATNI for the Company's 2010 fiscal year is no less than $18,495,315 (after the exclusion of certain items from the calculation), then the remaining 50% of the make good shares will be released to Mr. Kung. The parties also agreed that for purposes of determining the ATNI under such agreements, the release of the make good shares to the Investors, to HFG or Mr. Kung as a result of the operation of the make good agreements shall not be deemed to be an expense, charge, or other deduction from revenues even though GAAP may require contrary treatment. The make good agreements will terminate upon the distribution of all the make good shares.

BUSINESS OVERVIEW

We are a holding company that operates through our indirectly owned subsidiary Longheda, a leading producer of premium specialty fruit based products in China. We specialize in developing, processing, marketing and distributing a variety of food products processed primarily from premium specialty fruits grown in Northeast China, including golden berry, crab apple, blueberry and raspberry. We have been producing our premium specialty fruit based products since 2004 and believe that we are the largest golden berry processor in China.

Our primary product offering includes fruit concentrate, nectar, glazed fruits, beverages as well as fresh fruits. Our best selling products are derived from golden berries. We generated approximately 50% of our revenues from golden berry based products in fiscal year 2008. While golden berry based products will remain our main source of revenue, we plan to further diversify our product mix and increase the processing volume of other fruits types such as crab apple and blueberry. Our best selling type of product is fruit concentrate. Sales of fruit concentrate contributed approximately 48% to our total revenue in fiscal year 2008. We plan to continue to focus on fruit concentrate which is our fastest growing product line with greatest market demand.

We sell our products through an extensive nationwide sales and distribution network covering 19 provinces and 39 cities in China. As of March 31, 2008, this network was comprised of 68 distributors. Our processed fruit products are mainly sold to food producers for further processing into fruit juice and other fruit related foods, and our fresh fruits are mainly sold to fruit supermarkets. Our customers are based primarily in China and include Beijing Huapeng Food Co. Ltd., Beijing Taihuaxing Food Co. Ltd., Shanxi Desheng Trading Co. Ltd., Haerbin Shengjinlai Economic and Technology Development Co. Ltd. and Tianjin Aokai Chemical Trading Co. Ltd.

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Quality and safety are of primary importance to us. We have established quality control and food safety management systems for all stages of our business, including raw material sourcing, producing, packaging, storage and transportation of our products. We currently operate from our manufacturing facility located in Daqing, Heilongjiang province, China where abundant supply of a variety of premium specialty fruits is available. We have three fruit processing lines with an aggregate capacity of 9,960 tons and one beverage production line with a capacity of 10,800 tons. To meet the fast growing market demand, we are building a new facility in Mu Dan Jiang, Heilongjiang province and plan to add five new fruit processing production lines by July 2010 which will increase our total installed fruit processing capacity to 29,160 tons. Our new facility in Mu Dan Jiang is under construction and is expected to commence commercial operation by the end of August 2008.

Our sales revenue grew by 49.9% in the fiscal year ended March 31, 2008 to $34.5 million, from $23.0 million in the fiscal year ended March 31, 2007. Net income grew by 31.6% in the fiscal year ended March 31, 2008 to $10.0 million from $7.6 million in the fiscal year ended March 31, 2007. Our gross margin for the fiscal year ended March 31, 2008 was 45.1%.

OUR INDUSTRY

According to a report on China's fruit processing industry issued by Beijing Business & Intelligence Consulting Co. Ltd. ("BBIC," and such report is hereinafter referred to as the "BBIC Report"), an independent market research firm, China's fruit processing industry has grown significantly in the past several years. The total output of fruit processed products in China grew from $16.8 billion in 2005 to $27.5 billion in 2007, representing a compound annual growth rate ("CAGR") of 27.94%. The sales value of fruit processed products in China grew from $17.0 billion in 2005 to $26.1 billion in 2007, representing a CAGR of 27.72%. Among the fruit processed products, glazed fruits and fruit juice and beverage experienced the highest growth rate since 2005. The following table sets forth the output and CAGR of four categories of fruit processed products.

Output Value Breakdown of Fruit Processing Industry in China
(in Billions of U.S.$, except for CAGR data)

	2005	2006	2007	CAGR
Canned Fruit	3.0	3.7	4.3	19.72%
Deep Processed Fruit*	9.7	13.1	16.1	28.83%
Fruit Juice and Beverage	3.3	4.4	5.7	31.43%
Glazed Fruit	0.7	1.0	1.4	41.42%
* Deep processed fruits includes nectar, dried fruit and fruit wine, etc.

Source: 2006-2008 Fruit processing industry research report, Beijing Business & Intelligence Consulting Co. Ltd.

BBIC projected that the total sales value and net income of fruit processed products in China will reach $37.2 billion and $2.5 billion in 2010, or a growth of 42.52% and 66.67%, respectively, during the four-year period from 2007 to 2010. The table below sets forth the sales and net income of fruit processing industry in China from 2005 to 2010 and projected sales and net income of fruit processing industry in China from 2008 to 2010.

Sales and Projected Sales and Net Income of Fruit Processing Industry in China, 2005-2010

(in Billions of U.S. $)	2005	2006	2007	2008	2009	2010
Sales	16.0	21.0	26.1	28.5	32.9	37.2
Net Income	0.9	1.2	1.5	1.8	2.2	2.5

Source: 2006-2008 Fruit processing industry research report, Beijing Business & Intelligence Consulting Co. Ltd.

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We anticipate that growth in China's fruit processing industry, especially, the premium specialty fruit based products, will mainly be driven by the following factors:

The low per capita rate of fruit consumption in China is poised for growth. With approximately a quarter of the world's population, China represents a key growth driver for the global fruit food market. According to Euromonitor, an independent research firm, although China is the largest producer of apples, third largest producer of oranges, and one of the top producers of pears and peaches in the world, per capita fruit juice consumption in China is currently well below that of major developed countries.

Growing affluence fosters increased consummation of fruit processed products. China's economy has grown significantly in recent years. According to the National Bureau of Statistics of China (the "NBS"), China's gross domestic product (the "GDP") has increased from RMB12.0 trillion ($1.6 trillion) in 2002 to RMB25.0 trillion ($3.4 trillion) in 2007. The International Monetary Fund also estimated that China's real GDP should grow at an annual growth rate of 10.0% in 2008. China's economic growth has resulted in a significant increase in household disposable income in China. According to the NBS, between 2002 and 2007, urban household disposable income per capita increased from RMB7,703 ($1,055) to RMB13,786 ($1,887), or a CAGR of 17.4%, and rural household disposable income per capita increased from RMB2,476 ($339) to RMB4,140 ($557), or a CAGR of 12.1%. We believe that as GDP and disposable income increase, fruit processed products will become more affordable and consumers will generally spend an increasing portion of their disposable income on healthy nutritional products, such as our premium specialty fruit based products.

Greater health awareness will stimulate consumption of fruit and fruit processed products. We believe that improved living standards and growing household disposable income have led to greater health awareness among the population. As people become more affluent, we believe that their spending on quality healthy and nutritional products, like our products, will increase. For example, according to the BBIC Report, non-carbonated beverages are gradually taking more market shares from carbonated beverages. The market share of carbonated beverages has decreased from 34% of the total beverage market in 2003 to 26% in 2007, and fruit juice and purified water are the main contributors for the market share increase of non-carbonated beverages.

Growing overseas demand for China's fruit products. The export of fruit products is also a growing aspect of the fruit processing industry in China. With improvements in the quality and quantity of the production, marketing, and transportation technologies, China has strengthened its position in the world market. According to the BBIC Report, processed fruit export sales are expected to reach $10.9 billion in 2010, representing a 42.72% growth over that in 2007.

Government aims to promote the growth of China's fruit process industry. According to the BBIC Report, the harvest loss of fruits in China is estimated at approximately 20%-30%, less than 50% of the total harvested fruit can be commercialized, and less than 10% of the total commercialized fruit is processed. We believe that the Chinese government will promote the development of the fruit and fruit processing industry, as evidenced by the "Development Program of Food Processing Industry 2006-2010" report issued by the Ministry of Agriculture (the "MOA"). The MOA aims to increase the fruit processing ratio to 10%-15% and the fruit commercialization ratio to above 60%, and to reduce the fruit harvest loss ratio to 10%-15% by 2010. We believe the government's five year plan will further facilitate the growth of the fruit processing industry in China.

OUR COMPETITIVE STRENGTHS

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

• High-end niche products. We process premium specialty fruits that have high nutrient concentration, potential health benefits and high value. Our products are positioned in the high-end market as premium healthy food and are distinguished from the common fruit based products in the market.

• Leading market position and rapid growth. We believe we are the largest processor of golden berry in China and a leading producer of premium specialty fruit based products. In the past three fiscal years, our revenue has grown at a compound annual growth rate of approximately 77% from $11.0 million in fiscal year 2006 to $34.5 million in fiscal year 2008. Our net income has grown at a compound annual growth rate of approximately 60% from $3.9 million in fiscal year 2006 to $10.0 million in fiscal year 2008.

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• Established raw material procurement network. Our facilities are strategically located in close proximity to major premium specialty fruit orchards in Northeastern China which allows us to have easy access to the supply of the source fruits, enjoy sourcing stability and maintain a competitive cost structure. We have employed different strategies to secure the supply of source fruits to support our rapid growth. For example, we have entered into cooperative agreements with local government where major premium specialty fruit orchards are based to coordinate with individual farmers to supply us with golden berries. We have also secured the supply of other source fruits by developing a group of effective and loyal agents who collect source fruits from individual farmers. We believe these supply arrangements provide us with an important competitive advantage in terms of quality, stability and reliability of supply.

• Emphasis on quality control and food safety. We emphasis quality and safety and have quality control and food safety management systems for all stages of our business, including raw materials sourcing, production, packaging, storage and transportation of our products. We apply and adhere to internal quality standards that we believe are stricter than the PRC national standards. Our processing facility possesses ISO9001 and HACCP series qualifications.

• Extensive nationwide sales and distribution network. Our extensive sales and distribution network allows us to reach a wide range of customers all over the nation. As of March 31, 2008, we had 68 regional distributors in 19 provinces and 39 cities. Our distributors sell our products through their own network in the region to fruit super markets or fruit based food producers for further processing. We have a stable and effective group of distributors who helped to bring up our sales at a compound growth rate of approximately 77% in the past three years.

• Experienced management team with a strong track record. Our management team has extensive operating experience and industry knowledge. Changjun Yu, our founder and chairman, has over 13 years of experience in the fruit based product industry. Jinglin Shi, our chief executive officer, has over ten years of experience in managerial positions. This extensive local industry experience is combined with international experience. For example, Colman Cheng, our chief financial officer, has over 14 years of auditing, accounting and financial management experience in international companies. We believe that our management team's experience and capabilities have contributed greatly to our significant growth in the past three years.

OUR GROWTH STRATEGY

As a leading premium specialty fruit based product company in China, we believe we are well positioned to capitalize on future industry growth in China. We are dedicated to providing healthy and high nutritional premium specialty fruit based products. We will implement the following strategic plans to take advantage of industry opportunities and our competitive strengths:

• Increase production capacity. Our existing production lines have been running at close to full capacity while the market demand for our existing products keeps increasing. We also have abundant supply of source fruits to support the expansion of our business. In 2007, Heilongjiang province's total estimated output of golden berry, crab apple, blueberry and raspberry was approximately 200,000 tons, 700,000 tons, 200,000 tons and 100,000 tons, respectively. Our current processing capacity only allows us to process a small percentage of the total output. We plan to add five new production lines to expand our fruit processing capacity from 9,960 tons to 29,160 tons by July 2010.

• Further strengthen our raw materials procurement network. We believe that a secure supply of principal raw materials is crucial to our future success. Hence, we intend to further strengthen our existing cooperative relationship with the two golden berry farm bases that we procure golden berries from and to develop new relationship with other golden berry farm bases when necessary. We will keep developing new quality agents in orchards of other fresh fruits to secure sufficient supply to support our rapid growth.

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• Further expand our distribution network to increase the prevalence of our products nationwide. Our current sales depend heavily on our regional distributors and their network. To support our rapid growth in sales, we plan to further expand our distribution network by adding five to ten new distributors annually in the next few years.

• Continue to diversify our product portfolio to satisfy different customer preferences. We currently offer fresh golden berries and four series of products processed from four types of source fruits. We constantly evaluate our products and seek to adapt to changing market conditions by updating our products to reflect new trends in consumer preferences. Our new products under development include glazed blueberry, sea buckthorn concentrate, blackcurrant concentrate and golden berry extracts which are expected to enter the market between August 2008 to September 2009.

OUR PRODUCTS

Our primary product offering includes fruit concentrate, nectar, glazed fruits, beverages as well as fresh fruits. We are also in the process of developing several new products.

The following table sets forth our products categorized by both source fruits and product type in terms of revenue for the fiscal years 2008 and 2007:

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Fruit concentrate is our primary product line, accounting for approximately 48% of our total revenue in fiscal year 2008. We currently produce four types of fruit concentrate: golden berry, crab apple, blueberry and raspberry. We currently have one concentrate production line which is allocated for the production of all of four types of concentrates. We plan to continue to focus on fruit concentrate which is our fastest growing product line with greatest market demand. To achieve this end, we plan to add two more concentrate production lines with an installed capacity of 6,000 tons each. These two new production lines are expected to become operational by end of August 2008 and July 2010, respectively.

Among the four types of concentrate, golden berry concentration enjoys the highest gross margin and crab apple concentrate has a relatively lower gross margin, but occupies most of our production capacity. We produce more crab apple concentrate despite its relatively lower gross margin mainly because of the high demand for such products and abundant supply of fresh crab apples which has the largest supply in Northeast China as compared to the other three source fruits.

Crab apple is a special species of apple which has much higher acidity than normal species of apple. The apple concentrate produced in China commonly has an acidity of 1.2 to 1.8 while crab apple concentrate typically has acidity over 3.2. The only way to raise the acidity of apple concentrate is to mix it with another apple concentrate with higher acidity. Since the apple concentrates that are exported from China to overseas market are usually required to have an acidity of no less 2.0, the local producers of apple concentrate need large quantity of high acidity apple concentrate to add to its low acidity apple concentrate. Therefore, crab apple concentrate is in high demand in the market.

Nectar

Our nectar product line contributed approximately 15% of our total revenue in fiscal year 2008. Nectar is an unfermented and unconcentrated pulp product. To produce nectar, fresh fruits are crushed and then instantaneously sterilized under high temperature without adding any additives other than citric acid. It preserves the nutrition and flavor of the fresh fruit to the greatest extent and has a long shelf life. Nectar is easy to store and transport, and thus providing the producers of fresh fruit based products a much better alternative material than fresh fruit.

We currently produce and sell nectar from golden berry only. Our nectar products are commonly used for further processing into a wide variety of products, including fruit concentrate, fruit ice cream, nectar beverage, biscuits, fruit jam and fruit yogurt. Our nectar products have been certified as green food by China Green Food Development Center in May 2006.

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Glazed Fruit

Our glazed fruit product line contributed approximately 13% of our total revenue in fiscal year 2008. Glazed fruit is preserved fruit with high sugar content, a traditional Chinese food that enjoys great popularity in China. Glazed fruits have a long shelf life and are commonly consumed as snacks.

We currently produce and sell glazed fruit from golden berry only. Glazed golden berry is mainly sold as a high-end snack. Due to the special taste of golden berry, our products are also commonly used in a wide variety of foods such as baked foods. Our glazed fruit products have been certified as green food by China Green Food Development Center in May 2006.

Fresh Fruit

Sales from fresh golden berries contributed approximately 6% of our total revenue in fiscal year 2008. We sell fresh golden berries to our distributors during the picking season which is typically mid July to mid November every year. We purchase fresh golden berries from local farmers in Heilongjiang province and sort them into different grades. Only the top-grade golden berries that are freshest and carry the best color, shape and aroma are sold as fresh fruit. The rest of the fresh golden berries are further processed into glazed fruit, nectar or concentrate.

Golden berries are especially difficult to preserve in the hot season after they are picked and usually perish within one week after harvest. To achieve longer shelf life, we keep the fresh fruit in ice houses before we pack them with preservative packing. With these measures, our products can generally remain fresh after long distance transportation and have at least one week longer of shelf life than other similar products in the market.

Beverage and others

Beverage

Beverages are not our principal products and accounted for approximately 12% of our total revenue in fiscal year 2008 which is expected to drop to approximately 6% in fiscal year 2010. Beverage products usually require large capital for advertising and other sales and marketing efforts. We believe we can generate more profits by focusing on our primary high-end premium products.

We have a beverage production line with a capacity of 10,800 tons and produce two brands of beverage.

• Beverage "Fu": "Fu" means "good luck" in Chinese. Beverage "Fu" is a fruit juice beverage produced from our golden berry concentrate. Beverage "Fu" is mainly sold to the wholesales market through our distributors and is commonly consumed in wedding and festival banquets as a "lucky" drink.

• Beverage "The World of Legend": Beverage "The World of Legend" is a fruit juice beverage produced from apple juice that we purchase from third party vendors. Beverage "The World of Legend" is mainly sold in internet bars. "The World of Legend" is the brand name of a popular online game in China. We have a three-year license agreement with Shanghai Shanda Xin Hua Interactive Entertainment Co., Ltd., or Shanda, the developer of the game, to use "The World of Legend" as the brand of our beverage. Pursuant to the agreement, we pay Shanda an annual base royalty ranging from approximately $0.14 million (RMB 1 million) in 2006 to approximately $0.21 million (RMB 1.44 million) in 2008. In addition, if our sales volume exceeds certain amount, we pay an additional royalty equal to 3% of revenue generated from such extra sales. The term of the license agreement expires on December 14, 2008. We have been phasing out the use of "The World of Legend" and launched our own brand "The Legend of Network" since May 2008.

Others

Since fiscal year 2008, due to demand from our distributors, we started to distribute apple concentrate products and pear concentrate products. These concentrate products are processed by third party vendors according to our technical requirements and standards.

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New products under development

We plan to further diversify our product mix to cater to different customer tastes and preferences. Currently, we have four new products under development.

• Glazed blueberry;

• Blackcurrant concentrate;

• Sea buckthorn concentrate; and

• Golden berry extracts

We expect to complete the development of the first three new products by August 2008 and the golden berry extracts by September 2009.

PRODUCTION

Production Facility

Our primary production facility is located in Daqing, Heilongjiang province, which started production in 2004. The facility is located on a 24,127-square-meter tract where we have land use rights until May 2055 and encompasses approximately 5,998 square meters of plant and warehouse space. We also have leased office space in Beijing covering approximately 193 square meters. We are building another processing facility in Mu Dan Jiang, Helongjiang province, which is expected to be operational by August 2008.

We currently own and operate three fruit processing lines with an aggregate processing capacity of 9,960 tons and one beverage production line with a processing capacity of 10,800 tons. The average utilization rate of our three fruit processing lines was approximately 96.7% in fiscal year 2008. Since fresh fruits are difficult to preserve in the hot season, we generally keep zero stock of fresh fruits during our production. We believe the current utilization rate of the three fruit processing lines is the highest rate we can achieve given the zero stock. The utilization rate of our beverage production line was approximately 69.4% in fiscal year 2008 and still has surplus capacity for future growth.

Other than our beverage production line, our production is mainly conducted from mid July to mid November each year because our primary source fruits are typically harvested during that time and must be processed right away. Our beverage production line runs the entire year since the raw material of beverages are mainly fruit juices that are available all seasons.

To meet the expected growth of our business and to broaden our product portfolio, we plan to add one fruit processing line in our Daqing facility and four more fruit processing lines in Mu Dan Jiang facility. The following table sets forth the new production lines' expected production commencement date, location, the capacity of each new production line, and the aggregate capacity of each of our main product lines after such expansion.

New Production Lines	Location	Expected Production Commencement Date	Processing Capacity (tons)	Aggregate Processing Capacity after Expansion (tons)
Concentrate	Mu Dan Jiang	August 2008	6,000	9,960
Glazed fruit	Daqing	September 2008	1,200	2,400
Nectar	Mu Dan Jiang	July 2009	4,800	9,600
Concentrate	Mu Dan Jiang	July 2010	6,000	15,960
Glazed fruit	Mu Dan Jiang	July 2010	1,200	3,600
Total			19,200	29,160

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Production Process

The processing of our fruit concentrate, nectar and glazed fruit begins with the collection of fresh fruits from fruit farmers. Fresh fruits are first sorted and washed after arriving in our facility. Clean fresh fruits then go through the following processes to be made into different products.

• Nectar: crush fresh fruits into tiny granules – beat crushed fruits into raw nectar – homogenize raw nectar in a blending tank – pasteurise and sterilize the raw nectar – fill aseptic bags with sterilized nectar.

• Fruit concentrate: crush and beat fresh fruits into mashes – press fruit mashes until fruit juice comes out – mix raw fruit juice with proper amount of compound enzyme to remove pectin and starch – filter concentrate fruit juice in three-way concentrators to achieve the target content of soluble solids, acidity and other quality standards – fill the aseptic bags with concentrates.

• Glazed fruit: separate fresh fruits into different grades – go through needling machine to get the fruits needled at the surface – blanch needled fruits in a blanching boiler – evacuate the air from fruits – soak evacuated fruits in sugar solution in a sugaring tank – bake sugared fruits in a group of tunnel dryers.

Quality Control

We place primary importance on quality. Our production facility has ISO 9001 and HACCP series qualifications. We have established quality control and food safety management system for the purchase of raw materials, fruit processing, packaging, storage and distribution. We have also adopted internal quality standards that we believe are stricter than the standards mandated by the PRC government. We have a 17-person quality control team to closely monitor and test the quality of our products to ensure compliance with these standards.

High quality raw materials are crucial to the production of quality fruit products. Therefore, we rigorously examine and test fresh fruits arriving at our plant. Any fruits that fail to meet our quality standard will be rejected. We perform routine product inspection and sample testing at our production facility and adhere to strict hygiene standards. For example, every employee involved in production is required to change into specially made clothes, wear working caps and shoes. No one is allowed to enter our production room unless he or she is directly involved in the production process.

All of our products undergo inspection at each stage of the production process, as well as post production inspection and final checking before distribution for sales. Products in storage or in the course of distribution are also subject to regular quality testing.

RAW MATERIALS AND SUPPLIERS

Raw Materials

Our business depends on maintaining a regular and adequate supply of high-quality raw material. The principal raw materials for our production are fresh fruits, which accounted for approximately 73% of our total costs of sales in fiscal year 2008. Our facility is strategically located in Heilongjiang province, where abundant supply of source fruits is available. In 2007, the total estimated output of golden berry, crab apple, blueberry and raspberry in Heilongjiang province was approximately 200,000 tons, 700,000 tons, 200,000 tons and 100,000 tons, respectively, representing approximately 98%, 61%, 90% and 70% of its respective total output in China. The close proximity of our facility to the orchards enables us to acquire sufficient fresh fruits with lower logistics costs. Our other raw materials mainly include packing materials (e.g. aseptic bags) and auxiliary materials (e.g. sugar and additives) that are widely available on the market.

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Suppliers and Supply Arrangements

We employ different procurement strategies to support our rapid growth based on the source fruit type. We coordinate primarily with the local government for the supply of golden berries and rely on a large group of agents for the supply of other source fruits.

Golden berries in Heilongjiang are mainly grown in four fruit farm bases where a large amount of individual farmers plant golden berries in their own lands. Our estimated annual output of golden berries at these four fruit farm bases is approximately 100,000 tons, accounting for approximately 50% of the total output of golden berries in Heilongjiang province. Our processing volume of golden berry (including those sold as fresh fruits) in fiscal year 2008 was approximately 25,000 tons. We currently purchase a majority of our golden berry from two of these fruit farm bases, namely Hailun Base and Nehe Base. Since it is too costly to purchase fresh fruits from each individual farmer, we coordinate with the local governments who play a critical role in planning and coordinating the overall fruit planting activities of individual farmers in the bases.

We normally sign written cooperative agreements with the local governments of Hailun Base and Nehe Base at the beginning of each year, which generally has a one-year term. The agreement typically sets forth the total quantity of golden berry to be purchased by us and a predetermined minimum price. The local governments, through their offices located in every village of the farm bases, deliver the demand information to individual farmers and coordinates corresponding planting activities. In the picking season, we submit our daily request of golden berries to the local governments, who then instruct the farmers to deliver fresh fruits to our plant on a timely basis. The final purchase price is based on the prevailing market price, but no lower than the predetermined minimum price. This arrangement cuts down our procurement costs significantly and allows the local governments to protect and maximize individual farmer's interest. After years of cooperation with the local governments of these two farm bases, we believe we have a solid and exclusive relationship with them which allows us to have a stable supply of golden berries on commercially reasonable terms.

We purchase other source fruits, including blueberry, crab apple and raspberry, primarily from agents. Since there is no centralized farm base for these fruits, their supply is scattered which makes it costly and infeasible to source them directly from individual farmers. As an alternative, we have developed a large group of agents who purchase fruits from the local farmers, then sell them to us. Our sourcing staffs maintain close communication with our agents to ensure their efficiency and loyalty. Our sourcing staff also spends a lot of time to keep developing new agents in the planting area of these fruits. We believe we have established an effective and loyal group of agents who are able to provide us with sufficient fresh fruits to support our rapid annual growth.

MARKETING, SALES AND DISTRIBUTION

Sales and Distribution

We currently sell all our products directly to 68 regional distributors across 19 provinces and 39 cities in China who then sell the products to various customers, including food processors, supermarkets and wholesale stores. As of March 31, 2008, our sales team consisted of 17 experienced employees. We divide the national market into six regions and assign each region a sales team. Northern China is currently our biggest market, accounting for approximately 49% of our total revenue in fiscal year 2008.

We generally require our distributors to pay the full purchase price in cash before we deliver the products. We also offer credit for our products to selected existing distributors with long-term business relationships and excellent credit records. The credit term is generally one month. We utilize different pricing policies based on the type of source fruit. For golden berry based products, we price our products based on raw material costs to ensure stable profit margin. We believe that we are the largest golden berry processor in China and the only processor in Northeast China which allows us to have strong pricing power. For products based on other source fruits, we price our products with reference to the prevailing market price.

Distributors normally have distribution rights to sell our products within a defined territory. We typically enter into a one-year contract with each of our distributors at the beginning of the year. The contract generally requires a 15-day notice of the purchase amount prior to the required delivery date. We have the right to supervise and monitor distributors' sale of our products. We generally have a no return policy. According to our standard distribution agreement, we are liable for any loss resulted from a quality problem only if the distributor provides certification from relevant authorities. However, distributors will bear any losses caused by their negligence in the storage of the products. We offer no sales rebates or rewards to our distributors.

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We believe we maintain stable relationships with our distributors, and many of them have been our distributors for more than three years. Our top ten distributors accounted for approximately 63.8% and 64.1% of our total revenue in fiscal years 2008 and 2007, respectively. Our biggest distributor Beijing Huapeng Food Co., Ltd. accounted for approximately 13.8% and 14.5% of total revenue in fiscal years 2008 and 2007, respectively. No other distributors accounted for more than 10% of our total revenue in fiscal year 2008.

Marketing

As of March 31, 2008, we have five experienced marketing personnel who are responsible for market research, promotion and advertisement. We strengthen our market presence through various types of market campaigns. We participate in several domestic and international trade fairs, such as China National Sugar and Alcoholic Commodities Fair and International China Harbin Fair for Trade and Economic Cooperation. These trade fairs help to promote our reputation and name recognition in the industry.

OUR COMPETITION

Since we process premium specialty fruits grown in Northeast China, we face little direct competition from the processors of common fruits or broad-based food processors. Our main competitors are local fruit processors that offer products similar to ours. Most of our competitors are small-sized local processors and generally processes of only one or two types of premium specialty fruits. Compared to these competitors, we believe we have more diversified products, higher production capacity and greater resources. Our major competitors in China include Dalian Xinlian Food Company, Shandong Longkou Fudi Food Co. Ltd., Zhalantun Changzheng Beverage Factory and Muxing Quick Frozen Food Factory.

RESEARCH AND DEVELOPMENT

Our research and development activities focus on new product development for new premium specialty fruits and quality improvement. We currently have five employees dedicated to research and development. We also cooperate with Heilongjiang Ba Yi Land Reclamation University ("HLAU"), one of the earliest agriculture universities in China. Since 2004, our company and HLAU have cooperatively completed the development of six new products, four of which are now our principal products. On March 7, 2008, we entered into a technology cooperation agreement with HLAU to develop several new products, including glazed blueberry, blackcurrant concentrate, seabuckthorn concentrate and golden berry extracts. Under the agreement, we will provide a total amount of approximately $25,670 (RMB 180,000) to HLAU for the development of the new products and all intellectual property rights of the new products belong to our company.

INTELLECTUAL PROPERTY

All of our product formulations are proprietary. We have not registered or applied for protections in China for most of our intellectual property or proprietary technologies relating to the formulations of our products. See "Risk factors—Risks Related to Our Business— Our inability to protect our trademarks, patent and trade secrets may prevent us from successfully marketing our products and competing effectively." Although we believe that, as of today, patents and copyrights have not been essential to maintaining our competitive market position, we intend to assess appropriate occasions in the future for seeking patent and copyright protections for those aspects of our business that provide significant competitive advantages.

We sell our fruit concentrate, glazed fruit and nectar products under the brand of "农珍之冠". Our chairman Changjun Yu has registered the trademark for "农珍之冠" in class 32 with the Trademark Office of the State Administration for Industry and Commerce of China, or the Trademark Office. He has applied the trademark for "农珍之冠" in class 29 which application has been accepted by the Trademark Office. In May 2008, Mr. Yu agreed to transfer the trademarks for "农珍之冠" in both class 29 and class 32 to our company for a consideration of RMB 1 for each trademark and granted us the exclusive right to use such trademarks before the transfer was approved by the Trademark Office. We have filed the application for such transfer with the Trademark office. If the approval is granted, we will have all the legal rights for such trademark, the term of which expires in 2018.

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We also filed an application for the trademark "The Legend of Network" with the Trademark Office in May 2008. The application has been accepted by the Trademark Office.

We rely on trade secret protection and confidentiality agreements to protect our proprietary information and know-how. Our management and each of our research and development personnel have entered into a standard annual employment contract, which includes a confidentiality clause and a clause acknowledging that all inventions, designs, trade secrets, works of authorship, developments and other processes generated by them on our behalf are our property, and assigning to us any ownership rights that they may claim in those works. Despite our precautions, it may be possible for third parties to obtain and use, without our consent, intellectual property that we own or are licensed to use. Unauthorized use of our intellectual property by third parties, and the expenses incurred in protecting our intellectual property rights, may adversely affect our business. See "Risk factors—Risks Related to Our Business—Failure to adequately protect our intellectual property rights may undermine our competitive position, and litigation to protect our intellectual property rights may be costly."

REGULATION

The food industry, of which fruit based products form a part, is subject to extensive regulation in China. This following summarizes the most significant PRC regulations governing our business in China.

Food Hygiene and Safety Laws and Regulations

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

• the PRC Product Quality Law;

• the PRC Food Hygiene Law;

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

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

• the General Measure on Food Quality Safety Market Access Examination;

• the General Standards for the Labeling of Prepackaged Foods;

• the Standardization Law;

• the Regulation on Hygiene Administration of Food Additive;

• the Regulation on Administration of Bar Code of Merchandise;

• and the PRC Metrology Law.

These laws and regulations set out safety and hygiene standards and requirements for various aspects of food production, such as the use of additives, production, packaging, handling, labeling and storage, as well as facilities and equipment. Failure to comply with these laws and regulations may result in confiscation of our products and proceeds from the sales of non-compliant products, destruction of our products and inventory, fines, suspension of production and operation, product recalls, revocation of licenses, and, in extreme cases, criminal liability.

Environmental Regulations

We are subject to various governmental regulations related to environmental protection. The major environmental regulations applicable to us include:

• the Environmental Protection Law of the PRC;

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

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

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

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

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

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

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

ENVIRONMENTAL MATTERS

Our manufacturing facilities are subject to various pollution control regulations with respect to noise, water and air pollution and the disposal of waste and hazardous materials. We are also subject to periodic inspections by local environmental protection authorities. Our operating subsidiary has received certifications from the relevant PRC government agencies in charge of environmental protection indicating that their business operations are in material compliance with the relevant PRC environmental laws and regulations. We are not currently subject to any pending actions alleging any violations of applicable PRC environmental laws.

OUR EMPLOYEES

As of March 31, 2008, we employed a total of 496 full-time employees. The following table sets forth the number of our employees by function as of March 31, 2008.

Senior Management	8
Human resource & Administration.	35
Production	364
Procurement	3
Marketing	4
Sales	17
Logistic	36
Research & Development	5
Quality Control	17
Accounting	7
Total	496

Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We have not experienced any work stoppages.

We are required under PRC law to make contributions to the employee benefit plans at specified percentages of the after-tax profit. In addition, we are required by the PRC law to cover employees in China with various types of social insurance. We believe that we are in material compliance with the relevant PRC laws.

SEASONALITY

As is typical in the fruit processing industry, we experience seasonality in our business. Except for the beverage production line which runs for the full year, our fruit processing lines are mainly carried out from mid July to mid November each year because our primary source fruits are typically harvested during that period and must be processed right away. In fiscal year 2008, sales during the second and third fiscal quarters accounted for approximately 69.3% of our total sales revenue. As a result of seasonality, our personnel, working capital requirements, cash flow and inventories vary substantially throughout the year.

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INSURANCE

We have property insurance for our facility located in Daqing. We believe our insurance coverage is customary and standard for companies of comparable size in comparable industries in China.

We do not have any business liability, interruption or litigation insurance coverage for our operations in China. Insurance companies in China offer limited business insurance products. While business interruption insurance is available to a limited extent in China, we have determined that the risks of interruption, cost of such insurance and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. Therefore, we are subject to business and product liability exposure. See "Risk Factors – We have limited insurance coverage and do not carry any business interruption insurance, third-party liability insurance for our production facilities or insurance that covers the risk of loss of our products in shipment."

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this report, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should read the section entitled "Special Notes Regarding Forward-Looking Statements" immediately following these risk factors for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this report.

RISKS RELATED TO OUR BUSINESS

Any ill effects, product liability claims, recalls, adverse publicity or negative public perception regarding particular fruits we use as raw materials, our products or our industry in general could harm our sales and cause consumers to avoid our products.

The food industry is subject to risks posed by food spoilage and contamination, product tampering, product recall, and consumer product liability claims. Our operations could be impacted by both genuine and fictitious claims regarding our and our competitors' products. In the event of product contamination or tampering, we may need to recall some of our products. A widespread product recall could result in significant loss due to the cost of conducting a product recall including destruction of inventory and the loss of sales resulting from the unavailability of the product for a period of time.

In addition, any adverse publicity or negative public perception regarding particular fruits we use as raw materials, our products, our actions relating to our products, or our industry in general could result in a substantial drop in demand for our products. This negative public perception may include publicity regarding the safety or quality of particular fruits we use as raw materials or products in general, of other companies or of our products specifically. Negative public perception may also arise from regulatory investigations or product liability claims, regardless of whether those investigations involve us or whether any product liability claim is successful against us. We could also suffer losses from a significant product liability judgment against us. Either a significant product recall or a product liability judgment, involving either our company or our competitors, could also result in a loss of consumer confidence in our products or the food category, and an actual or perceived loss of value of our brands, materially impacting consumer demand.

Our business and financial results depend on maintaining a consistent and cost-effective supply of source fruits. Any interruption in our supply of source fruits could materially and adversely affect our results of operations, financial condition and business prospects.

The availability, size, quality and cost of source fruits for the production of our products are subject to risks inherent to farming, such as crop size, quality, and yield fluctuation caused by poor weather and growing conditions, pest and disease problems, and other factors beyond our control. Because cost for source fruits currently represents approximately 73% of our total cost of revenue in fiscal year 2008, we are particularly vulnerable to crop diseases or other events that could cause significant fluctuations in the availability and cost of the source fruits we use as raw materials. The prices of our fresh source fruits and other raw materials are generally determined by the market, and may change at any time. Increases in prices for any of these raw materials could have a material adverse impact on our ability to achieve profitability.

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Currently, we source our fresh golden berry primarily from two fruit farm bases pursuant to cooperation agreements with local governments and other source fruits from agents who collect fruits from individual farmers. While we believe that we have adequate sources of raw materials and that we in general maintain good supplier relationships, if we are unable to continue to find adequate suppliers for our raw materials on economic terms acceptable to us, it will adversely affect our results of operations, financial condition and business prospects.

Product liability claims against us could result in adverse publicity and potentially significant monetary damages.

As with other food producers, we are also exposed to risks associated with product liability claims if the consumption of our products results in injury or death. We cannot predict what impact such product liability claims or resulting negative publicity would have on our business or on our brand image. The successful assertion of product liability claims against us could result in potentially significant monetary damages, diversion of management resources and require us to make significant payments and incur substantial legal expenses. We do not have product liability insurance and have not made provisions for potential product liability claims. Therefore, we may not have adequate resources to satisfy a judgment if a successful claim is brought against us. Even if a product liability claim is not successfully pursued to judgment by a claimant, we may still incur substantial legal expenses defending against such a claim. Finally, serious product quality concerns could result in governmental action against us, which, among other things, could result in the suspension of production or distribution of our products, loss of certain licenses, or other governmental penalties.

We compete in an industry that is brand-conscious, and unless we are able to establish and maintain brand name recognition our sales may be negatively impacted.

Our business is substantially dependent upon awareness and market acceptance of our products and brand by our targeted consumers. In addition, our business depends on acceptance by our independent distributors and consumers of our brand. Although we believe that we have made progress towards establishing market recognition for our brand "农珍之冠" in the Chinese fruit products industry, it is too early in the product life cycle of the brand to determine whether our products and brand will achieve and maintain satisfactory levels of acceptance by independent distributors and retail consumers.

We compete in an industry characterized by rapid changes in consumer preferences, so our inability to continue developing new products to satisfy our consumers' changing preferences would have a material adverse effect on our sales volumes.

Our products are processed from premium specialty fruits and sell at a high price. A decline in the consumption of our products could occur as a result of a change in consumer preferences, perceptions and spending habits at any time. Future success will depend partly on our ability to anticipate or adapt to such changes and to offer, on a timely basis, new products that meet consumer preferences. Our failure to adapt our product offering to respond to such changes may result in reduced demand and lower prices for our products, resulting in a material adverse effect on our sales volumes, sales and profits.

Our current market distribution and penetration is limited as compared with the potential market and so our initial views as to customer acceptance of a particular product can be erroneous, and there can be no assurance that true market acceptance will ultimately be achieved. In addition, customer preferences are also affected by factors other than taste. If we do not adjust to respond to these and other changes in customer preferences, our sales may be adversely affected.

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We rely primarily on third-party distributors, this could affect our ability to efficiently and profitably distribute and market our products, maintain our existing markets and expand our business into other geographic markets.

We do not sell our products directly to our end customers. Instead, we primarily rely on third-party distributors for the sale and distribution of our products. We sell our products through an extensive nationwide sales and distribution network covering 19 provinces and 39 cities in China. As of March 31, 2008, this network comprised 68 distributors. We typically do not enter into long-term agreements with distributors and have no control over their everyday business activities. To the extent that our distributors are distracted from selling our products or do not expend sufficient efforts in managing and selling our products, our sales will be adversely affected. Our ability to maintain our distribution network and attract additional distributors will depend on a number of factors, many of which are outside our control. Some of these factors include: (i) the level of demand for our brand and products in a particular distribution area; (ii) our ability to price our products at levels competitive with those offered by competing products and (iii) our ability to deliver products in the quantity and at the time ordered by distributors.

There can be no assurance that we will be able to meet all or any of these factors in any of our current or prospective geographic areas of distribution. Furthermore, shortage of adequate working capital may make it impossible for us to do so. Our inability to achieve any of these factors in a geographic distribution area will have a material adverse effect on our relationships with our distributors in that particular geographic area, thus limiting our ability to maintain and expand our market, which will likely adversely effect our revenues and financial results.

We generally do not have long-term agreements with our distributors, and we may need to spend significant time and incur significant expense in attracting and maintaining key distributors.

Our marketing and sales strategy presently, and in the future, will rely on the performance of our independent distributors and our ability to attract additional distributors. We generally have one-year written agreements with our distributors which are renewable at the beginning of every year. In addition, despite the terms of the written agreements with certain of our significant distributors, we have no assurance as to the level of performance under those agreements, or that those agreements will not be terminated. There is also no assurance that we will be able to maintain our current distribution relationships or establish and maintain successful relationships with distributors in new geographic distribution areas. Moreover, there is the additional possibility that we will have to incur significant expenses to attract and maintain key distributors in one or more of our geographic distribution areas in order to profitably exploit our geographic markets. We may not have sufficient working capital to allow us to do so.

Failure to execute our business expansion plan could adversely affect our financial condition and results of operations.

We plan to add five new fruit processing lines by 2010 to meet an expected increase in demand for our products. Our decision to increase our production capacity was based in part on our projections of increases in our sales volume and growth in the size of the premium specialty fruit based product market in China. If actual customer demand does not meet our projections, we will likely suffer overcapacity problems and may have to leave capacity idle, which may reduce our overall profitability and adversely affect our financial condition and results of operations. Our future success depends on our ability to expand our business to address growth in demand for our current and future products. Our ability to add production capacity and increase output is subject to significant risks and uncertainties, including:

• the unavailability of additional funding to expand our production capacity, build a new facility in Mu Dan Jiang, purchase additional fixed assets and purchase raw materials on favorable terms or at all;

• delays and cost overruns as a result of a number of factors, many of which may be beyond our control, such as problems with equipment vendors and suppliers of raw materials;

• failure to maintain high quality control standards;

• shortage of source fruits;

• our inability to obtain, or delays in obtaining, required approvals by relevant government authorities;

• diversion of significant management attention and other resources; and

• failure to execute our expansion plan effectively.

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As our business grows, we will need to implement a variety of new and upgraded operational and financial systems, procedures and controls, including improvements to our accounting and other internal management systems by dedicating additional resources to our reporting and accounting functions, and improvements to our record keeping and contract tracking system. We will need to respond to competitive market conditions and continue to enhance existing products and develop new products, and retain existing customers and attract new customers. We will also need to recruit more personnel and train and manage our growing employee base. Furthermore, we will need to maintain and expand our relationships with our current and future customers, suppliers, distributors and other third parties, and there is no guarantee that we will succeed.

If we encounter any of the risks described above, or are otherwise unable to establish or successfully operate additional production capacity or to increase production output, we may be unable to grow our business and revenues, reduce our operating costs, maintain our competitiveness or improve our profitability, and our business, financial condition, results of operations and prospects may be adversely affected.

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

Our business is highly seasonal, reflecting the harvest season of our primary source fruits during the months from mid July to mid November. Typically, a substantial portion of our revenues are earned during our second and third fiscal quarters. We generally experience lowest revenues during our first fiscal quarter. Sales in the second and third fiscal quarters accounted for approximately 69.3% of our revenues for fiscal year ended March 31, 2008. If sales in these quarters are lower than expected, our operating results would be adversely affected, and it would have a disproportionately large impact on our annual operating results.

Due to our rapid growth in recent years, our past results may not be indicative of our future performance and evaluating our business and prospects may be difficult.

Our business has grown and evolved rapidly in recent years as demonstrated by our growth in net sales for the fiscal year ended March 31, 2008 to $34.5 million, from $23.0 million for the prior fiscal year. We may not be able to achieve similar growth in future periods, and our historical operating results may not provide a meaningful basis for evaluating our business, financial performance and prospects. Moreover, our ability to achieve satisfactory production results at higher volumes is unproven. Therefore, you should not rely on our past results or our historical rate of growth as an indication of our future performance.

We depend heavily on key personnel, and turnover of key employees and senior management could harm our business.

Our future business and results of operations depend in significant part upon the continued contributions of our key technical and senior management personnel, including Changjun Yu, our Chairman, Jinglin Shi, our Chief Executive Officer, Colman Cheng, our Chief Financial Officer, and Manjiang Yu, our Vice President of Sales. None of these key management members currently owns any shares of common stock or any other equity interest in the Company. Although they have signed employment agreements with our subsidiary Fezdale which include a non-competition provision which prohibits them from engaging in the food processing industry during the term of the agreement and for two years after the termination of employment, such employment agreements can be terminated at will. If we lose any of these key employees and are unable to find a qualified replacement in a timely manner, our business will be negative impacted. In addition, if a key employee fails to perform in his or her current position, or if we are not able to attract and retain skilled employees as needed, our business could suffer. Significant turnover in our senior management could significantly deplete the institutional knowledge held by our existing senior management team. We depend on the skills and abilities of these key employees in managing the reclamation, technical, and marketing aspects of our business, any part of which could be harmed by turnover in the future.

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The concentration of ownership of our securities by our controlling stockholder who does not participate in the management of our business can result in stockholder votes that are not in our best interests or the best interests of our minority stockholders.

Mr. Yiu Fai Kung and Mr. Kwan Mo Ng, own approximately 86.59% of our outstanding voting securities, giving them controlling interest in the Company. However, neither Mr. Kung nor Mr. Ng is an executive officer or director of the Company and is not a participant in any way in the day to day affairs of the Company. Mr. Kung and Mr. Ng may have little or no knowledge of the details of the Company's operations and do not participate in the corporate governance of the Company. In addition, this concentration of ownership may also have the effect of discouraging, delaying or preventing a future change of control, which could deprive our stockholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our shares.

Our inability to protect our trademarks, patent and trade secrets may prevent us from successfully marketing our products and competing effectively.

Failure to protect our intellectual property could harm our brands and our reputation, and adversely affect our ability to compete effectively. Further, enforcing or defending our intellectual property rights, including our trademarks, patents, copyrights and trade secrets, could result in the expenditure of significant financial and managerial resources. We produce, market and sell our products under " ｿV･." We regard our intellectual property, particularly our trademarks and trade secrets to be of considerable value and importance to our business and our success. We rely on a combination of trademark, patent, and trade secrecy laws, and contractual provisions to protect our intellectual property rights. There can be no assurance that the steps taken by us to protect these proprietary rights will be adequate or that third parties will not infringe or misappropriate our trademarks, trade secrets (including our flavor concentrate trade secrets) or similar proprietary rights. In addition, there can be no assurance that other parties will not assert infringement claims against us, and we may have to pursue litigation against other parties to assert our rights. Any such claim or litigation could be costly and we may lack the resources required to defend against such claims. In addition, any event that would jeopardize our proprietary rights or any claims of infringement by third parties could have a material adverse affect on our ability to market or sell our brands, and profitably exploit our products.

We may be exposed to potential risks relating to our internal controls over financial reporting and our ability to have those controls attested to by our independent auditors.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002 or SOX 404, the SEC adopted rules requiring public companies to include a report of management on the company's internal controls over financial reporting in their annual reports, including Form 10-K. In addition, the independent registered public accounting firm auditing a company's financial statements must also attest to the operating effectiveness of the company's internal controls. Since we just completed the acquisition of Fezdale on August 14, 2008, we have not evaluated Fezdale and its consolidated subsidiary' internal control systems in order to allow our management to report on, and our independent auditors to attest to, our internal controls on a consolidated basis as required by these requirements of SOX 404. Under current law, we were subject to these requirements beginning with our annual report for the fiscal year ending March 31, 2008, although the auditor attestation is not required until our annual report for the fiscal year ending March 31, 2010 assuming our filing status remains as a smaller reporting company. We can provide no assurance that we will comply with all of the requirements imposed thereby. There can be no positive assurance that we will receive a positive attestation from our independent auditors. In the event we identify significant deficiencies or material weaknesses in our internal controls that we cannot remediate in a timely manner or we are unable to receive a positive attestation from our independent auditors with respect to our internal controls, investors and others may lose confidence in the reliability of our financial statements.

We have limited insurance coverage and do not carry any business interruption insurance, third-party liability insurance for our production facilities or insurance that covers the risk of loss of our products in shipment.

Operation of our facilities involves many risks, including equipment failures, natural disasters, industrial accidents, power outages, labor disturbances and other business interruptions. Furthermore, if any of our products are faulty, then we may become subject to product liability claims or we may have to engage in a product recall. We do not carry any business interruption insurance, product recall or third-party liability insurance for our production facilities or with respect to our products to cover claims pertaining to personal injury or property or environmental damage arising from defects in our products, product recalls, accidents on our property or damage relating to our operations. Therefore, our existing insurance coverage may not be sufficient to cover all risks associated with our business. As a result, we may be required to pay for financial and other losses, damages and liabilities, including those caused by natural disasters and other events beyond our control, out of our own funds, which could have a material adverse effect on our business, financial condition and results of operations.

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We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.

We are subject to the Foreign Corrupt Practice Act (the "FCPA"), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We have operations, agreements with third parties and make sales in China, which may experience corruption. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants, sales agents or distributors of our company, because these parties are not always subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. Also, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

RISKS RELATED TO DOING BUSINESS IN CHINA

Adverse changes in political and economic policies of the PRC government could impede the overall economic growth of China, which could reduce the demand for our products and damage our business.

We conduct substantially all of our operations and generate most of our revenue in China. Accordingly, our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments in China. The PRC economy differs from the economies of most developed countries in many respects, including:

• a higher level of government involvement;

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

• a rapid growth rate;

• a higher level of control over foreign exchange;

• and the allocation of resources.

As the PRC economy has been transitioning from a planned economy to a more market-oriented economy, the PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. While these measures may benefit the overall PRC economy, they may also have a negative effect on us.

Although the PRC government has in recent years implemented measures emphasizing the utilization of market forces for economic reform, the PRC government continues to exercise significant control over economic growth in China through the allocation of resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and imposing policies that impact particular industries or companies in different ways.

Any adverse change in economic conditions or government policies in China could have a material adverse effect on the overall economic growth in China, which in turn could lead to a reduction in demand for our services and consequently have a material adverse effect on our business and prospects.

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PRC food hygiene and safety laws may become more onerous, which may adversely affect our operations and financial performance and lead to an increase in our costs which we may be unable to pass on to our customers.

Operators within the PRC fruit processing industry are subject to compliance with PRC food hygiene and safety laws and regulations. Such laws and regulations require all enterprises engaged in the production of fruit based products to obtain a hygiene license. They also set out hygiene standards with respect to food and food additives, packaging and containers, labeling on packaging as well as hygiene requirements for food production and sites, facilities and equipment used for the transportation and the sale of food. Failure to comply with PRC food hygiene and safety laws may result in fines, suspension of operations, loss of hygiene license and, in certain cases, criminal proceedings against an enterprise and its management. Although we are in compliance with current PRC food hygiene and safety laws and regulations, in the event that such laws and regulations become more stringent or widen in scope, we may fail to comply with such laws, or if we comply, our production and distribution costs may increase, and we may be unable to pass these additional costs on to our customers.

Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us.

We conduct substantially all of our business through our operating subsidiary in the PRC. Our operating subsidiary is generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based on written statutes, and prior court decisions may be cited for reference but have limited precedential value. Since 1979, a series of new PRC laws and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. In addition, all of our executive officers and all of our directors are residents of China and not of the United States, and substantially all the assets of these persons are located outside the United States. As a result, it could be difficult for investors to affect service of process in the United States or to enforce a judgment obtained in the United States against our Chinese operations and subsidiary.

If we are found to have failed to comply with applicable laws, we may incur additional expenditures or be subject to significant fines and penalties.

Our operations are subject to PRC laws and regulations applicable to us. However, many PRC laws and regulations are uncertain in their scope, and the implementation of such laws and regulations in different localities could have significant differences. In certain instances, local implementation rules and/or the actual implementation are not necessarily consistent with the regulations at the national level. Although we strive to comply with all the applicable PRC laws and regulations, we cannot assure you that the relevant PRC government authorities will not later determine that we have not been in compliance with certain laws or regulations.

In addition, our facilities and products are subject to many laws and regulations administered by the PRC State Administration for Industry and Commerce, the PRC State Administration of Taxation, the PRC Ministry of Health and Hygiene Permitting Office, the PRC General Administration of Quality Supervision, Inspection and Quarantine, and the PRC State Food and Drug Administration Bureau relating to the processing, packaging, storage, distribution, advertising, labeling, quality, and safety of food products. Our failure to comply with these and other applicable laws and regulations in China could subject us to administrative penalties and injunctive relief, as well as civil remedies, including fines, injunctions and recalls of our products. It is possible that changes to such laws or more rigorous enforcement of such laws or with respect to our current or past practices could have a material adverse effect on our business, operating results and financial condition. Further, additional environmental, health or safety issues relating to matters that are not currently known to management may result in unanticipated liabilities and expenditures.

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The PRC government exerts substantial influence over the manner in which we must conduct our business activities.

The PRC 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, import and export tariffs, 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 the jurisdictions in which we operate 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 or joint ventures.

Restrictions on currency exchange may limit our ability to receive and use our sales revenue effectively.

All our sales revenue and expenses are denominated in RMB. Under PRC law, the RMB is currently convertible under the "current account," which includes dividends and trade and service-related foreign exchange transactions, but not under the "capital account," which includes foreign direct investment and loans. Currently, our PRC operating subsidiary may purchase foreign currencies for settlement of current account transactions, including payments of dividends to us, without the approval of the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, the relevant PRC government authorities may limit or eliminate our ability to purchase foreign currencies in the future. Since a significant amount of our future revenue will be denominated in RMB, any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in RMB to fund our business activities outside China that are denominated in foreign currencies.

Foreign exchange transactions by our PRC operating subsidiary under the capital account continue to be subject to significant foreign exchange controls and require the approval of or need to register with PRC government authorities, including SAFE. In particular, if our PRC operating subsidiary borrows foreign currency through loans from us or other foreign lenders, these loans must be registered with SAFE, and if we finance the subsidiary by means of additional capital contributions, these capital contributions must be approved by certain government authorities, including the Ministry of Commerce, or MOFCOM, or their respective local counterparts. These limitations could affect their ability to obtain foreign exchange through debt or equity financing.

Fluctuations in exchange rates could adversely affect our business and the value of our securities.

The value of our common stock will be indirectly affected by the foreign exchange rate between U.S. dollars and RMB and between those currencies and other currencies in which our sales may be denominated. Because substantially all of our earnings and cash assets are denominated in RMB and the net proceeds from the PIPE transaction will be denominated in U.S. dollars, fluctuations in the exchange rate between the U.S. dollar and the RMB will affect the relative purchasing power of these proceeds, our balance sheet and our earnings per share in U.S. dollars following the PIPE transaction. In addition, appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue after the PIPE transaction that will be exchanged into U.S. dollars as well as earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

Since July 2005, the RMB has no longer been pegged to the U.S. dollar. Although the People's Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

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Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

Currently, some of our raw materials and major equipment are imported. In the event that the U.S. dollars appreciate against RMB, our costs will increase. If we cannot pass the resulting cost increases on to our customers, our profitability and operating results will suffer. In addition, if our sales to international customers grow, we will be increasingly subject to the risk of foreign currency depreciation.

Restrictions under PRC law on our PRC subsidiary's ability to make dividends and other distributions could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to you, and otherwise fund and conduct our businesses.

Substantially all of our revenues are earned by our PRC subsidiary. However, PRC regulations restrict the ability of our PRC subsidiary to make dividends and other payments to its offshore parent company. PRC legal restrictions permit payments of dividend by our PRC subsidiary only out of its accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiary is also required under PRC laws and regulations to allocate at least 10% of our annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of our registered capital. Allocations to these statutory reserve funds can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. Any limitations on the ability of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

Under the New EIT Law, we may be classified as a "resident enterprise" of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.

China passed a new Enterprise Income Tax Law, or the New EIT Law, and its implementing rules, both of which became effective on 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 Fashion Tech is a "resident enterprise" 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 proceeds from the PIPE transaction 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 subsidiary 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 future guidance issued with respect to the new "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. We are actively monitoring the possibility of "resident enterprise" treatment for the 2008 tax year and are evaluating appropriate organizational changes to avoid this treatment, to the extent possible.

If we were treated as a "resident enterprise" by PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be creditable against our U.S. tax.

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If the China Securities Regulatory Commission, or CSRC, or another PRC regulatory agency determines that CSRC approval is required in connection with the reverse acquisition of Fezdale or challenges the delayed payment of acquisition consideration by Solar Sun, the reverse acquisition may be unwound, or we may become subject to penalties.

On August 8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the "M&A Rule"), which became effective on September 8, 2006. The M&A Rule, among other things, requires that an offshore company controlled by PRC companies or individuals that have acquired a PRC domestic company for the purpose of listing the PRC domestic company's equity interest on an overseas stock exchange must obtain the approval of the CSRC prior to the listing and trading of such offshore company's securities on an overseas stock exchange. In addition, when an offshore company acquires a PRC domestic company, the offshore company is generally required to pay the acquisition consideration within three months after the issuance of the foreign-invested company license unless certain ratification from the relevant PRC regulatory agency is obtained. On September 21, 2006, the CSRC, pursuant to the M&A Rule, published on its official web site procedures specifying documents and materials required to be submitted to it by offshore companies seeking CSRC approval of their overseas listings.

In the opinion of our PRC counsel, Grandall Legal Group, the M&A Rule concerning the CSRC approval for acquisition of a PRC domestic company by an offshore company controlled by PRC companies or individuals does not apply to our reverse acquisition of Fezdale because none of Fashion Tech, Fezdale and Solar Sun is a "Special Purpose Vehicle" or an "offshore company controlled by PRC companies or individuals" as defined in the M&A Rule. Our PRC counsel, Grandall Legal Group, is also in the opinion that, even though Solar Sun did not pay the consideration for acquiring 75% interest in Longheda within three months after the issuance of the foreign-invested company license, since the relevant provincial agency has issued document indicating the authority's awareness of such delayed payment and Solar Sun has obtained the approval from local foreign exchange administrative department for the remittance of such payment into the PRC and made such payment, based on its experience, in practice, the chance that such delayed payment being challenged by PRC regulatory agencies is minimal. If the CSRC or another PRC governmental agency subsequently determines that we must obtain CSRC approval prior to the completion of the reverse acquisition or challenges the delayed payment by Solar Sun, the reverse acquisition may be unwound and we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China and limit our operating privileges in China, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our shares.

The M&A Rule establishes more complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.

The M&A Rule establishes additional procedures and requirements that could make some acquisitions of Chinese companies by foreign investors more time-consuming and complex, including requirements in some instances that the PRC Ministry of Commerce be notified in advance of any change-of-control transaction and in some situations, require approval of the PRC Ministry of Commerce when a foreign investor takes control of a Chinese domestic enterprise. In the future, we may grow our business in part by acquiring complementary businesses, although we do not have any plans to do so at this time. The M&A Rule also requires PRC Ministry of Commerce anti-trust review of any change-of-control transactions involving certain types of foreign acquirers. Complying with the requirements of the M&A Rule to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the PRC Ministry of Commerce, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

You may have difficulty enforcing judgments against us.

We are a Nevada holding company and most of our assets are located outside of the United States. Most of our current operations are conducted in the PRC. In addition, most of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in the United States and the substantial majority of whose assets are located outside of the United States. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts. Grandall Legal Group, our counsel as to PRC law, has advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. Courts in China may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other arrangements that provide for the reciprocal recognition and enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates basic principles of PRC law or national sovereignty, security or the public interest. So it is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States.

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RISKS RELATED TO THE MARKET FOR OUR STOCK GENERALLY

The market price of our common stock is volatile, leading to the possibility of its value being depressed at a time when you may want to sell your holdings.

The market price of our common stock is volatile, and this volatility may continue. Numerous factors, many of which are beyond our control, may cause the market price of our common stock to fluctuate significantly. In addition to market and industry factors, the price and trading volume for our common stock may be highly volatile for specific business reasons. Factors such as variations in our revenues, earnings and cash flow, announcements of new investments, cooperation arrangements or acquisitions, and fluctuations in market prices for our products could cause the market price for our shares to change substantially.

Securities class action litigation is often instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs to us and divert our management's attention and resources.

Moreover, the trading market for our common stock will be influenced by research or reports that industry or securities analysts publish about us or our business. If one or more analysts who cover us downgrade our common stock, the market price for our common stock would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which, in turn, could cause the market price for our common stock or trading volume to decline.

Furthermore, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies. These market fluctuations may adversely affect the price of our common stock and other interests in our company at a time when you want to sell your interest in us.

We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.

The SEC has adopted regulations which generally define so-called "penny stocks" to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. If our common stock becomes a "penny stock", we may become subject to Rule 15g-9 under the Exchange Act, or the "Penny Stock Rule". This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and "accredited investors" (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

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There can be no assurance that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

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

Our common stock is quoted on the OTC Bulletin Board. The OTC Bulletin Board is a significantly more limited market than the New York Stock Exchange or Nasdaq system. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.

Certain provisions of our Articles of Incorporation may make it more difficult for a third party to effect a change-of-control.

Our Articles of Incorporation authorizes the board of directors to issue up to 5,000,000 shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the board of directors without further action by the stockholders. These terms may include preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of such common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of the board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

OVERVIEW

We are a holding company and conduct all our operations through our indirect, wholly owned subsidiary Longheda, a leading producer of premium specialty fruit based products in China, specializing in developing, processing, marketing and distributing a variety of food products processed primarily from premium specialty fruits grown in Northeast China, including golden berry, crab apple, blueberry and raspberry. Our primary product offering includes fruit concentrate, nectar, glazed fruits, beverage as well as fresh fruits. We sell our products through an extensive nationwide sales and distribution network covering 19 provinces and 39 cities in China. As of March 31, 2008, this network was comprised of 68 distributors. Our processed fruit products are mainly sold to food producers for further processing into fruit juice and other fruit related foods, and our fresh fruits are mainly sold to fruit supermarkets. We currently operate from our manufacturing facility located in Daqing, Heilongjiang province, China where abundant supply of a variety of premium specialty fruits is available. We have three fruit processing lines with an aggregate capacity of 9,960 tons and one beverage production lines with a capacity of 10,800 tons.

Our sales revenue grew by 49.9% in the fiscal year ended March 31, 2008 to $34.5 million, from $23.0 million in the fiscal year ended March 31, 2007. Net income grew by 31.6% in the fiscal year ended March 31, 2008 to $10.0 million from $7.6 million in the fiscal year ended March 31, 2007. Our gross margin for the fiscal year ended March 31, 2008 was 45.1%.

Because our recent operations have been limited to the operations of Longheda, the discussion below of our performance is based upon the audited financial statements of Longheda for the fiscal years ended March 31, 2008 and 2007 included in this report.

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We have also filed the audited consolidated financial statements of Fezdale in this report. Since Fezdale and Solar Sun do not have any assets except their ownership of Longheda and such financial statements only reflects the consolidated financial results of Fezdale and its subsidiaries from Fezdale's incorporation on August 22, 2007 to March 31, 2008, we believe a discussion of Fezdale's consolidated financial statements does not provide a meaningful guidance of our financial results which might be indicative to our future financial results.

PRINCIPAL FACTORS AFFECTING OUR FINANCIAL PERFORMANCE

Our operating results are primarily affected by the following factors:

Growth of china's fruit processing industry. BBIC projects that the total sales value and net income of fruit processed products in China will reach $37.2 billion and $2.5 billion in 2010, or a growth of 42.52% and 66.67%, respectively, since 2007. We believe that the recent growth in fruit processed product consumption in China is largely attributable the increased affordability of fruit processed products in China due to China's economic growth and increased health and wellness consciousness. We expect these factors to continue to drive industry growth, especially in our primary markets – premium specialty fruit processed products. Such growth will not only increase the overall market size for fruit processed products, but will also benefit companies that are well positioned to sell in these markets.

Product offering and pricing. Fruit processed products has been, and is expected to remain, our primary product. Our fruit processing products contributed approximately 75.5% and 74.0% of our total net sales for years ended March 31, 2008 and 2007, respectively. The gross margin for our fruit processed products was approximately 48.6% for the fiscal year ended March 31, 2008 as compared to 34.3% for our beverage and other products. We plan to continue to focus on our higher margin fruit processed products in the future. Because we have a strong bargaining power on golden berry based products, we generally price our gold berry based products based on the raw material prices to ensure stable profit margin. We price our other products with reference to the prevailing market price.

Fluctuations in Raw Material Supply and Prices. The per unit costs of producing our products are subject to the supply and price volatility of raw materials, especially fresh fruits which are affected by factors such as weather, growing condition and pest that are beyond our control. Fresh fruits accounted for approximately 73% of our total cost of sales in fiscal year 2008. Historically, we have been able to meet our fresh fruit supply needs by building our processing facilities in close proximity to orchards and by collaborating with local government and establishing an effective group of agents. Increases in the price of fresh fruits would negatively impact our gross margins if we are not able to offset such price increases through increases in our selling price or change in product mix.

PRC government policy promoting the development of the fruit processing industry. In the PRC central government's eleventh five-year guideline, the central government emphasized its determination to solve the problems of farmers, boost modern agriculture and increase rural affluence. The PRC Ministry of Agriculture, or MOA, also stated its objective to improve the fruit processing ratio and fruit commercialization ratio. We believe that our business model is structured within the framework of these MOA initiatives and that government policies will continue to have a positive impact on the sale of our products.

Expansion of our production capacity. Expansion of our capacity is needed to satisfy increased demand for our products. The average utilization rate for our three fruit processing production lines was approximately 96.7% in fiscal year 2008. In order to increase our production capacity, we must make capital investment to build additional production lines to satisfy the projected demand of our products.

RESULTS OF OPERATIONS

The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of our net sales.

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(All amounts, other than percentage, in thousands of US dollars)

	Year Ended		Year Ended
Item	March 31, 2008		March 31, 2007
		As a		As a
		percentage of		percentage of
	In Thousands	net sales	In Thousands	net sales
Net Sales	$34,510	100.0%	$23,022	100.0%
Cost of sales	18,947	54.9%	11,610	50.4%
				49.6%
Gross profit	15,563	45.1%	11,412
Selling, general and administrative
expenses	3,155	9.1%	2,167	9.4%
Operating Income	12,408	36.0%	9,245	40.2%
Interest expenses	403	1.2%	471	2.0%
Other income	31	0.1%	122	0.5%
Income before income taxes	12,036	34.9%	8,896	38.6%
Provision of income taxes	2,035	5.9%	1,341	5.8%
Net Income	10,001	29.0%	7,555	32.8%

Fiscal Year Ended March 31, 2008 Compared to Fiscal Year Ended March 31, 2007

Net Sales. Net sales increased $11.5 million, or 49.9% to $34.5 million in fiscal year 2008 from $23.0 million in fiscal year 2007. This increase was mainly due to the significant increase of sales of our fruit concentrate products. Our sales of fruit concentrate products reached approximately $16.6 million in fiscal year 2008, a $9.7 million, or 140.6% increase from $6.9 million in fiscal year 2007. The fruit concentrate production line was put into production in 2007. The utilization rate of such production line was 77.1% in fiscal year 2007 and increase to 98.3% in fiscal year 2008. Our high quality fruit concentrate products processed from premium specialty fruits were well accepted by our customers in the fiscal year 2008. We also benefited from growth in the fruit processing product market in China, the increased market demand for our products and our increased brand recognition and customer base. The number of our distributors increased from 57 in fiscal year 2007 to 68 as of March 31, 2008. The fruit processing products market in China, especially the market for premium specialty fruit products, continued to expand in fiscal year 2008 due, in part, to increased health awareness in the general population and increased per capita disposable income in China.

Cost of Sales. Our cost of sales is primarily comprised of the costs of our raw materials, labor, overhead and sales tax. Our cost of sales increased $7.3 million, or 62.9%, to $18.9 million in fiscal year 2008 from $11.6 million in fiscal year 2007. This increase was mainly due to the increase of our sales revenue. As a percentage of net sales, the cost of sales increased to 54.9% in fiscal year 2008 from 50.4% in fiscal year 2007. The percentage increase was mainly due to the increased sales of our fruit concentrate products as discussed in more details below.

Gross Profit and Gross Margin. Our gross profit increased $4.2 million to $15.6 million in fiscal year 2008 from $11.4 million in fiscal year 2007. Gross profit as a percentage of net revenues was 45.1% and 49.6% for fiscal years 2008 and 2007, respectively. The decrease in the gross margin was primarily driven by the increased sales of fruit concentrate products in fiscal year 2008. Our fruit concentrate products generally have a relatively lower margin than other fruits processed products. In fiscal year 2008, the average gross margin for our fruit concentrate products was approximately 38.0% and the average gross margin of our nectar and glazed fruit products were approximately 68.5% and 62.9%, respectively. Although the fruit concentrate products has a lower gross profit margin in comparison with other products, the demand for fruit concentrate grew significantly from fiscal year 2007. In order to meet the increasing demand of fruit concentrate products, we will increase our production capacity by putting a new fruit concentrate production line in fiscal year 2009. The new production line will be located in our new factory at Mu Dan River. We also experienced strong demand for our glazed fruit products in fiscal year 2007 and 2008. We plan to put a new glazed fruit production line in our existing factory in Daqing in 2009.

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Selling and general and administrative expenses. Our selling and general and administrative expenses increased $987,621, or 45.6%, to $3.2 million in fiscal year 2008 from $2.2 million in fiscal year 2007. Our selling expenses increased $530,717, or 34.3%, to $2.1 million in fiscal year 2008 from $1.5 million in fiscal year 2007. We believe the increase of our selling expenses is generally in line with the increase of our net sales. As a percentage of net sales, our selling expenses slightly decreased to 6.0% in fiscal year 2008 from 6.7% in fiscal year 2007. This percentage decrease was primarily a result of more efficient control of our transportation cost.

Our general and administrative expenses increased $456,903, or 73.6%, to $1.1 million in fiscal year 2008 from $621,028 in fiscal year 2007. As a percentage of net sales, general and administrative expenses increased to 3.1% in fiscal year 2008, as compared to 2.7% in fiscal year 2007. This percentage increase was primarily attributable to the increase of depreciation expenses. Our fruit concentrate production line commenced production in July 2007, as a result, we only recorded depreciation expenses for idle capacity for 4 months in fiscal year 2007, but recorded a depreciate expense for idle capacity for 7 months in fiscal year 2008.

Other income. Other income primarily consists of bank interest income and sundry income. Other income decreased $91,363 to $30,509 in fiscal year 2008 from $121,872 in fiscal year 2007. The decrease was primarily attributable to the decrease in sundry income.

Interest expenses. Our interest expenses decreased $68,240 to $402,677 in fiscal year 2008 from $470,917 in fiscal year 2007. As a percentage of net sales, our interest expenses and other financial costs decreased to 1.2% in fiscal year 2008 from 2.0% in fiscal year 2007. This percentage decrease was primarily attributable to the decrease of an outstanding bank loan.

Income before Income Taxes. Income before income taxes increased $3.1 million, or 35.3%, to $12.0 million in fiscal year 2008 from $8.9 million in fiscal year 2007. Income before income taxes as a percentage of net sales decreased to 34.9% in fiscal year 2008 from 38.6% in fiscal year 2007. The main reason for such a percentage decrease was mainly due to the significant increase in sales of our fruit concentrate products as discussed above.

Provision for Income Taxes. A company registered in China is subject to national and local income taxes within China at the applicable tax rate on the taxable income as reported in its PRC statutory financial statements in accordance with relevant income tax laws. Under the Provisional Taxation Regulation of the People's Republic of China effective before January 1, 2008, income tax was generally payable by enterprises at a rate of 33% of their taxable income. Newly established high-technology enterprises, such as our subsidiary Longheda, is entitled to a two-year 50% tax reduction. The tax holiday of Longheda commenced in 2006 and expired in 2007. Longheda was subject to a tax rate of 15% in 2007 and is subject to a tax rate of 25% in 2008.

In 2007, China passed the new Enterprise Income Tax Law, or the New EIT Law, and its implementing rules, both of which became effective on January 1, 2008. The New EIT Law significantly curtails tax incentives granted to foreign-invested enterprises under the previous law. The New EIT Law, however, (i) reduces the statutory rate of enterprise income tax from 33% to 25%, (ii) permits companies to continue to enjoy their existing tax incentives, adjusted by certain transitional phase-out rules, and (iii) introduces new tax incentives, subject to various qualification criteria.

Substantially all of Fashion Tech's income may be derived from dividends it receives from Longheda. The New EIT Law and its implementing rules generally provide that a 10% withholding tax applies to China-sourced income derived by non-resident enterprises for PRC enterprise income tax purposes. We expect that such 10% withholding tax will apply to dividends paid to Fashion Tech by Longheda but this treatment will depend on our status as a non-resident enterprise. For detailed discussion of PRC tax issues related to resident enterprise status, see "Risk Factors — Risks Associated with Doing Business in China — Under the New EIT Law, we may be classified as a 'resident enterprise' of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders."

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We incurred income tax expenses of $2.0 million in fiscal year 2008, an increase of 53.8% against $1.3 million in fiscal year 2007. The increase was primarily attributable to the increase of sales revenue and profits.

Net Income. Our net income increased $2.4 million, or 31.6%, to $10 million in fiscal year 2008 from $7.6 million in fiscal year 2007, mainly as a result of increased market demand for our products and our increased brand recognition and customer base as discussed above.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2008, we had cash and cash equivalents of approximately $7.1 million. The following table provides detailed information about our net cash flow for all financial statements periods presented in this report.

Cash Flow
(All amounts in thousands of U.S. dollars)

	Year Ended
	March 31,
		2008		2007
Net cash provided by operating
activities	$	10,562	$	7,173
Net cash (used in) investing activities		-		(4,461)
Net cash (used in) financing activities		(8,033)		(2,528)
Net increase in cash and cash
equivalent		2,529		183

Cash Flows from Operating Activities. Net cash provided by operating activities was $10.6 million in fiscal year 2008, an increase of $3.4 million, or 47.2% from $7.2 million net cash provided by operating activities in fiscal year 2007. Such increase of net cash provided by operating activities was primarily attributable to an approximately $2.4 million increase in net income.

Cash Flows from Investing Activities. Our cash used in investing activities primarily consists of payments related to the acquisition or the sale of property, plant and equipment. Net cash used in investing activities in fiscal year 2007 was $4.5 million, as compared to $0 in fiscal year 2008. We purchased a concentrate juice production line in fiscal year 2007.

Cash Flows from Financing Activities. Net cash used in financing activities totaled $8.0 million in fiscal year 2008, an increase of $5.5 million, or 220% from $2.5 million in fiscal year 2007. The increase of net cash used in financing activities was primarily due to a bank loan repayment of $6.0 million and the payment of dividends of $7.4 million in fiscal year 2008 which more than offset the bank loan drawdown of $5.4 million. We declared dividends in the fiscal year 2007 and the dividend was paid in fiscal year 2008.

As of March 31, 2008, we have one bank loan with Daqing City Commercial Bank in the amount of $2.8 million outstanding. The loan carried an annual interest rate of 8.42%. We repaid the loan when it expired on April 28, 2008 and currently do not have any bank loan outstanding.

On August 14, 2008, we completed the initial closing of a private placement of our common shares to certain accredited investors for $5 million in gross proceeds, resulting in $4.26 million in net proceeds after payment of $.75 million in offering expenses.

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Capital Expenditures

Our capital expenditures were $4.5 million and $0 for the fiscal years ended March 31, 2007 and 2008, respectively. Our capital expenditures were mainly used to expand our production capacity. Our material capital expenditure requirement for fiscal year 2009 is expected to be approximately $18.6 million, which will be used for constructing a concentrate fruit juice and a glazed fruit production line.

We believe that our cash on hand, cash flow from operations, together with the net proceeds from the initial closing of the private offering completed on August 14, 2008 and anticipated additional cash resources will meet our expected capital expenditure and working capital for the next 12 months. In addition, we may, in the future, require additional cash resources due to changed business conditions, implementation of our strategy to expand our production capacity or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management's difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:

• Use of estimates. The preparation of the financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

• Trade accounts receivables. In the normal course of business, we extend credit to customers. Trade accounts receivable, less allowance for doubtful accounts, reflect the net realizable value of receivables, and approximate fair value. On a regular basis, we evaluate our trade accounts receivable and establish an allowance for doubtful accounts based on a combination of specific customer circumstances, credit conditions, and payment history. A receivable is considered past due if payments have not been received within the agreed upon invoice terms. Trade accounts receivable is charged off against the allowance after management determines the potential for recovery is remote.

• Inventories. The cost of finished products inventories includes raw materials, director labor and indirect production costs. Inventories are stated at the lower of cost or market value. We use first-in, first-out methods to value our inventories.

• Impairment of long-lived assets. Long-lived assets, except goodwill and indefinite-lived intangible assets, are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net cash flows estimated by our management to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are recorded as held for sale at the lower of carrying value or estimated net realizable value.

  All lands in the PRC are owned by the PRC government. The government in the PRC, according to the relevant PRC law, may sell the right to use the land for a specific period of time. Thus, all of our land purchases in the PRC are considered to be leasehold land and are stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreements on a straight-line basis, which is 50 years and they will expire in 2055.

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• Property, plant and equipment, net. Property and equipment are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred. The principal estimated useful lives generally are: buildings and leasehold improvements – 20 years; machinery and equipment - 10 years.

• Revenue recognition. We recognize revenue from sales of products, where persuasive evidence of an arrangement exists, delivery has occurred, the seller's price is fixed or determinable and collectibility is reasonably assured. This generally occurs when the customer receives the product or at the time title passes to the customer. Customers generally do not have the right to return products unless damaged or defective. Net sales are comprised of gross sales reduced by customer returns, trade promotions, performance allowances and discounts.

EFFECTS OF INFLATION

Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor the price change in fruit products and continually maintain effective cost control in operations.

OFF BALANCE SHEET ARRANGEMENTS

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.

SEASONALITY

The harvest season for our source fruits are generally from mid July to mid November every year. As fruits collected cannot be stored at room temperature for a long time, they must be processed as soon as they are harvested. Our fruit processing production is generally from mid July to mid November every year. Our fruit beverage production lasts throughout the year since the raw materials we use are not subject to seasonal effect.

Due to the nature of our business, we will generally experience higher sales in the second and third fiscal quarter mainly due to distributors' (i) efforts to obtain adequate supply of our fruit processing products before the supply diminishes after production ceases in November; and (ii) anticipation of higher demand for fruit processed products as a result of festive seasons at the end of the year and beginning of the following year such as Christmas and the Chinese spring festival.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS 157, Fair Value Measurements SFAS 157, which provides guidance about how to measure assets and liabilities that use fair value. SFAS 157 applies whenever another US GAAP standard requires (or permits) assets or liabilities to be measured at fair value but does not expand the use of fair value to any new circumstances. This standard also requires additional disclosures in both annual and quarterly reports. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FASB Staff Position FSP 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13 FSP 157-1, which states that SFAS 157 does not address fair value measurements for purposes of lease classification or measurement. In February 2008, the FASB issued FSP 157-2, Effective Date of FASB Statement No. 157 ("FSP 157-2"), which delays the effective date for non-financial assets and non-financial liabilities to fiscal years beginning after November 15, 2008, except for items that are measured at fair value in the financial statements on a recurring basis (at least annually). The Group is currently evaluating the impact of adopting SFAS 157.

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In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115 SFAS 159, which is effective for fiscal years that begin after November 15, 2007. This standard permits entities to choose to measure many financial instruments and certain other items at fair value and consequently report unrealized gains and losses on such items in earnings. The Group has elected not to adopt the fair value provisions of SFAS159, which does not have a significant impact of its financial position, cash flows and results of operations.

In December 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations ("SFAS 141(R)"). SFAS 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141(R) will be effective for financial statements issued for fiscal years beginning after December 15, 2008, and will be adopted by the Group beginning in the first quarter of 2009. The Group is currently evaluating the impact of adopting SFAS 141(R).

In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No.51 ("SFAS160"). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent's ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 will be effective for financial statements issued for fiscal years beginning after December 15, 2008, and will be adopted by the Group beginning in the first quarter of 2009. The Group is evaluating the impact of adopting SFAS 160.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. SFAS 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk-related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. SFAS 161 will be effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and will be adopted by the Group beginning in the first quarter of 2009. The Group is currently evaluating the impact of adopting SFAS 161.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS 162"). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with accounting principles generally accepted in the United States of America. The Group is currently evaluating the impact of adopting SFAS 162.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force ("EITF")), the American Institute of Certified Public Accountants ("AICPA"), and the SEC did not or are not believed by management to have a material impact on the Group's present or future financial statements.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of our common stock as of August 14, 2008 (i) by each person who is known by us to beneficially own more than 5% of our common stock; (ii) by each of our officers and directors; and (iii) by all of our officers and directors as a group. Unless otherwise specified, the address of each of the persons set forth below is in care of Fashion Tech International, Inc., No. 2 Wenhua Street, Dongfeng New Village, Daqing, Heilongjiang 163311, China.

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			Amount and
			Nature of	Percent
Name & Address of Beneficial			Beneficial	of
Owner	Office, If Any	Title of Class	Ownership(1)	Class(2)
Officers and Directors
Changjun Yu	Chairman	Common stock	0	*
		$.001 par value
Jinglin Shi	President and	Common stock	0	*
	CEO	$.001 par value
Colman Cheng	CFO and	Common stock	0	*
	Secretary	$.001 par value
Manjiang Yu	Vice President of	Common stock	0	*
	Sales	$.001 par value
All officers and directors as a group		Common stock	0	0%
(4 persons named above)		$.001 par value
5% Securities Holder
Halter Financial Investments, L.P.		Common stock	2,513,758	7.22%
		$.001 par value
Yiu Fai Kung		Common stock	21,116,815	60.61%
		$.001 par value
Kwan Mo Ng		Common stock	9,050,063	25.98%
		$.001 par value
* Less than 1%

1Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

2 A total of 34,840,175 shares of our common stock are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1) as of August 14, 2008. For each beneficial owner above, any options exercisable within 60 days have been included in the denominator.

DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

DIRECTORS AND EXECUTIVE OFFICERS

The following sets forth information about our directors and executive officers as of the date of this report:

Name	Age	Position
Changjun Yu	35	Chairman
Jinglin Shi	34	Chief Executive Officer, President and director
Colman Cheng	39	Chief Financial Officer, Treasurer and Secretary
Manjiang Yu	36	Vice President of Sales

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Changjun Yu. Mr. Yu is the leading founder of our company and has served as the chairman of our board of directors since the completion of the reverse acquisition of Fezdale on August 14, 2008. Mr. Yu has been the chairman of our subsidiary Longheda since its formation in 2004. From 2001 to 2003, Mr. Yu was the vice president of sales of Haerbin Shengjinlai Economic and Technology Development Co. Ltd. From 1997 to 2000, He served as the vice president of production and then vice president of sales of Shandong Qingzhou Dajinxing Aviation Beverage Co. Ltd. Mr. Yu has over 13 years of experience in the food industry.

Jinglin Shi. Mr. Shi is one of our founders. He has been our Chief Executive Officer, President and director since the completion of the reverse acquisition of Fezdale on August 14, 2008. Mr. Shi has served as the Chief Executive Officer of our subsidiary Longheda since its formation in 2004. From 2001 to 2003, Mr. Shi worked as the sales manager and then the vice president of sales of Daqing Yuehaitian Economic and Trade Co. Ltd.

Sing Kau (Colman) Cheng. Mr. Cheng has been our Chief Financial Officer, Treasurer and Secretary since the completion of the reverse acquisition of Fezdale on August 14, 2008 and the Chief Financial Officer of our subsidiary Longheda since August 2007. Mr. Cheng has over 14 years of auditing, accounting and financial management experience in big four accounting firms and other sizable corporations. From August 2006 to June 2007, he served as an investment manager of KAB Asia Limited. From October 2004 to August 2006, he was a financial controller and company secretary of A&K Education Software Holdings Limited, a GEM listed company in Hong Kong. From February 2003 to October 2004, he was a senior auditor of CCIF CPA Limited. Mr. Cheng received a bachelor's degree in Accounting from Edith Cowan University in Australia and is an associate member of both the Hong Kong Institute of Certified Public Accountants and CPA Australia.

Manjiang Yu. Mr. Yu has been our Vice President of Sales since the completion of the reverse acquisition of Fezdale on August 14, 2008. Mr. Yu worked as the assistant to the Chief Executive Officer, then the Chief Market Officer of our subsidiary Longheda since its formation in 2004. Before joining Longheda, he served as the president of Daqing High-tech Zone Ruinuo Economic & Trade Co. Ltd. from 2002 to 2004.

FAMILY RELATIONSHIPS

There is no family relationship among any of our officers or directors.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

To the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in "Certain Relationships and Related Transactions," none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE— FISCAL YEARS ENDED MARCH 31, 2008 AND 2007

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods. No executive officer received total annual salary and bonus compensation in excess of $100,000.

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							Non-
						Non-Equity	Qualified
						Incentive Plan	Deferred
Name and				Stock	Option	Compensation	Compensation	All Other
Principal		Salary	Bonus	Awards	Awards	Earnings	Earnings	Compensation	Total
Position	Year	($)	($)	($)	($)	($)	($)	($)	($)
Jinglin Shi, CEO	2008	$4,040	-	-	-	-	-	-	$4,040
and President (1)
	2007	$3,848	-	-	-	-	-	-	$3,848
Richard	2008	-	-	-	-	-	-	-	-
Crimmins,
former President,
Treasurer and	2007	-	-	-	-	-	-	-	-
Secretary (2)

(1) On August 14, 2008, we acquired Fezdale in a reverse acquisition transaction that was structured as a share exchange and in connection with that transaction, Mr. Shi became our Chief Executive Officer, President and director. Prior to the effective date of the reverse acquisition, Mr. Shi served at Fezdale's wholly owned subsidiary Longheda as its chief executive officer. The annual, long term and other compensation shown in this table include the amount Mr. shi received from Longheda prior to the consummation of the reverse acquisition.

(2) Richard Crimmins resigned from all offices he held with us and his position as our director upon the closing of the reverse acquisition of Fezdale on August 14, 2008.

EMPLOYMENT AGREEMENTS

On August 14, 2008, our subsidiary Fezdale entered into an employment agreements with Jinglin Shi, our Chief Executive Officer and President. Under the employment agreements, Mr. Shi will receive an annual salary of RMB 600,000 (approximately $87,464). Mr. Shi is subject to customary confidentiality and non-competition covenants as provided in the employment agreement.

We have not provide retirement benefits (other than a state pension scheme in which all of our employees in China participate) or severance or change of control benefits to our named executive officer.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

None of our executive officers received any equity awards, including, options, restricted stock or other equity incentives during the fiscal year ended March 31, 2008.

COMPENSATION OF DIRECTORS

During the 2007 and 2008 fiscal years, no member of our board of directors received any compensation for his services as a director.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE

TRANSACTIONS WITH RELATED PERSONS

The following includes a summary of transactions since the beginning of the 2008 fiscal year, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last three completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under "Executive Compensation"). We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm's-length transactions.

• On May 16, 2008, our Chairman Changjun Yu entered into a Trademark Transfer Agreement with our company pursuant to which Mr. Yu transferred his rights to the trademark "农珍之冠" to our company for a nominal consideration of RMB 1. In connection with the trademark transfer, Mr. Yu also entered into a Trademark License Agreement with our company pursuant to which Mr. Yu granted us the exclusive rights to use such trademark before the Trademark Office approves the transfer of such trademark. See "Our Business – Intellectual Property."

• On April 28, 2008, our subsidiary Longheda entered into a financial advisory agreement (the "Financial Advisory Agreement") with HFG International, Limited. The Financial Advisory Agreement was amended on August 12, 2008. Under the Financial Advisory Agreement, as amended, HFG International, Limited agreed to provide Longheda with financial advisory and consulting services in facilitating Longheda's going public transaction. In consideration for these services, HFG International, Limited is entitled to $450,000 which will be paid within 45 days after the closing of the going public transaction. HFG International, Limited is an affiliate of Halter Financial Investments, L.P., which was an 87.5% shareholder of our company before the closing of the reverse acquisition of Fezdale and a 7.2% shareholder as of the date of this report.

PROMOTERS AND CERTAIN CONTROL PERSONS

We did not have any promoters at any time during the past five fiscal years.

DIRECTOR INDEPENDENCE

We currently do not have any independent directors, as the term "independent" is defined by the rules of the Nasdaq Stock Market.

LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results.

MARKET PRICE AND DIVIDENDS ON OUR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

Our common stock is quoted on the OTC Bulletin Board trades under the symbol "FHTI.OB." The following table sets forth, for the periods indicated, the high and low bid prices of our common stock. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions. The high and low quotations for the first quarter and second quarter of fiscal year 2008 have been adjusted for the 10-for-1 reverse stock split that became effective on June 19, 2008.

	Closing Bid Prices(1)
	High	Low
Year Ended March 31, 2009
First Quarter	$3.00	$0.50
Second Quarter (through August 8, 2008)	$3.00	$3.00
Year Ended March 31, 2008
First Quarter	N/A	N/A

Second Quarter	$0.65	$0.65
Third Quarter	$0.70	$0.30
Fourth Quarter	$0.30	$0.20
Year Ended March 31, 2007
First Quarter	$1.50	$0.65
Second Quarter	$2.75	$0.35
Third Quarter	$1.50	$0.35
Fourth Quarter	$1.50	$0.65

(1) The above tables set forth the range of high and low closing bid prices per share of our common stock as reported by www.quotemedia.com for the periods indicated.

39

HOLDERS

As of August 14, 2008, there were approximately 456 stockholders of record of our common stock. This number does not include shares held by brokerage clearing houses, depositories or others in unregistered form. The last reported sale price of our common stock on August 14, 2008 was $3.0 per share.

DIVIDENDS

Except for dividends declared and paid by our newly acquired subsidiary Longheda, we have never declared or paid a cash dividend. Any future decisions regarding dividends will be made by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends, subject to the approval of our stockholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

EQUITY COMPENSATION PLANS

We do not have in effect any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.

RESENT SALE OF UNREGISTERED SECURITIES

Reference is made to the disclosure set forth under Item 3.02 of this report, which disclosure is incorporated by reference into this section.

DESCRIPTION OF SECURITIES

COMMON STOCK

We are authorized to issue up to 120,000,000 shares of common stock, par value $0.001 per share. Each outstanding share of common stock entitles the holder thereof to one vote per share on all matters. Our bylaws provide that any vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board of directors. Stockholders do not have preemptive rights to purchase shares in any future issuance of our common stock.

The holders of shares of our common stock are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a dividend and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiary and other holdings and investments. In addition, our operating subsidiary in the PRC, from time to time, may be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions. In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to receive, ratably, the net assets available to stockholders after payment of all creditors.

40

All of the issued and outstanding shares of our common stock are duly authorized, validly issued, fully paid and non-assessable. To the extent that additional shares of our common stock are issued, the relative interests of existing stockholders will be diluted.

PREFERRED STOCK

We may issue up to 5,000,000 shares of preferred stock, par value $0.001 per share in one or more classes or series within a class as may be determined by our board of directors, who may establish, from time to time, the number of shares to be included in each class or series, may fix the designation, powers, preferences and rights of the shares of each such class or series and any qualifications, limitations or restrictions thereof. Any preferred stock so issued by the board of directors may rank senior to the common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up of us, or both. Moreover, under certain circumstances, the issuance of preferred stock or the existence of the un-issued preferred stock might tend to discourage or render more difficult a merger or other change in control.

No shares of preferred stock are currently outstanding. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of our outstanding voting stock.

TRANSFER AGENT AND REGISTRAR

Our independent stock transfer agent is Interwest Transfer Company, Inc. located in Salt Lake City, Utah. Their mailing address is 1981 East Murray Holladay Road, Suite 100, Salt Lake City, UT 84117. Their phone number is (801)272-9294.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our bylaws provide for the indemnification of our directors to the fullest extent permitted by the Nevada Revised Statutes and may, if and to the extent authorized by our board of directors, so indemnify our officers and any other person whom we have the power to indemnify against liability, reasonable expense or other matter. This indemnification policy could result in substantial expenditure by us, which we may be unable to recoup.

Insofar as indemnification by us for liabilities arising under the Exchange Act may be permitted to our directors, officers and controlling persons pursuant to provisions of the Articles of Incorporation and bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defense of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Exchange Act and will be governed by the final adjudication of such issue.

At the present time, there is no pending litigation or proceeding involving a director, officer, employee or other agent of ours in which indemnification would be required or permitted. We are not aware of any threatened litigation or proceeding which may result in a claim for such indemnification.

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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

Reference is made to the disclosure set forth under Item 4.01 of this report, which disclosure is incorporated herein by reference.

ITEM 3.02     UNREGISTERED SALES OF EQUITY SECURITIES

On August 14, 2008 we issued 30,166,878 shares of our common stock to the shareholders of Fezdale. The total consideration for the 30,166,878 shares of our common stock is 1,000 shares of Fezdale, which is all the issued and outstanding capital stock of Fezdale. We did not receive any cash consideration in connection with the share exchange. The number of our shares issued to the shareholders of Fezdale was determined based on an arms-length negotiation. The issuance of our shares to these individuals was made in reliance on the exemption provided by Section 4(2) of the Securities Act for the offer and sale of securities not involving a public offering and Regulation S promulgated thereunder.

On August 14, 2008, we sold 1.8 million shares of our common stock to certain Investors at $2.78 per share for a total of $5 million pursuant to the Securities Purchase Agreement. The issuance of our shares to the Investors was made in reliance on the exemption provided by Section 4(2) of the Securities Act for the offer and sale of securities not involving a public offering, Regulation D and Regulation S promulgated thereunder. The purchasers were sophisticated investors with access to all relevant information necessary to evaluate the investment, and who represented to us that the shares were being acquired for investment.

In instances described above where we issued securities in reliance upon Regulation D, we relied upon Rule 506 of Regulation D of the Securities Act. These stockholders who received the securities in such instances made representations that (a) the stockholder is acquiring the securities for his, her or its own account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, (b) the stockholder agrees not to sell or otherwise transfer the purchased shares unless they are registered under the Securities Act and any applicable state securities laws, or an exemption or exemptions from such registration are available, (c) the stockholder has knowledge and experience in financial and business matters such that he, she or it is capable of evaluating the merits and risks of an investment in us, (d) the stockholder had access to all of our documents, records, and books pertaining to the investment and was provided the opportunity ask questions and receive answers regarding the terms and conditions of the offering and to obtain any additional information which we possessed or were able to acquire without unreasonable effort and expense, and (e) the stockholder has no need for the liquidity in its investment in us and could afford the complete loss of such investment. Management made the determination that the investors in instances where we relied on Regulation D are accredited investors (as defined in Regulation D) based upon management's inquiry into their sophistication and net worth. In addition, there was no general solicitation or advertising for securities issued in reliance upon Regulation D.

In instances described above where we indicate that we relied upon Section 4(2) of the Securities Act in issuing securities, our reliance was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there were only a limited number of offerees; (c) there were no subsequent or contemporaneous public offerings of the securities by us; (d) the securities were not broken down into smaller denominations; and (e) the negotiations for the sale of the stock took place directly between the offeree and us.

In instances described above where we indicate that we relied upon Regulation S promulgated under the Securities Act in issuing securities, our reliance was based upon the following factors (a) each subscriber was neither a U.S. person nor acquiring the shares for the account or benefit of any U.S. person, (b) each subscriber agreed not to offer or sell the shares (including any pre-arrangement for a purchase by a U.S. person or other person in the United States) directly or indirectly, in the United States or to any natural person who is a resident of the United States or to any other U.S. person as defined in Regulation S unless registered under the Securities Act and all applicable state laws or an exemption from the registration requirements of the Securities Act and similar state laws is available, (c) each subscriber made his, her or its subscription from the subscriber's residence or offices at an address outside of the United States and (d) each subscriber or the subscriber's advisor has such knowledge and experience in financial and business matters that the subscriber is capable of evaluating the merits and risks of, and protecting his interests in connection with an investment in us.

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ITEM 4.01     CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

Prior to our reverse acquisition transaction with Fezdale, our independent registered public accounting firm was Pritchett, Siler & Hardy, P.C., while Fezdale's independent registered public accounting firm was HLB Hodgson Impey Cheng. On August 14, 2008, concurrent with the change in control transaction discussed above, our board of directors approved the dismissal of Pritchett, Siler & Hardy, P.C., as our independent auditor, effective immediately. Concurrent with the decision to dismiss Pritchett, Siler & Hardy, P.C. as our independent auditor, our board of directors elected to continue the existing relationship of Fezdale with HLB Hodgson Impey Cheng and appointed HLB Hodgson Impey Cheng as our independent auditor.

Pritchett, Siler & Hardy, P.C.'s reports on Fashion Tech International, Inc.'s financial statements as of and for the fiscal years ended March 31, 2008 and 2007, did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles, except that its report for the fiscal years ended March 31, 2008 and 2007 contained a going concern qualification as to Fashion Tech International, Inc.'s ability to continue as a going concern.

In connection with the audits of the fiscal years ended March 31, 2008 and 2007, there were (1) no disagreements with Pritchett, Siler & Hardy, P.C. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Pritchett, Siler & Hardy, P.C., would have caused Pritchett, Siler & Hardy, P.C. to make reference to the subject matter of the disagreements in connection with its reports, and (2) no events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation S-K.

During the fiscal years ended March 31, 2008 and 2007 and through the date hereof, neither us nor anyone acting on our behalf consulted HLB Hodgson Impey Cheng with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us or oral advice was provided that HLB Hodgson Impey Cheng concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement or reportable events set forth in Item 304(a)(1)(iv) and (v), respectively, of Regulation S-K.

We provided Pritchett, Siler & Hardy, P.C. with a copy of this disclosure on August 14, 2008, providing Pritchett, Siler & Hardy, P.C. with the opportunity to furnish us with a letter addressed to the SEC stating whether it agrees with the statement made by us herein in response to Item 304(a) of Regulation S-K and, if not, stating the respect in which it does not agree. A letter from Pritchett, Siler & Hardy, P.C. dated August 14, 2008 is filed as Exhibit 16.1 to this report.

ITEM 5.01     CHANGES IN CONTROL OF REGISTRANT

Reference is made to the disclosure set forth under Item 2.01 of this report, which disclosure is incorporated herein by reference.

As a result of the closing of the reverse acquisition with Fezdale, the former shareholders of Fezdale (after the private placement transaction as described under Item 2.01) own 86.59% of the total outstanding shares of our capital stock and 86.59% total voting power of all our outstanding voting securities.

ITEM 5.02     DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

Upon the closing of the reverse acquisition, as of August 14, 2008, Richard Crimmins, our sole director, submitted his resignation letter pursuant to which he resigned from all offices of the Company that he holds and from his position as our director effective immediately upon closing. The resignation of Mr. Crimmins is not in connection with any known disagreement with us on any matter. Mr. Changjun Yu was appointed to the board of the directors at the effective time of the resignation of Mr. Crimmins. In addition, on August 14, 2008, our board of directors increased the size of our board of directors to two (2) and appointed Mr. Jinglin Shi to fill the vacancy created by such increase.

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On August 14, 2008, in connection with the closing of the reverse acquisition, Jinglin Shi was appointed as our Chief Executive Officer and President, Manjiang Yu was appointed as Vice President of Sales and Colman Cheng was appointed as our Chief Financial Officer, Treasurer and Secretary.

For certain biographical and other information regarding the newly appointed officers and directors, see the disclosure under Item 2.01 of this report, which disclosure is incorporated herein by reference.

ITEM 5.06     CHANGE IN SHELL COMPANY STATUS

Reference is made to the disclosure set forth under Item 2.01 and 5.01 of this report, which disclosure is incorporated herein by reference.

ITEM 9.01     FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements of Business Acquired

Filed herewith are the following:

1.

Audited financial statements of Daqing Longheda Food Company Limited for the fiscal years ended March 31, 2008 and 2007.

2.

Audited financial statements of Fezdale Investments Limited for the period ended March 31, 2008.

(b) Pro Forma Financial Information

The unaudited pro forma balance sheet data is not significant because of the lack of operating assets and liabilities of Fashion Tech International, Inc.. The pro forma results of operations, assuming the acquisition is completed at the beginning of the reporting period, would have caused our net losses to increase, but not materially, because of the limited operating losses reported by Fashion Tech International, Inc.. The effects of stockholders' equity will be reported as a recapitalization.

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(d) Exhibits

Exhibit No.	Description
2.1	Share Exchange Agreement, dated August 14, 2008, among the registrant, Fezdale Investments Limited and its shareholders.
3.1*	Articles of Incorporation of the registrant as filed with the Secretary of State of Nevada April 16, 1999 [incorporated by reference to Exhibit 1 to the registrant's Annual Report on Form 10-KSB filed on January 27, 2000].
3.2*	Articles of Merger as filed with the Secretary of State of Nevada May 7, 1999 [incorporated by reference to Exhibit 1 to the registrant's Annual Report on Form 10-KSB filed on January 27, 2000].
3.3*	Certificate of Amendment to Articles of Incorporation of the registrant as filed with the Secretary of State of Nevada June 12, 2008 [incorporated by reference to Exhibit 3.1 to the registrant's Current Report on Form 8-K filed on June 20, 2008].
3.4*	Amended and Restated Bylaws of the registrant adopted on June 19, 2008 [incorporated by reference to Exhibit 3.2 to the registrant's Current Report on Form 8-K filed on June 20, 2008].

4.1	Form of Lock-up Agreement, dated August 14, 2008.
10.1	Form of Securities Purchase Agreement, dated August 14, 2008.
10.2	Make Good Escrow Agreement, dated August 14, 2008, by and among the registrant, WLT Brothers Capital, Inc., Mr. Yiu Fai Kung and Securities Transfer Corporation.
10.3	Make Good Escrow Agreement, dated August 14, 2008, by and among the registrant, HFG International, Limited, Mr. Yiu Fai Kung and Securities Transfer Corporation.
10.4	Holdback Escrow Agreement, dated August 14, 2008, by and among the registrant, WLT Brothers Capital, Inc. and Securities Transfer Corporation.
10.5	Form of Escrow Agreement, dated August 14, 2008.
10.6	English Summary of Form of Memorandum of Understanding by and between the registrant and the local governments
10.7	English Summary of Form of Distribution Contract
10.8	English Summary of Trademark License Agreement, by and between Daqing Longheda Food Company Limited and Changjun Yu, dated May 16, 2008
10.9	English Summary of Trademark License Agreement, by and between Daqing Longheda Food Company Limited and Changjun Yu, dated May 16, 2008
10.10	English Summary of Technology Cooperation Agreement, by and between Daqing Longheda Food Company Limited and College of Food of Heilongjiang Bai Yi Land Reclamation University, dated March 7, 2008
10.11	English Summary of Counter-Guarantee Agreement, by and between Daqing Longheda Food Company Limited and Daqing Industrial and Commercial Guarantee Co., Ltd., dated August 27, 2007
10.12	English Summary of Renminbi Loan Agreement, by and between Daqing Longheda Food Company Limited and Daqing Industrial and Commercial Bank, dated August 24, 2007
10.13	English Summary of Guarantee Agreement, by and between Daqing Industrial and Commercial Guarantee Co., Ltd. and Daqing Industrial and Commercial Bank, dated August 24, 2007
10.14	English Summary of License Agreement, by and between Daqing Longheda Food Company Limited and Shanda Xin Hua Interactive Entertainment Co., Ltd., dated September 15, 2005
10.15	Employment Summary, by and between the registrant and Colman Cheng, dated August 14, 2008
10.16	Employment Summary, by and between the registrant and Jinglin Shi, dated August 14, 2008
10.17	Employment Summary, by and between the registrant and Manjiang Yu, dated August 14, 2008
10.18	Employment Summary, by and between the registrant and Yu Changjun, dated August 14, 2008.
16	Letter from Pritchett, Siler & Hardy, P.C. regarding change in certifying accountant.
21	Subsidiaries of the registrant.
*Incorporated by Reference

 

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.

Fashion Tech International, Inc.

Date: August 14, 2008

/s/ Jinglin Shi                       
Chief Executive Officer

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Owners
Daqing Longheda Food Company Limited

We have audited the accompanying balance sheets of Daqing Longheda Food Company Limited (the "Company") as of March 31, 2008 and 2007, and the related statements of income, changes in owners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audits provide reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Company as of March 31, 2008 and 2007, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/  HLB Hodgson Impey Cheng

Chartered Accountants
Certified Public Accountants

Hong Kong, August 11, 2008
...................................................

DAQING LONGHEDA FOOD COMPANY LIMITED
BALANCE SHEETS

	March 31
	2008	2007
	$	$
ASSETS
Current Assets
Cash and cash equivalents	7,103,562	4,003,715
Trade accounts receivable	1,921,457	1,943,237
Inventories	1,955,725	1,312,668
Other current assets	114,865	12,275
Total Current Assets	11,095,609	7,271,895
Property, plant and equipment, net	10,675,742	10,772,820
Land use rights, net	123,768	114,648
TOTAL ASSETS	21,895,119	18,159,363
LIABILITIES AND OWNERS' EQUITY
Current Liabilities
Short term borrowings	2,848,110	-
Accounts payable	159,078	130,167
Other payables and accrued expenses	494,278	930,030
Tax payable	607,680	279,886
Dividend payable	-	7,105,071
Total Current Liabilities	4,109,146	8,445,154
Long-term borrowings	-	3,229,578
Total Liabilities	4,109,146	11,674,732
Owners' Equity
Paid-in-capital	1,206,738	1,206,738
Statutory reserves	1,713,065	1,213,035
Exchange reserve	1,788,387	487,614
Retained earnings	13,077,783	3,577,244
Total Owners' Equity	17,785,973	6,484,631
TOTAL LIABILITIES AND OWNERS' EQUITY	21,895,119	18,159,363

See accompanying notes to financial statements

DAQING LONGHEDA FOOD COMPANY LIMITED
STATEMENTS OF INCOME

	For the Years Ended March 31,
	2008	2007
	$	$
Net sales	34,510,140	23,022,480
Cost of products sold	(18,947,091)	(11,609,731)
Gross Profit	15,563,049	11,412,749
Selling, general and administrative expenses	(3,155,007)	(2,167,386)
Operating income	12,408,042	9,245,363
Interest expense	(402,677)	(470,917)
Other income	30,509	121,872
Income before income taxes	12,035,874	8,896,318
Provision for income taxes	(2,035,305)	(1,341,195)
Net income	10,000,569	7,555,123

See accompanying notes to financial statements

DAQING LONGHEDA FOOD COMPANY LIMITED
STATEMENTS OF CHANGES IN OWNERS' EQUITY

				Accumulated
				Other	Total
	Paid-in	Statutory	Retained	Comprehensive	Owners
	Capital	Reserves	Earnings	Income	Equity
	$	$	$	$	$
Balance, April 1, 2006	1,206,738	651,033	3,689,194	105,998	5,652,963
Net income	-	-	7,555,123	-	7,555,123
Other comprehensive income:
Currency translation adjustment	-	-	-	381,616	381,616
Comprehensive income					7,936,739
Transfer to statutory reserves	-	562,002	(562,002)	-	-
Dividend declared	-	-	(7,105,071)	-	(7,105,071)
Balance, April 1, 2007	1,206,738	1,213,035	3,577,244	487,614	6,484,631
Net income	-	-	10,000,569	-	10,000,569
Other comprehensive income:
Currency translation adjustment	-	-	-	1,300,773	1,300,773
Comprehensive income					11,301,342
Transfer to statutory reserves	-	500,030	(500,030)	-	-
Balance, March 31, 2008	1,206,738	1,713,065	13,077,783	1,788,387	17,785,973

See accompanying notes to financial statements

DAQING LONGHEDA FOOD COMPANY LIMITED
STATEMENTS OF CASH FLOWS

	For the Years Ended March 31,
	2008	2007
	$	$
Operating Activities:
Net income	10,000,569	7,555,123
Adjustment to reconcile net income to net cash provided by operating activities
Depreciation and amortization	1,130,331	964,704
Changes in operating assets and liabilities:
Trade accounts receivable, net	207,462	(1,530,710)
Inventories	(478,237)	(164,459)
Other current assets	(95,264)	36,387
Accounts payable	14,654	46,281
Other payables and accrued expenses	(499,147)	157,365
Tax payable	281,232	108,001
Net Cash Provided by Operating Activities	10,561,600	7,172,692
Investing Activities:
Purchases of property, plant and equipment	-	(4,461,320)
Net Cash Used in Investing Activities	-	(4,461,320)
Financing Activities:
Payment on borrowings	(6,024,484)	(4,802,983)
Proceeds from borrowings	5,355,096	2,275,097
Dividends paid	(7,363,258)	-
Net Cash Used in Financing Activities	(8,032,646)	(2,527,886)
Effect of exchange rate on cash and cash equivalents	570,893	143,821
Net increase in cash and cash equivalents	2,528,954	183,486
Cash and cash equivalents at beginning of period	4,003,715	3,676,408
Cash and cash equivalents at end of period	7,103,562	4,003,715
Supplemental disclosures of cash flows information:
Cash paid during the period for interest	402,677	470,917
Cash paid during the period for income taxes	1,754,073	1,233,194

See accompanying notes to financial statements

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND OPERATIONS

Organization

Daqing Longheda Food Company Limited (the "Company") commenced in June 2004, when the Company, a domestic-funded enterprises established in Heilongjiang province of Peoples' Republic of China by Yu Changjun, Shi Jinglin, Lu Dongdong, Han Jiqiu, Wei Fenghong and Lu Yingdong, commenced the production and sales of golden berry nectar. The paid-in-capital of the Company upon incorporation was $1,206,738 (equivalent to RMB10,000,000), of which Yu Changjun held 60%, Shi Jinlin held 16% and each of the other 4 owners held 6%.

In October 2007, the six owners of the Company transferred an aggregate of 75% of their interests in the Company to Solar Sun Holdings Limited (the "Solar Sun"), a Hong Kong incorporated company. After the transfer, Solar Sun held 75% of the paid-in-capital, Yu Changjun held 15%, Shi Jinlin held 4% and each of the other 4 owners held 1.5%.

In November 2007, the Company was granted a new business license and became a sino-foreign equity enterprise.

In April 2008, the six founders of the Company transferred all of their interests in the Company, an aggregate of 25%, to Solar Sun. After the transfer, the Company is wholly owned by Solar Sun.

Nature of Operations

The Company manufactures and sells a variety of food products processed from rare superfruits that grow in Northeast China. Currently, the Company processes 4 types of rare superfruits including golden berry, crab apple, blueberry and raspberry, and sell fresh fruits and 4 types of fruit based products including fruit concentrate, nectar, glazed fruits and fruit beverage. The Company sells all of its products through 68 domestic distributors located in 19 provinces and 39 cities. The fresh fruits are mainly sold to fruit supermarkets while the processed fruit products are mainly sold to manufacturers for further processing into fruit juice and other fruit related foods.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The financial statements represent the accounts of the Company. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.

Use of estimates

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Segment information

The Company identifies and classifies its operating segment based on the nature of the products with similar economic characteristics. No segment information is provided as the Company only has one business and geographical segment. The Company's reportable segment is the manufacture and sell of foods products, which the operations are located in PRC and the sales were predominately made to customers located in the PRC.

Customer and supplier concentration

Trade accounts receivable - 2 and 3 customers each accounted for more than 10% of the Company's trade accounts receivable as of March 31, 2008 and 2007, respectively. The trade accounts receivable from those customers represents approximately 33% and 43% of trade accounts receivable as of March 31, 2008 and 2007.

Net sales – 1 customer accounted for more than 10% of the Company's net sales incurred during the years ended March 31, 2008 and 2007. The net sales from such customer represent approximately 13.8% and 14.5% of the net sales incurred during the years ended March 31, 2008 and 2007.

The Company closely monitors the credit risk associated with its customers.

Accounts payable – 4 suppliers each accounted for more than 10% of the Company's accounts payable as of March 31, 2008 and 2007, respectively. The accounts payable to those suppliers represents approximately 91% and 93% of accounts payable as of March 31, 2008 and 2007.

Purchases – No supplier accounted for more than 10% of the Company's purchases made during the period for the years ended March 31, 2008 and 2007.

Cash equivalents

The Company considers all highly liquid investments with an original maturity date of three months or less to be cash equivalents.

Trade accounts receivable

In the normal course of business, the Company extends credit to customers. Trade accounts receivable, less allowance for doubtful accounts, reflect the net realizable value of receivables, and approximate fair value. On a regular basis, the Company evaluates its trade accounts receivable and establishes an allowance for doubtful accounts based on a combination of specific customer circumstances, credit conditions, and payment history. A receivable is considered past due if payments have not been received within the agreed upon invoice terms. No allowance for doubtful accounts at March 31, 2008 and 2007 were recorded. Trade accounts receivable is charged off against the allowance after management determines the potential for recovery is remote.

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Inventories

The cost of finished products inventories includes raw materials, director labor and indirect production costs. Inventories are states at the lower of cost or market. The Company uses first-in, first-out methods to value its inventories.

Fair value of financial instruments

The carrying amount of certain the Company's financial instruments, including cash and cash equivalents, trade accounts receivables, accounts payables, other current assets, other current liabilities and accrued expenses, approximates fair value due to the relatively short maturity.

Property, plant and equipment, net

Property and equipment are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred. The principal estimated useful lives generally are: buildings and leasehold improvements – 20 years; machinery and equipment - 10 years. Depreciation of property, plant and equipment was $1,128,000 and $962,000 for the years ended March 31, 2008 and 2007, respectively.

Revenue recognition

The Company recognizes revenue from sales of products, where persuasive evidence of an arrangement exists, delivery has occurred, the seller's price is fixed or determinable and collectibility is reasonably assured. This generally occurs when the customer receives the product or at the time title passes to the customer. Customers generally do not have the right to return product unless damaged or defective. Net sales are comprised of gross sales reduced by customer returns, trade promotions and discounts.

Shipping and handling costs

Shipping and handling costs are included in selling expenses. The shipping and handling costs for the years ended March 31, 2008 and 2007 was $1,276,000 and $1,053,000, respectively.

Impairment of long-lived assets

Long-lived assets, except goodwill and indefinite-lived intangible assets, are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net cash flows estimated by the Company to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are recorded as held for sale at the lower of carrying value or estimated net realizable value. During the fiscal year 2008 and 2007, no impairment on long-lived assets was recorded by the Company.

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment of long-lived assets (continued)

All lands in the PRC are owned by the PRC government. The government in the PRC, according to the relevant PRC law, may sell the right to use the land for a specific period of time. Thus, all of the Company's land purchases in the PRC are considered to be leasehold land and are stated at costless accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreements on a straight-line basis, which is 50 years and they will expire in 2055.

Advertising costs

Advertising costs are expensed as incurred. The total advertising costs were $106,000 and $25,000 for the years ended March 31, 2008 and 2007, respectively.

Other income recognition

Other income comprised of interest income and others.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the loan to the loan's net carrying amount.

Statutory reserves

The laws and regulations of the PRC require that before an enterprise distributes profits to its owners, it must first satisfy all tax liabilities, provide for losses in previous years, and make allocations. The statutory reserves include a surplus reserve fund and a common welfare fund. These statutory reserves represent restricted retained earnings.

Surplus reserve fund

The Company is required, as necessary, to transfer 10 percent of its net income, as determined in accordance with the PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50 percent of the Company's paid-in capital.

The transfer to this reserve must be made before distribution of any dividends to owners. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years' losses, if any, and may be utilized for business expansion or converted into equity by raising equity from existing owners in proportion to their equity holdings.

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Common welfare fund

The Company is required, as necessary, to transfer 5 percent to 10 percent of its net income, as determined in accordance with the PRC accounting rules and regulations, to the statutory common welfare fund. This fund can only be utilized on capital items for the collective benefit of the Company's employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation. The transfer to this fund must be made before distribution of any dividends to owners.

Income taxes

The Company accounts for income taxes under the provision of Statement of Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes ("SFAS 109") and related interpretations and guidance including FIN 58, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 ("Fin 48"), resulting in two components of income tax expense: current and deferred. Current income tax expense approximates taxes to be paid or refunded for the relevant periods. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred income tax assets and liabilities are computed for differences between the financial statements carrying amounts and the tax bases of existing assets and liabilities that will result in taxable or deductible amounts in the future, as well as from net operating loss and tax credit carryforwards, and are measured at the enacted tax laws and rates applicable in the years which the differences are expected to be recovered or settled. A deferred tax asset is recognized if it is more likely than not that a benefit will be realized. The Company's operations are primarily located in PRC and subject to PRC profits tax.

Related party transactions

A related party is generally defined as (i) any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the management or operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS 157, Fair Value Measurements ("SFAS 157"), which provides guidance about how to measure assets and liabilities that use fair value. SFAS 157 applies whenever another US GAAP standard requires (or permits) assets or liabilities to be measured at fair value but does not expand the use of fair value to any new circumstances. This standard also requires additional disclosures in both annual and quarterly reports. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FASB Staff Position ("FSP") 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13 ("FSP 157-1"), which states that SFAS 157 does not address fair value measurements for purposes of lease classification or measurement. In February 2008, the FASB issued FSP 157-2, Effective Date of FASB Statement No. 157 ("FSP 157-2"), which delays the effective date for non-financial assets and non-financial liabilities to fiscal years beginning after November 15, 2008, except for items that are measured at fair value in the financial statements on a recurring basis (at least annually). The Company is currently evaluating the impact of adopting SFAS 157.

In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115 ("SFAS 159"), which is effective for fiscal years that begin after November 15, 2007. This standard permits entities to choose to measure many financial instruments and certain other items at fair value and consequently report unrealized gains and losses on such items in earnings. The Company has elected not to adopt the fair value provisions of SFAS 159, which does not have a significant impact of its financial position, cash flows and results of operations.

In December 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations ("SFAS 141(R)"). SFAS 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141(R) will be effective for financial statements issued for fiscal years beginning after December 15, 2008, and will be adopted by the Company beginning in the first quarter of 2009. The Company is currently evaluating the impact of adopting SFAS 141(R).

In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No.51 ("SFAS 160"). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent's ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 will be effective for financial statements issued for fiscal years beginning after December 15, 2008, and will be adopted by the Company beginning in the first quarter of 2009. The Company is evaluating the impact of adopting SFAS 160.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. SFAS 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk-related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. SFAS 161 will be effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and will be adopted by the Company beginning in the first quarter of 2009. The Company is currently evaluating the impact of adopting SFAS 161.

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS 162"). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with accounting principles generally accepted in the United States of America. The Company is currently evaluating the impact of adopting SFAS 162.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force ("EITF")), the American Institute of Certified Public Accountants ("AICPA"), and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.

NOTE 4 - INVENTORIES

Inventories by major categories at March 31 are as follows:

	March 31
	2008	2007
	$	$
Finished products	1,888,650	1,203,118
Raw materials	67,075	109,550
Total inventories	1,955,725	1,312,668

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 5 - OTHER CURRENT ASSETS

Other current assets by major categories at March 31 are as follows:

	March 31
	2008	2007
	$	$
Prepayments	4,987	4,524
Other receivables	109,878	7,751
	114,865	12,275

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net, at March 31 are summarized as follows:

	March 31
	2008	2007
	$	$
Buildings	2,582,958	2,343,119
Machinery	11,175,444	10,137,757
Furniture, fixtures and office equipment	35,886	32,554
Motor vehicles	45,000	40,822
Total	13,839,288	12,554,252
Less: accumulated depreciation	(3,163,546)	(1,781,432)
	10,675,742	10,772,820

At March 31, 2008 and 2007, certain of the Company's plant and machinery with an aggregate net book value of approximately $3,809,000 and $1,752,000 as of March 31, 2008 and 2007, respectively, were pledged to secure the bank borrowings.

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 7 - BORROWINGS

The Company's borrowings at March 31 consist of the following:

	March 31
	2008	2007
	$	$
Bank borrowings	2,848,110	3,229,578
Less: bank borrowings due after one year	-	(3,229,578)
Short-term borrowings	2,848,110	-

The interest rates are based on bank's best lending rate plus a certain percentage and the credit lines are normally subject to periodic review. The range of effective interest rates (which are also equal to contracted interest rates) on the Company's borrowings for the year ended March 31, 2008 was 8.42% per annum (2007: 7.25% per annum). Plant and machinery with an aggregate net book value of approximately $3,809,000 and $1,752,000 as of March 31, 2008 and 2007, respectively, were pledged to secure such bank borrowings. The maturity date of the outstanding bank borrowing as of March 31, 2008 is August 23, 2008.

NOTE 8 - OTHER PAYABLES AND ACCRUED EXPENSES

Other payables and accrued expenses by major categories at March 31 are summarized as follows:

	March 31
	2008	2007
	$	$
Other payables	57,530	485,878
VAT payables	229,838	271,426
Accruals	206,910	172,726
	494,278	930,030

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 9 - OWNERS' EQUITY

Paid in capital

The paid in capital of the Company is $1,206,738. As of March 31, 2008 and 2007, the paid in capital has been contributed by the owners in full.

Dividend declared

On March 31, 2007, the board of directors declared a dividend of $7,105,071 to owners of record as of March 31, 2007. The dividend declared on March 31, 2007 was paid during the year ended March 31, 2008.

NOTE 10 - PRC CONTRIBUTION PLAN

Employees of the Company are entitled to retirement benefits calculated with reference to their salaries basis upon retirement and their length of service in accordance with a PRC government-managed retirement plan. The PRC government is directly responsible for the payments of the benefits to these retired employees. The Company is required to make contributions to the government-managed retirement plan based on certain percentages of the employees' monthly salaries. The amounts contributed by the Company were approximately $90,000 and $62,000 for the years ended March 31, 2008 and 2007, respectively.

NOTE 11 - PROVISIONS FOR INCOME TAXES

The Company was established in the PRC in April 2004 as a PRC domestic enterprise and was subject to PRC's enterprise income tax. Pursuant to the PRC Income Tax Law as at that moment, enterprise income taxes were generally imposed at a statutory rate of 33%, which comprised 30% national income tax and 3% local income tax. However, the Company, being a hi-tech enterprise in the Heilongjiang province, has been granted a preferential tax treatment by the State Tax Bureau of the PRC. According to the PRC Income Tax Law and various approval documents issued by the Tax Bureau, the Company was exempt from enterprise income taxes for two years from the year which the Company began incurring net profit. Accordingly, the Company was not subject to enterprise income taxes for the year 2004 and 2005. The Company's profits for the period subsequent to 2005 were taxed at a rate of 15%.

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 11 - PROVISIONS FOR INCOME TAXES (CONTINUED)

On March 16, 2007, the Fifth Plenary Session of the Tenth National People's Congress passed the Corporate Income Tax Law of the PRC which will take effect on January 1, 2008. According to the new tax law, the applicable corporate income tax rate for domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. While the new tax law equalizes the tax rates for domestically-owned and foreign-invested companies, preferential tax treatment would continue to be given to companies in certain encouraged sectors and to enterprises classified as high and new technology companies, whether domestically-owned or foreign-invested enterprises. The new tax law also provides a five-year transition period starting from its effective date for those enterprises which were established before the promulgation date of the new tax law and which were entitled to a preferential tax treatment. The tax rate of such enterprises will transition to the uniform tax of 25% within a five-year transition period.

In July 2006, the FASB issued FIN 48, which clarifies the accounting and disclosure for uncertainty in tax positions, as defined in SFAS No. 109. FIN 48 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.

The Company adopted the provisions of FIN 48 effective April 1, 2007. Based on its FIN 48 analysis, the Company concluded that the adoption of FIN 48 did not have any impact on the Company's total liabilities or owners' equity. The Company classified interests and/or penalties related to income tax matters in income tax expenses. As of March 31, 2008, the Company did not have interests and penalties related to uncertain tax positions. The Company does not anticipate any significant increases or decrease to its liabilities for unrecognized tax benefits within the next twelve months.

The provision for income taxes appearing in the statement of income represents the current tax expenses. A reconciliation between the provisions for income taxes computed by PRC enterprise income tax rate to income before income before income taxes is as follows:

	March 31
	2008	2007
	%	%
Statutory rate	25	33
Tax effect of preferential tax treatment granted by the State Tax Bureau of the PRC	(14)	(18)
Tax effect of change in enterprise tax rate*	6	-
	17	15

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 11 - PROVISIONS FOR INCOME TAXES (CONTINUED)

*

The tax effect of change in enterprise tax rate represents the change of enterprise income taxes rate to 25% effective January 1, 2008 from a preferential tax rate of 15% up to December 31, 2007.

NOTE 12 - COMMITMENTS AND CONTINGENCIES

Leases commitments

The Company leases certain office premises and buildings under non-cancelable leases. Rental expenses under operating leases for the years ended March 31, 2008 and 2007 were approximately $30,000 and $21,000, respectively.

As of March 31, 2008, future minimum lease payments under non-cancelable operating leases agreements through June 29, 2008 were as follows:

2009 $ 8,043

Economic environment

Since the Company's operations are conducted in the PRC, the Company is subject to special considerations and significant risks. These risks include, among others, the political, economic and legal environments. The Company's result from operations may, among other things, be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to: laws and regulations, anti-inflationary measures and rates and methods of taxation.

Foreign currency remittance

The Company's revenue is earned in the PRC in the PRC's currency of Renminbi. The transfer of Renminbi outside the PRC requires approval of the PRC government.

DAQING LONGHEDA FOOD COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS

NOTE 13 - PRC PROFIT APPROPRIATION AND RESTRICTION ON CAPITAL REPARTRIATION

Pursuant to the laws applicable to the Company, the Company must make appropriations from after-tax profit to non-distributable reserve funds. These reserves included a (1) general reserve, (2) enterprise expansion fund and (3) staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires annual appropriations of not less then 10% of after-tax profit (as determined under accounting principles and financial regulations applicable to PRC enterprises at each year-end); the other fund appropriations are at the Company's discretion. These reserve funds can only be used for specific purposes and are not distributable as cash dividends. As of March 31, 2008 and 2007, the balance of these reserve funds amounted to approximately $1,713,000 and $1,213,000, respectively.

In addition to these reserves, the paid in capital of the Company are also restricted.

[End of financial statements.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of
Fezdale Investments Limited

We have audited the accompanying consolidated balance sheet of Fezdale Investments Limited and its subsidiaries as of March 31, 2008, and the related consolidated statement of income, changes in shareholders' equity and cash flows for the period from August 22, 2007 (date of inception) to March 31, 2008 then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Fezdale Investments Limited and its subsidiaries as of March 31, 2008, and the consolidated results of their operations and their cash flows for the period from August 22, 2007 (date of inception) to March 31, 2008 then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ HLB Hodgson Impey Cheng          

Chartered Accountants
Certified Public Accountants

Hong Kong, August 11, 2008
..............................................................

FEZDALE INVESTMENTS LIMITED ANT ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
MARCH 31, 2008

	$
ASSETS
Current Assets
Cash and cash equivalents	7,104,849
Trade accounts receivable	1,921,457
Inventories	1,955,725
Other current assets	114,865
Total Current Assets	11,096,896
Property, plant and equipment, net	7,173,523
Land use rights, net	318,120
TOTAL ASSETS	18,588,539
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Short term borrowings	2,848,110
Accounts payable	159,078
Consideration payable	5,353,755
Other payables and accrued expenses	494,278
Income taxes payable	607,680
Amount due to an affiliate	57,219
Total Current Liabilities	9,520,120
Minority interests	4,039,286
Commitments and contingencies
Shareholders' Equity
Share capital	1,000
Statutory reserves - restricted	1,713,065
Other comprehensive income	812,312
Retained earnings	2,502,756
Total Shareholders' Equity	5,029,133
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	18,588,539

See accompanying notes to consolidated financial statements

FEZDALE INVESTMENTS LIMITED ANT ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
FOR THE PERIOD FROM AUGUST 22, 2007 (INCEPTION) TO MARCH 31, 2008

	$
Net sales	13,527,015
Cost of products sold	(7,499,879)
Gross Profit	6,027,136
Selling, general and administrative expenses	(1,395,100)
Operating income	4,632,036
Interest expense	(250,985)
Other income	30,569
Income before income taxes and minority interests	4,411,620
Provision for income taxes	(882,939)
Income before minority interests	3,528,681
Minority interests	(895,780)
Net income	2,632,901
Earnings per share
Basic and diluted	2,633
Weighted average number of common shares outstanding
Basic and diluted	1,000

See accompanying notes to consolidated financial statements

FEZDALE INVESTMENTS LIMITED ANT ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

				Accumulated
				Other	Total
	Share	Statutory	Retained	Comprehensive	Shareholders
	Capital	Reserves	Earnings	Income	Equity
	$	$	$	$	$
Subscribers' shares issued upon incorporation	1,000	-	-	-	1,000
Acquisition of subsidiaries	-	1,539,538	-	114,600	1,654,138
Net income	-	-	2,632,901	-	2,632,901
Other comprehensive income:
Currency translation adjustment	-	-	-	697,712	697,712
Comprehensive income					3,330,613
Minority interests' share of statutory reserves	-	43,382	-	-	43,382
Transfer to statutory reserves	-	130,145	(130,145)	-	-
Balance, March 31, 2008	1,000	1,713,065	2,502,756	812,312	5,029,133

See accompanying notes to consolidated financial statements

FEZDALE INVESTMENTS LIMITED ANT ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 22, 2007 (INCEPTION) TO MARCH 31, 2008

	$
Operating Activities:
Net income	2,632,901
Adjustment to reconcile net income to net cash provided by operating activities
Depreciation and amortization	207,836
Minority interests	927,493
Changes in operating assets and liabilities:
Trade accounts receivable, net	5,271,640
Inventories	4,088,234
Other current assets	624,997
Accounts payable	(603,475)
Other payables and accrued expenses	(4,437,157)
Tax payable	388,569
Net Cash Provided by Operating Activities	9,101,038
Investing Activities:
Cash inflow from acquisition of subsidiaries	423,566
Net Cash Used in Investing Activities	423,566
Financing Activities:
Proceeds from borrowings	(3,232,067)
Net Cash Used in Financing Activities	(3,232,067)
Effect of exchange rate on cash and cash equivalents	812,312
Net increase in cash and cash equivalents	7,104,849
Cash and cash equivalents at end of period	7,104,849
Supplemental disclosures of cash flows information:
Cash paid during the period for interest	250,985
Cash paid during the period for income taxes	275,259

See accompanying notes to consolidated financial statements

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND OPERATIONS

Organization

Fezdale Investments Limited (the "Company") is a private limited liability company incorporated in British Virgin Island on August 22, 2007.

In October 2007, Solor Sun Holdings Limited ("Solor Sun"), a subsidiary of the Company, entered in a share purchase agreement with six owners of Daqing Longheda Food Company Limited ("Longheda") that the six owners of Longheda agreed to transfer an aggregate of 75% interests in Longheda to Solar Sun for consideration in aggregate of RMB40,000,000. Since the beneficial owners of the Group (as defined below) were third parties independent of Longheda and the Group had obtained the controlling interests in Longheda subsequent to the acquisition, the acquisition was accounted for using purchase method of accounting, which the results of operations of Longheda are included in the consolidated income statement effective from the completion date of the acquisition.

Nature of Operations

The Company and its subsidiaries (the "Group") manufacture and sell a variety of food products processed from rare superfruits that grow in Northeast China. Currently, the Group processes 4 types of rare superfruits including golden berry, crab apple, blueberry and raspberry, and sell fresh fruits and 4 types of fruit based products including fruit concentrate, nectar, glazed fruits and fruit beverage. The Group sells all of its products through 68 domestic distributors located in 19 provinces and 39 cities. The fresh fruits are mainly sold to fruit supermarkets while the processed fruit products are mainly sold to manufacturers for further processing into fruit juice and other fruit related foods.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts for the Company and all of its wholly-owned subsidiaries after elimination of intercompany transactions and balances.

Basis of presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Foreign currency translation

Assets and liabilities of the Company's foreign subsidiaries are translated using the exchange rates in effect at the balance sheet date, while income and expenses are translated using average rate. Translation adjustments are reported as a component of shareholders' equity in accumulated other comprehensive income.

Use of estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in United States of America ("US GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Segment information

The Group identifies and classifies its operating segment based on the nature of the products with similar economic characteristics. No segment information is provided as the Group only has one business and geographical segment. The Group's reportable segment is the manufacture and sell of food products, which operations are located in PRC and sales were predominately made to customers located in the PRC.

Customer and supplier concentration

Trade accounts receivable - 2 customers each accounted for more than 10% of the Group's trade accounts receivable as of March 31, 2008. The trade accounts receivable from those customers represents approximately 33% of trade accounts receivable as of March 31, 2008.

Net sales – 2 customers each accounted for more than 10% of the Group's net sales incurred during the period ended March 31, 2008. The net sales from those customers represent approximately 25% of the net sales incurred during the period from inception to March 31, 2008.

The Group closely monitors the credit risk associated with its customers.

Accounts payable – 4 suppliers each accounted for more than 10% of the Group's accounts payable as of March 31, 2008. The accounts payable to those suppliers represents approximately 91% of accounts payable as of March 31, 2008.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Purchases – No supplier accounted for more than 10% of the Group's purchases made during the period ended from inception to March 31, 2008.

Cash equivalents

The Group considers all highly liquid investments with an original maturity date of three months or less to be cash equivalents.

Trade accounts receivable

In the normal course of business, the Group extends credit to customers. Trade accounts receivable, less allowance for doubtful accounts, reflect the net realizable value of receivables, and approximate fair value. On a regular basis, the Group evaluates its trade accounts receivable and establishes an allowance for doubtful accounts based on a combination of specific customer circumstances, credit conditions, and payment history. A receivable is considered past due if payments have not been received within the agreed upon invoice terms. No allowance for doubtful accounts at March 31, 2008 was recorded. Trade accounts receivable is charged off against the allowance after management determines the potential for recovery is remote.

Inventories

The cost of finished products inventories includes raw materials, direct labor and indirect production costs. Inventories are stated at the lower of cost or market. The Group uses first-in, first-out methods to value its inventories.

Fair value of financial instruments

The carrying amount of certain of the Group's financial instruments, including cash and cash equivalents, trade accounts receivable, accounts payable, other current assets, other payables and accrued expenses, approximates fair value due to the relatively short maturity.

Property, plant and equipment, net

Property and equipment are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred. The principal estimated useful lives generally are: buildings and leasehold improvements – 20 years; machinery and equipment - 10 years. Depreciation of property, plant and equipment was $207,836 for the period from inception to March 31, 2008.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Goodwill is tested at least annually for impairment using a two-step process. The first step is to identify a potential impairment, and the second step measures the amount of the impairment loss, if any. Impairment exists if the carrying amount of a reporting unit's goodwill exceeds its estimated fair value.

Negative goodwill represents the excess fair value of the net tangible and identifiable intangible assets acquired in a business combination over the purchase price. The negative goodwill is allocated as a pro rate reduction of the amounts assigned to the assets acquired excluding financial assets, deferred taxes and other current assets. If negative goodwill exceeds the amount of those assets, the remaining excess shall be recognized as an extraordinary gain in the period which the business combination is completed. (See Note 4)

Comprehensive income

Comprehensive income is comprised of net income and other comprehensive income.

Revenue recognition

The Group recognizes revenue from sales of products, where persuasive evidence of an arrangement exists, delivery has occurred, the seller's price is fixed or determinable and collectibility is reasonably assured. This generally occurs when the customer receives the product or at the time title passes to the customer. Customers generally do not have the right to return product unless damaged or defective. Net sales are comprised of gross sales reduced by customer returns, trade promotions and discounts.

Shipping and handling costs

Shipping and handling costs are included in selling expenses. The shipping and handling costs for the period from inception to March 31, 2008 was $438,831.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment of long-lived assets

Long-lived assets, except goodwill and indefinite-lived intangible assets, are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net cash flows estimated by the Group to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are recorded as held for sale at the lower of carrying value or estimated net realizable value. During the period, no impairment on long-lived assets was recorded by the Group.

All lands in the PRC are owned by the PRC government. The government in the PRC, according to the relevant PRC law, may sell the right to use the land for a specific period of time. Thus, all of the Group's land located in the PRC is considered to be leasehold land and is stated at costless accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreements on a straight-line basis, which is 50 years and they will expire in 2055. Amortization was $3,975 for the period from inception to March 31, 2008.

Advertising costs

Advertising costs are expensed as incurred. The total advertising costs were $86,008 for the period from inception to March 31, 2008.

Other income recognition

Other income comprised of interest income and others.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the loan to the loan's net carrying amount.

Statutory reserves

The laws and regulations of the PRC require that before an enterprise distributes profits to its owners, it must first satisfy all tax liabilities, provide for losses in previous years, and make allocations. The statutory reserves include a surplus reserve fund and a common welfare fund. These statutory reserves represent restricted retained earnings. The details of surplus reserve fund and common welfare fund are as follows:

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Surplus reserve fund

The Company's subsidiary in PRC is required, as necessary, to transfer 10 percent of its net income, as determined in accordance with the PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50 percent of that subsidiary's paid-in capital.

The transfer to this reserve must be made before distribution of any dividends to owners. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years' losses, if any, and may be utilized for business expansion or converted into equity by raising equity from existing owners in proportion to their equity holdings.

Common welfare fund

The Company's subsidiary in PRC is required, as necessary, to transfer 5 percent to 10 percent of its net income, as determined in accordance with the PRC accounting rules and regulations, to the statutory common welfare fund. This fund can only be utilized on capital items for the collective benefit of that subsidiary's employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation. The transfer to this fund must be made before distribution of any dividends to owners.

Income taxes

The Group accounts for income taxes under the provision of Statement of Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes ("SFAS 109") and related interpretations and guidance including FIN 58, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 ("Fin 48"), resulting in two components of income tax expense: current and deferred. Current income tax expense approximates taxes to be paid or refunded for the relevant periods. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred income tax assets and liabilities are computed for differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities that will result in taxable or deductible amounts in the future, as well as from net operating loss and tax credit carryforwards, and are measured at the enacted tax laws and rates applicable in the years which the differences are expected to be recovered or settled. A deferred tax asset is recognized if it is more likely than not that a benefit will be realized. The Group's operations are primarily located in PRC and subject to PRC profits tax.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Earnings per share

Basic earnings per is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period.

Related party transactions

A related party is generally defined as (i) any person that holds 10% or more of the Group's securities and their immediate families, (ii) the Group's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Group, or (iv) anyone who can significantly influence the management or operating decisions of the Group. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS 157, Fair Value Measurements ("SFAS 157"), which provides guidance about how to measure assets and liabilities that use fair value. SFAS 157 applies whenever another US GAAP standard requires (or permits) assets or liabilities to be measured at fair value but does not expand the use of fair value to any new circumstances. This standard also requires additional disclosures in both annual and quarterly reports. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FASB Staff Position ("FSP") 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13 ("FSP 157-1"), which states that SFAS 157 does not address fair value measurements for purposes of lease classification or measurement. In February 2008, the FASB issued FSP 157-2, Effective Date of FASB Statement No. 157 ("FSP 157-2"), which delays the effective date for non-financial assets and non-financial liabilities to fiscal years beginning after November 15, 2008, except for items that are measured at fair value in the financial statements on a recurring basis (at least annually). The Group is currently evaluating the impact of adopting SFAS 157.

In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115 ("SFAS 159"), which is effective for fiscal years that begin after November 15, 2007. This standard permits entities to choose to measure many financial instruments and certain other items at fair value and consequently report unrealized gains and losses on such items in earnings. The Group has elected not to adopt the fair value provisions of SFAS 159, which does not have a significant impact of its financial position, cash flows and results of operations.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In December 2007, the FASB issued SFAS 141 (revised 2007), Business Combinations ("SFAS 141(R)"). SFAS 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141(R) will be effective for financial statements issued for fiscal years beginning after December 15, 2008, and will be adopted by the Group beginning in the first quarter of 2009. The Group is currently evaluating the impact of adopting SFAS 141(R).

In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No.51 ("SFAS 160"). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent's ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 will be effective for financial statements issued for fiscal years beginning after December 15, 2008, and will be adopted by the Group beginning in the first quarter of 2009. The Group is evaluating the impact of adopting SFAS 160.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. SFAS 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk-related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. SFAS 161 will be effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and will be adopted by the Group beginning in the first quarter of 2009. The Group is currently evaluating the impact of adopting SFAS 161.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS 162"). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with accounting principles generally accepted in the United States of America. The Group is currently evaluating the impact of adopting SFAS 162.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force ("EITF")), the American Institute of Certified Public Accountants ("AICPA"), and the SEC did not or are not believed by management to have a material impact on the Group's present or future financial statements.

NOTE 4 – ACQUISITION OF LONGHEDA

In October 2007, Solor Sun Holdings entered in a share purchase agreement with six owners of Longheda to acquire 75% interests in Longheda with consideration in aggregate of RMB40,000,000. This acquisition was accounted for using the purchase method of accounting. Since the beneficial owners of the Company were third parties independent of Longheda, the acquisition was accounted for using the purchase method of accounting. As of the acquisition date, the Group recorded the fair values of Longheda assets acquired and liabilities assumed. The allocation of the purchase price to assets acquired and liabilities assumed as at the date of acquisition is as follows:

	$
Cash and cash equivalents	829,317
Trade accounts receivable	7,193,097
Inventories	6,043,959
Other current assets	738,862
Property, plant and equipment, net	11,115,278
Land use right, net	474,453
Borrowings	(6,080,177)
Accounts payable	(762,553)

Other payables and accrued expenses	(4,931,435)
Tax payable	(219,111)
Net assets acquired	14,401,690
Minority interests	(3,186,888)
Statutory reserves	(1,539,538)
Translation adjustment	(114,600)
Negative goodwill	(4,156,062)
Total purchase price	(5,404,602)

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – ACQUISITION OF LONGHEDA  (CONTINUED)

The allocation of the purchase price to assets acquired and liabilities assumed as at the date of acquisition resulted in negative goodwill of $4,156,062. In accordance with SFAS No. 141, Business Combinations, the negative goodwill was allocated as a pro rata reduction of the amounts assigned to the assets acquired excluding financial assets, deferred taxes and other current assets. This resulted in the following allocation of negative goodwill:

	$
Property, plant and equipment, net	3,985,924
Land use right, net	170,138
Negative goodwill	4,156,062

Subsequent to the completion date of the acquisition on November 12, 2007, the results of operations of Longheda have been included in the consolidated income statement of the Group.

The following is the pro forma results of operations of the Group for the years ended March 31, 2008 and 2007 as if the acquisition of 75% interest in Longheda completed on April 1, 2007 and Fezdale was existed at April 1, 2007:

		2008		2007
Net sales	$	34,510,140	$	23,022,480
Cost of products sold		(18,947,091)		(11,609,731)
Gross Profit		15,563,049		11,412,749
Selling, general and administrative expenses		(4,008,817)		(2,966,741)

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – ACQUISITION OF LONGHEDA  (CONTINUED)

Other expenses, net		(372,151)		(349,045)
Income before income taxes and minority interests		11,182,081		8,096,963
Provision for income taxes		(2,035,305)		(1,341,195)
Income before minority interests		9,146,776		6,755,768
Minority interests		(2,286,694)		(1,688,942)
Net income	$	6,860,082	$	5,066,826
Earnings per share
Basic and diluted	$	6,860	$	5,067

NOTE 5 - INVENTORIES

Inventories by major categories at March 31, 2008 are as follows:

	$
Finished products	1,888,650
Raw materials	67,075
Total inventories	1,955,725

NOTE 6 - OTHER CURRENT ASSETS

Other current assets by major categories at March 31, 2008 are as follows:

	$
Prepayments	4,987
Other receivables	109,878
	114,865

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net, at March 31, 2008 are summarized as follows:

	$
Buildings	1,846,936
Machinery	7,254,044
Furniture, fixtures and office equipment	28,016
Motor vehicles	22,304
Total	9,151,301
Less: accumulated depreciation	(1,977,778)
	7,173,523

At March 31, 2008, certain of the Group's plant and machinery with an aggregate net book value of approximately $2,559,000 were pledged to secure the bank borrowings.

NOTE 8 - BORROWINGS

The Group's borrowings at March 31, 2008 consist of the following:

	$
Bank borrowings	2,848,110

The interest rates are based on the bank's best lending rate plus a certain percentage and the credit lines are normally subject to periodic review. The range of effective interest rates (which are also equal to contracted interest rates) on the Group's borrowings for the period ended March 31, 2008 was 8.42% per annum. Plant and machinery with an aggregate net book value of approximately $2,559,000 as of March 31, 2008 were pledged to secure such bank borrowings. The maturity date of the outstanding bank borrowing as of March 31, 2008 is August 23, 2008.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - OTHER PAYABLES AND ACCRUED EXPENSES

Other payables and accrued expenses by major categories at March 31, 2008 are summarized as follows:

	$
Other payables	57,530
VAT payables	229,838
Accruals	206,910
	494,278

NOTE 10 - SHAREHOLDERS' EQUITY

The authorized share capital of the Company is $50,000 divided into 50,000 ordinary shares of $1 each. Upon incorporation, two shareholders subscribed for a total of 1,000 ordinary shares of $1 each at par.

NOTE 11 - PRC CONTRIBUTION PLAN

Employees of the Group are entitled to retirement benefits calculated with reference to their salaries basis upon retirement and their length of service in accordance with a PRC government-managed retirement plan. The PRC government is directly responsible for the payments of the benefits to these retired employees. The Group is required to make contributions to the government-managed retirement plan based on certain percentages of the employees' monthly salaries. The amounts contributed by the Group were approximately $16,836 for the period from inception to March 31, 2008.

NOTE 12 - PROVISION FOR INCOME TAXES

The provision for income tax is as follows:

	2008
Current:	$
PRC	927,493
Others jurisdictions	-
	927,493
Deferred:
PRC	-
Others jurisdictions	-
	-
Total income tax	927,493

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - PROVISION FOR INCOME TAXES (CONTINUED)

At March 31, 2008, the Group did not have material valuation allowance that would result into any deferred tax assets.

The Group's operations are conducted in the PRC and are subject to PRC's enterprise income tax. Pursuant to the PRC Income Tax Law prior to January 1, 2008, enterprise income taxes were generally imposed at a statutory rate of 33%, which comprised 30% national income tax and 3% local income tax. However, the Group has been granted a preferential tax treatment by the State Tax Bureau of the PRC as the Group was considered as a hi-tech enterprise in the Heilongjiang province. According to the PRC Income Tax Law and various approval documents issued by the Tax Bureau, the Group's profits for the period prior to 2008 were taxed at a rate of 15%.

On March 16, 2007, the Fifth Plenary Session of the Tenth National People's Congress passed the Corporate Income Tax Law of the PRC which will take effect on January 1, 2008. According to the new tax law, the applicable corporate income tax rate for domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. While the new tax law equalizes the tax rates for domestically-owned and foreign-invested companies, preferential tax treatment would continue to be given to companies in certain encouraged sectors and to enterprises classified as high and new technology companies, whether domestically-owned or foreign-invested enterprises. The new tax law also provides a five-year transition period starting from its effective date for those enterprises which were established before the promulgation date of the new tax law and which were entitled to a preferential tax treatment. The tax rate of such enterprises will transition to the uniform tax of 25% within a five-year transition period.

In July 2006, the FASB issued FIN 48, which clarifies the accounting and disclosure for uncertainty in tax positions, as defined in SFAS No. 109. FIN 48 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - PROVISION FOR INCOME TAXES (CONTINUED)

The Group adopted the provisions of FIN 48 effective August 22, 2007. Based on its FIN 48 analysis, the Group concluded that the adoption of FIN 48 did not have any impact on the Group's total liabilities or owners' equity. The Group's classifies interests and/or penalties related to income tax matters in income tax expenses. As of March 31, 2008, the Group did not have interests and penalties related to uncertain tax positions. The Group does not anticipate any significant increases or decrease to its liabilities for unrecognized tax benefits within the next twelve months.

The provision for income taxes appearing in the consolidated statement of income represents the current tax expenses. A reconciliation between the provision for income taxes computed by PRC enterprise income tax rate to income before income taxes is as follows:

	2008
	%
Statutory rate	25
Tax effect of preferential tax treatment granted by the State Tax Bureau of the PRC	(6)
Tax effect of change in enterprise tax rate*	-
	19

*

The tax effect of change in enterprise tax rate represents the change of enterprise income taxes rate to 25% effective January 1, 2008 from a preferential tax rate of 15% up to December 31, 2007.

NOTE 13 – EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – EARNINGS PER SHARE (CONTINUED)

	2008
	$
Numerator:
Net income	2,632,910
Denominator:

Weighted average number of shares outstanding	1,000
Basis earnings per share	2,633

As of March 31, 2008, the Company did not have dilutive securities or instruments.

NOTE 14 - COMMITMENTS AND CONTINGENCIES

Leases commitments

The Group leases certain office premises and buildings under non-cancelable leases through June 29, 2008. Rental expenses under operating leases for the period from inception to March 31, 2008 were approximately $12,515.

As of March 31, 2008, future minimum lease payments under non-cancelable operating leases agreements were as follows:

2009 $ 8,043

Economic environment

Since the Group's operations are conducted in the PRC, the Group is subject to special considerations and significant risks. These risks include, among others, the political, economic and legal environments. The Group's result from operations may, among other things, be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to: laws and regulations, anti-inflationary measures and rates and methods of taxation.

Foreign currency remittance

The Group's revenue is earned in the PRC in the PRC's currency of Renminbi. The transfer of Renminbi outside the PRC requires approval of the PRC government.

FEZDALE INVESTMENTS LIMITED AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 - PRC PROFIT APPROPRIATION AND RESTRICTION ON CAPITAL REPARTRIATION

Pursuant to the laws applicable to the Group, the Group must make appropriations from after-tax profit to non-distributable reserve funds. These reserves include a (1) general reserve, (2) enterprise expansion fund and (3) staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires annual appropriations of not less then 10% of after-tax profit (as determined under accounting principles and financial regulations applicable to PRC enterprises at each year-end); the other fund appropriations are at the Group's discretion. These reserve funds can only be used for specific purposes and are not distributable as cash dividends. As of March 31, 2008, the balance of these reserve funds amounted to approximately $1,713,000.

NOTE 16 – AMOUNT DUE TO AN AFFILIATE

The amount due to an affiliate is unsecured, interest free and have no fixed terms of repayment.

NOTE 17 – SUBSEQUENT EVENTS

In May 2008, Solor Sun Holdings entered in another share purchase agreement with six owners of Longheda to acquire the remaining 25% interests in Longheda with considerations in aggregate of RMB10,000,000. Subsequent to the acquisition of 25% interest in Longheda, the Company has 100% indirectly interest in Longheda.

[End of financial statements.]

EXHIBIT INDEX

Exhibit No.	Description
2.1	Share Exchange Agreement, dated August 14, 2008, among the registrant, Fezdale Investments Limited and its shareholders.
3.1*	Articles of Incorporation of the registrant as filed with the Secretary of State of Nevada April 16, 1999 [incorporated by reference to Exhibit 1 to the registrant's Annual Report on Form 10-KSB filed on January 27, 2000].
3.2*	Articles of Merger as filed with the Secretary of State of Nevada May 7, 1999 [incorporated by reference to Exhibit 1 to the registrant's Annual Report on Form 10-KSB filed on January 27, 2000].
3.3*	Certificate of Amendment to Articles of Incorporation of the registrant as filed with the Secretary of State of Nevada June 12, 2008 [incorporated by reference to Exhibit 3.1 to the registrant's Current Report on Form 8-K filed on June 20, 2008].
3.4*	Amended and Restated Bylaws of the registrant adopted on June 19, 2008 [incorporated by reference to Exhibit 3.2 to the registrant's Current Report on Form 8-K filed on June 20, 2008].

4.1	Form of Lock-up Agreement, dated August 14, 2008.
10.1	Form of Securities Purchase Agreement, dated August 14, 2008.
10.2	Make Good Escrow Agreement, dated August 14, 2008, by and among the registrant, WLT Brothers Capital, Inc., Mr. Yiu Fai Kung and Securities Transfer Corporation.
10.3	Make Good Escrow Agreement, dated August 14, 2008, by and among the registrant, HFG International, Limited, Mr. Yiu Fai Kung and Securities Transfer Corporation.
10.4	Holdback Escrow Agreement, dated August 14, 2008, by and among the registrant, WLT Brothers Capital, Inc. and Securities Transfer Corporation.
10.5	Form of Escrow Agreement, dated August 14, 2008.
10.6	English Summary of Form of Memorandum of Understanding by and between the registrant and the local governments
10.7	English Summary of Form of Distribution Contract
10.8	English Summary of Trademark License Agreement, by and between Daqing Longheda Food Company Limited and Changjun Yu, dated May 16, 2008
10.9	English Summary of Trademark License Agreement, by and between Daqing Longheda Food Company Limited and Changjun Yu, dated May 16, 2008
10.10	English Summary of Technology Cooperation Agreement, by and between Daqing Longheda Food Company Limited and College of Food of Heilongjiang Bai Yi Land Reclamation University, dated March 7, 2008
10.11	English Summary of Counter-Guarantee Agreement, by and between Daqing Longheda Food Company Limited and Daqing Industrial and Commercial Guarantee Co., Ltd., dated August 27, 2007
10.12	English Summary of Renminbi Loan Agreement, by and between Daqing Longheda Food Company Limited and Daqing Industrial and Commercial Bank, dated August 24, 2007
10.13	English Summary of Guarantee Agreement, by and between Daqing Industrial and Commercial Guarantee Co., Ltd. and Daqing Industrial and Commercial Bank, dated August 24, 2007
10.14	English Summary of License Agreement, by and between Daqing Longheda Food Company Limited and Shanda Xin Hua Interactive Entertainment Co., Ltd., dated September 15, 2005
10.15	Employment Summary, by and between the registrant and Colman Cheng, dated August 14, 2008
10.16	Employment Summary, by and between the registrant and Jinglin Shi, dated August 14, 2008
10.17	Employment Summary, by and between the registrant and Manjiang Yu, dated August 14, 2008
10.18	Employment Summary, by and between the registrant and Yu Changjun, dated August 14, 2008.
16	Letter from Pritchett, Siler & Hardy, P.C. regarding change in certifying accountant.
21	Subsidiaries of the registrant.
*Incorporated by Reference

EX-2.1

Exhibit 2.1

SHARE EXCHANGE AGREEMENT

BY AND AMONG

FASHION TECH INTERNATIONAL, INC.,

FEZDALE INVESTMENTS LIMITED

AND ITS SHAREHOLDERS

August 14, 2008

SHARE EXCHANGE AGREEMENT

This SHARE EXCHANGE AGREEMENT (this “Agreement”), dated as of August 14, 2008, is by and among Fashion Tech International, Inc., a Nevada corporation, (the “Parent”), Fezdale Investments Limited, a British Virgin Islands company (the “Company”), and the Shareholders of the Company identified on Annex A hereto (each, a “Shareholder”, and together, the “Shareholders”).  Each of the parties to this Agreement is individually referred to herein as a “Party” and collectively, as the “Parties.”

BACKGROUND

The Company has 1,000 shares of capital stock (the “Company Stock”) outstanding, all of which are held by the Shareholders.  Each Shareholder is the record and beneficial owner of the number of shares of Company Stock set forth opposite such Shareholder’s name on Annex A hereto.  Each Shareholder has agreed to transfer all of his, her or its (hereinafter “its”) shares of Company Stock in exchange for a number of newly issued shares of the Common Stock, par value $0.001 per share, of the Parent (the “Parent Stock”) that will, in the aggregate, constitute 91.3% of the issued and outstanding capital stock of the Parent on a fully-diluted basis as of and immediately after the Closing (as defined hereinafter).  The number of shares of Parent Stock to be received by each Shareholder is listed opposite each such Shareholder’s name on Annex A.  The aggregate number of shares of Parent Stock that is reflected on Annex A is referred to herein as the “Shares”.

The exchange of Company Stock for Parent Stock is intended to constitute a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986  (the “Code”), as amended.

The board of directors of the Parent and the Company have determined that it is desirable to effect this plan of reorganization and share exchange.

AGREEMENT

NOW THEREFORE, the Parties agree as follows:

Article I.

Exchange of Shares

Section 1.01

Exchange by Shareholders.  At the Closing (as defined in Section 1.02), each of the Shareholders shall sell, transfer, convey, assign and deliver to the Parent its Company Stock free and clear of all Liens (as defined below) in exchange for the Parent Stock listed on Annex A opposite such Shareholder’s name.

Section 1.02

Closing.  The closing (the “Closing”) of the transactions contemplated hereby (the “Transactions”) shall take place at the offices of Thelen Reid Brown Raysman & Steiner LLP in Washington, DC commencing at 9:00 a.m. local time on the second business day following the satisfaction or waiver of all conditions to the obligations of the parties to consummate the Transactions contemplated hereby (other than conditions with respect to actions the respective parties will take at the Closing itself), or such other date and time as the parties may mutually determine (the “Closing Date”).

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Article II.

Representations and Warranties of Shareholders

Each of the Shareholders hereby severally (and not jointly) represents and warrants to the Parent with respect to itself, as follows:

Section 2.01

Good Title.  Each Shareholder is the record and beneficial owner, and has good title to its Company Stock, with the right and authority to sell and deliver such Company Stock.  Upon delivery of any certificate or certificates duly assigned, representing the same as herein contemplated and/or upon registering of the Parent as the new owner of such Company Stock in the share register of the Company, the Parent will receive good title to such Company Stock, free and clear of all liens, security interests, pledges, equities and claims of any kind, voting trusts, shareholder agreements and other encumbrances (collectively, “Liens”).

Section 2.02

Power and Authority.  All acts required to be taken by the Shareholder to enter into this Agreement and to carry out the Transactions have been properly taken.  This Agreement constitutes a legal, valid and binding obligation of the Shareholder, enforceable against such Shareholder in accordance with the terms hereof.

Section 2.03

No Conflicts.  The execution and delivery of this Agreement by the Shareholder and the performance by the Shareholder of its obligations hereunder in accordance with the terms hereof: (a) will not require the consent of any third party or any central, provincial, regional, local, municipal or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (“Governmental Entity”) under any statutes, laws, ordinances, rules, regulations, orders, writs, injunctions, judgments, or decrees (collectively, “Laws”); (b) will not violate any Laws applicable to such Shareholder and (c) will not violate or breach any contractual obligation to which such Shareholder is a party.  

Section 2.04

No Finder’s Fee.  No Shareholder has created any obligation for any finder’s, investment banker’s or broker’s fee in connection with the Transactions.

Section 2.05

Purchase Entirely for Own Account.  The Parent Stock proposed to be acquired by the Shareholder hereunder will be acquired for investment for its own account, and not with a view to the resale or distribution of any part thereof, and the Shareholder has no present intention of selling or otherwise distributing the Parent Stock, except in compliance with applicable securities laws.

Section 2.06

Available Information.  The Shareholder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of investment in the Parent.

Section 2.07

Non-Registration. The Shareholder understands that the Parent Stock has not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, if issued in accordance with the provisions of this Agreement, will be issued by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Shareholder’s representations as expressed herein.  The non-registration shall have no prejudice with respect to any rights, interests, benefits and entitlements attached to the Parent Stock in accordance with the Parent charter documents or the laws of its jurisdiction of incorporation.

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Section 2.08

Restricted Securities. The Shareholder understands that the Parent Stock is characterized as “restricted securities” under the Securities Act inasmuch as this Agreement contemplates that, if acquired by the Shareholder pursuant hereto, the Parent Stock would be acquired in a transaction not involving a public offering.  The Shareholder further acknowledges that if the Parent Stock is issued to the Shareholder in accordance with the provisions of this Agreement, such Parent Stock may not be resold without registration under the Securities Act or the existence of an exemption therefrom.  The Shareholder represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect (“Rule 144”), and understands the resale limitations imposed thereby and by the Securities Act.

Section 2.09

Accredited Investor.  The Shareholder is an “accredited Investor” within the meaning of Rule 501 under the Securities Act and the Shareholder was not organized for the specific purpose of acquiring the Parent Stock.

Section 2.10

Legends.  It is understood that the Parent Stock will bear the following legend or one that is substantially similar to the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION STATEMENT IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

Additionally, the Parent Stock will bear any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended.

Article III.

Representations and Warranties of the Company

The Company represents and warrants as follows to the Parent that, except as set forth in the letter delivered from the Company to the Parent concurrently herewith (the “Company Disclosure Letter”), regardless of whether or not the Company Disclosure Letter is referenced below with respect to any particular representation or warranty:

Section 3.01

Organization, Standing and Power.  Each of the Company and its subsidiaries (the “Company Subsidiaries”) is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on the Company, a material adverse effect on the ability of the Company to perform its obligations under this Agreement or on the ability of the Company to consummate the Transactions (a “Company Material Adverse Effect”).  The Company and each Company Subsidiary is duly qualified to do business in each jurisdiction where the nature of its business or its ownership or leasing of its properties make such qualification necessary except where the failure to so qualify would not reasonably be expected to have a Company Material Adverse Effect.  The Company has delivered to the Parent true and complete copies of the memorandum and articles of association of the Company and such other constituent instruments of the Company as may exist, each as amended to the date of this Agreement (as so amended, the “Company Constituent Instruments”), and the comparable charter, organizational documents and other constituent instruments of each Company Subsidiary, in each case as amended through the date of this Agreement.  

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Section 3.02

Company Subsidiaries; Equity Interests.

(a)

The Company Disclosure Letter lists each Company Subsidiary and its jurisdiction of organization.  All the outstanding shares of capital stock or equity investments of each Company Subsidiary have been validly issued and are fully paid and nonassessable and are as of the date of this Agreement owned by the Company, by another Company Subsidiary or by the Company and another Company Subsidiary, free and clear of all Liens.

(b)

Except for its interests in the Company Subsidiaries, the Company does not as of the date of this Agreement own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person.  

Section 3.03

Capital Structure.  The authorized capital stock of the Company consists of 1,000 ordinary shares, of which 1,000 shares are issued and outstanding.  Except as set forth above, no shares of capital stock or other voting securities of the Company are issued, reserved for issuance or outstanding.  The Company is the sole record and beneficial owner of all of the issued and outstanding capital stock of each Company Subsidiary.  All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the applicable corporate laws of the British Virgin Islands, the Company Constituent Instruments or any Contract (as defined in Section 3.05) to which the Company is a party or otherwise bound. &n bsp;There are not any bonds, debentures, notes or other indebtedness of Company or any Company Subsidiary having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Company Stock or the common stock of any Company Subsidiary may vote (“Voting Company Debt”).  Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company or of any Company Subsidiary.  As of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company.  

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Section 3.04

Authority; Execution and Delivery; Enforceability.  The Company has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Transactions.  The execution and delivery by the Company of this Agreement and the consummation by the Company of the Transactions have been duly authorized and approved by the board of directors of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement and the Transactions.  When executed and delivered, this Agreement will be enforceable against the Company in accordance with its terms.  

Section 3.05

No Conflicts; Consents.  

(a)

The execution and delivery by the Company of this Agreement does not, and the consummation of the Transactions and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of the Company or any Company Subsidiary under, any provision of (i) the Company Constituent Instruments or the comparable charter or organizational documents of any Company Subsidiary, (ii) any material contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument (a “Contract”) to which the Company or any Company Subsidiary is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings and other matters re ferred to in Section 3.05(b), any material judgment, order or decree (“Judgment”) or material Law applicable to the Company or any Company Subsidiary or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

(b)

Except for required filings with the Securities and Exchange Commission (the “SEC”) and applicable “Blue Sky” or state securities commissions, no material consent, approval, license, permit, order or authorization (“Consent”) of, or registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtained or made by or with respect to the Company or any Company Subsidiary in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions.

Section 3.06

Taxes.  

(a)

Each of the Company and each Company Subsidiary has timely filed, or has caused to be timely filed on its behalf, all Tax Returns (as defined below) required to be filed by it, and all such Tax Returns are true, complete and accurate, except to the extent any failure to file or any inaccuracies in any filed Tax Returns, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.  All Taxes (as defined below) shown to be due on such Tax Returns, or otherwise owed, have been timely paid, except to the extent that any failure to pay, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

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(b)

The Company Financial Statements (as defined in Section 3.15) reflect an adequate reserve for all Taxes payable by the Company and the Company Subsidiaries (in addition to any reserve for deferred Taxes to reflect timing differences between book and Tax items) for all Taxable periods and portions thereof through the date of such financial statements.  No deficiency with respect to any Taxes has been proposed, asserted or assessed against the Company or any Company Subsidiary, and no requests for waivers of the time to assess any such Taxes are pending, except to the extent any such deficiency or request for waiver, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect.

(c)

For purposes of this Agreement:

“Taxes” includes all forms of taxation, whenever created or imposed, and whether of the United States or elsewhere, and whether imposed by a local, municipal, governmental, provincial, foreign, central or other Governmental Entity, or in connection with any agreement with respect to Taxes, including all interest, penalties and additions imposed with respect to such amounts.

“Tax Return” means all central, provincial, regional, local, municipal and foreign Tax returns, declarations, statements, reports, schedules, forms and information returns and any amended Tax return relating to Taxes.

Section 3.07

Benefit Plans.  

(a)

The Company does not have or maintain any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding) providing benefits to any current or former employee, officer or director of the Company or any Company Subsidiary (collectively, “Company Benefit Plans”).  As of the date of this Agreement there are not any severance or termination agreements or arrangements between the Company or any Company Subsidiary and any current or former employee, officer or director of the Company or any Company Subsidiary, nor does the Company or any Company Subsidiary have any general severance plan or policy.

(b)

Since March 31, 2008, there has not been any adoption or amendment in any material respect by the Company or any Company Subsidiary of any Company Benefit Plan.

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Section 3.08

Litigation.  There is no action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing against or affecting the Company, any subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (central, provincial, regional, local, municipal or foreign), stock market, stock exchange or trading facility (“Action”) which (a) adversely affects or challenges the legality, validity or enforceability of any of this Agreement or the Shares or (b) could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Company Material Adverse Effect.  Neither the Company nor any Company Subsidiary, nor any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a clai m or violation of or liability under central or provincial securities laws or a claim of breach of fiduciary duty.

Section 3.09

Compliance with Applicable Laws.  The Company and the Company Subsidiaries are in compliance with all applicable Laws, including those relating to occupational health and safety and the environment, except for instances of noncompliance that, individually and in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.  The Company has not received any written communication during the past two years from a Governmental Entity that alleges that the Company is not in compliance in any material respect with any applicable Law.  This Section 3.09 does not relate to matters with respect to Taxes, which are the subject of Section 3.06.

Section 3.10

Brokers; Schedule of Fees and Expenses.  Except as set forth in the Company Disclosure Letter, no broker, investment banker, financial advisor or other person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company.  

Section 3.11

Contracts.  Except as disclosed in the Company Disclosure Letter, there are no Contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of the Company and its subsidiaries taken as a whole.  Neither the Company nor any Company Subsidiary is in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect.

Section 3.12

Title to Properties.  Except as set forth in the Company Disclosure Letter, the Company and the Company Subsidiaries do not own any real property.  Each of the Company and the Company Subsidiaries has sufficient title to, or valid leasehold interests in, all of its properties and assets used in the conduct of its businesses.  All such assets and properties, other than assets and properties in which the Company or any of the Company Subsidiaries has leasehold interests, are free and clear of all Liens, except for Liens that, in the aggregate, do not and will not materially interfere with the ability of the Company and the Company Subsidiaries to conduct business as currently conducted.

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Section 3.13

Intellectual Property.  The Company and the Company Subsidiaries own, or are validly licensed or otherwise have the right to use, all patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights, copyrights and other proprietary intellectual property rights and computer programs (collectively, “Intellectual Property Rights”) which are material to the conduct of the business of the Company and the Company Subsidiaries taken as a whole.  The Company Disclosure Letter sets forth a description of all Intellectual Property Rights which are material to the conduct of the business of the Company and the Company Subsidiaries taken as a whole.  There are no claims pending or, to the knowledge of the Company, threatened that the Company or any of the Company Subsidiaries is infringing or otherwise adversely affecting the rights of any person with regard to any Intellectual Property Right .  To the knowledge of the Company, no person is infringing the rights of the Company or any of the Company Subsidiaries with respect to any Intellectual Property Right.

Section 3.14

Labor Matters.  There are no labor union agreements to which the Company or any of the Company Subsidiaries is a party or by which any of them is bound.  No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company.

Section 3.15

Financial Statements.  The Company has delivered to the Parent its audited consolidated financial statements for the fiscal years ended March 31, 2008 and 2007 (collectively, the “Company Financial Statements”).  The Company Financial Statements fairly present in all material respects the financial condition and operating results of the Company, as of the dates, and for the periods, indicated therein.  The Company does not have any material liabilities or obligations, contingent or otherwise, other than (a) liabilities incurred in the ordinary course of business subsequent to March 31, 2008, and (b) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in the Company Financial Statements, which, in both cases, individually and in the aggregate would not be reasonably expected to result in a Company Material Adverse Effect.

Section 3.16

Insurance.  Except as set forth in the Company Disclosure Letter, the Company and the Company Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Company Subsidiaries are engaged and in the geographic areas where they engage in such businesses.  Except as set forth in the Company Disclosure Letter, the Company has no reason to believe that it will not be able to renew its and the Company Subsidiaries’ existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business on terms consistent with market for the Company’s and such subsidiaries’ respective lines of business.

Section 3.17

Transactions With Affiliates and Employees.  Except as set forth in the Company Disclosure Letter and Company Financial Statements, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

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Section 3.18

Internal Accounting Controls.  The Company is establishing disclosure controls and procedures for the Company and designing such disclosure controls and procedures to ensure that material information relating to the Company, including the Company Subsidiaries, is made known to the officers by others within those entities.  Since March 31, 2008, there have been no significant changes in the Company’s internal controls or, to the Company’s knowledge, in other factors that could significantly affect the Company’s internal controls.

Section 3.19

Solvency.  Based on the financial condition of the Company as of the Closing Date (and assuming that the Closing shall have occurred), (a) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (b) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof, and (c) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay a ll amounts on or in respect of its debt when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).

Section 3.20

Application of Takeover Protections.  The Company has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company Constituent Instruments or the laws of its  jurisdiction of organization that is or could become applicable to the Shareholders as a result of the Shareholders and the Company fulfilling their obligations or exercising their rights under this Agreement, including, without limitation, the issuance of the Shares and the Shareholders’ ownership of the Shares.

Section 3.21

No Additional Agreements.  The Company does not have any agreement or understanding with the Shareholders with respect to the Transactions other than as specified in this Agreement.

Section 3.22

Investment Company.  The Company is not, and is not an affiliate of, and immediately following the Closing will not have become, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

Section 3.23

Disclosure.  The Company confirms that neither it nor any person acting on its behalf has provided any Shareholder or its respective agents or counsel with any information that the Company believes constitutes material, non-public information except insofar as the existence and terms of the proposed transactions hereunder may constitute such information and except for information that will be disclosed by the Parent under a current report on Form 8-K filed within four business days after the Closing.  The Company understands and confirms that the Shareholders will rely on the foregoing representations and covenants in effecting transactions in securities of the Company.  All disclosure provided to the Shareholders regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company (including the Company’s representations and warranties set forth in this Agreement) are true a nd correct and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

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Section 3.24

Absence of Certain Changes or Events.  Except as disclosed in the Company Financial Statements or in the Company Disclosure Letter, from March 31, 2008 to the date of this Agreement, the Company has conducted its business only in the ordinary course, and during such period there has not been:

(a)

any change in the assets, liabilities, financial condition or operating results of the Company or any Company Subsidiary, except changes in the ordinary course of business that have not caused, in the aggregate, a Company Material Adverse Effect;

(b)

any damage, destruction or loss, whether or not covered by insurance, that would have a Company Material Adverse Effect;

(c)

any waiver or compromise by the Company or any Company Subsidiary of a valuable right or of a material debt owed to it;

(d)

any satisfaction or discharge of any Lien, claim, or encumbrance or payment of any obligation by the Company or any Company Subsidiary, except in the ordinary course of business and the satisfaction or discharge of which would not have a Company Material Adverse Effect;

(e)

any material change to a material Contract by which the Company or any Company Subsidiary or any of its respective assets is bound or subject;

(f)

any mortgage, pledge, transfer of a security interest in, or Lien, created by the Company or any Company Subsidiary, with respect to any of its material properties or assets, except Liens for taxes not yet due or payable and Liens that arise in the ordinary course of business and do not materially impair the Company’s or such Company Subsidiary’s ownership or use of such property or assets;

(g)

any loans or guarantees made by the Company or any Company Subsidiary to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

(h)

any alteration of the Company’s method of accounting or the identity of its auditors;

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(i)

any declaration or payment of dividend or distribution of cash or other property to Shareholders or any purchase, redemption or agreements to purchase or redeem any shares of Company Stock;

(j)

any issuance of equity securities to any officer, director or affiliate, except pursuant to existing Company stock option plans; or

(k)

any arrangement or commitment by the Company or any Company Subsidiary to do any of the things described in this Section 3.24.

Section 3.25

Foreign Corrupt Practices Act. Neither the Company, nor any of its subsidiaries, nor, to the Company’s knowledge, any director, officer, agent, employee or other person acting on behalf of the Company or any Company Subsidiary has, in the course of its actions for, or on behalf of, the Company (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

Article IV.

Representations and Warranties of the Parent

The Parent represents and warrants as follows to each Shareholder and the Company that, except as set forth in the reports, schedules, forms, statements and other documents filed by the Parent with the SEC and publicly available prior to the date of this Agreement (the “Parent SEC Documents”):

Section 4.01

Organization, Standing and Power.  The Parent is duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on the Parent, a material adverse effect on the ability of the Parent to perform its obligations under this Agreement or on the ability of the Parent to consummate the Transactions (a “Parent Material Adverse Effect”).  The Parent is duly qualified to do business in each jurisdiction where the nature of its business or their owners hip or leasing of its properties make such qualification necessary and where the failure to so qualify would reasonably be expected to have a Parent Material Adverse Effect.  The Parent has delivered to the Company true and complete copies of the certificate or articles of incorporation of the Parent, as amended to the date of this Agreement (as so amended, the “Parent Charter”), and the Bylaws of the Parent, as amended to the date of this Agreement (as so amended, the “Parent Bylaws”).  

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Section 4.02

Subsidiaries; Equity Interests.  The Parent does not own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person.

Section 4.03

Capital Structure.  The authorized capital stock of the Parent consists of 120,000,000 shares of Parent Stock, and 5,000,000 shares of preferred stock, par value $0.001 per share.  As of the date of this Agreement (a) 2,872,866 shares of Parent Stock are issued and outstanding; (b) no shares of preferred stock are outstanding and (c) no shares of Parent Stock or preferred stock are held by the Parent in its treasury.  Except as set forth above, no shares of capital stock or other voting securities of the Parent are issued, reserved for issuance or outstanding.  All outstanding shares of the capital stock of the Parent are, and all such shares that may be issued prior to the date hereof will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the General Corporation Law of the State of Nevada, the Parent Charter, the Parent Bylaws or any Contract to which the Parent is a party or otherwise bound.  There are not any bonds, debentures, notes or other indebtedness of the Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Parent Stock may vote (“Voting Parent Debt”).  There are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Parent is a party or by which it is bound (a) obligating the Parent to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Parent or any Voting Parent Debt, (b) obligating the Parent to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Parent.  As of the date of this Agreement, there are not any outstanding contractual obligations of the Parent to repurchase, redeem or otherwise acquire any shares of capital stock of the Parent.   Except as set forth in that certain Stock Purchase Agreement dated October 18, 2007 by and between the Halter Financial Investments, L.P. and the Parent (the “HFI Purchase Agreement”), the Parent is not a party to any agreement granting any securityholder of the Parent the right to cause the Parent to register shares of the capital stock or other securities of the Par ent held by such securityholder under the Securities Act.  The shareholder list provided to the Company is a current shareholder list generated by its stock transfer agent, and such list accurately reflects all of the issued and outstanding shares of the Parent’s Common Stock.

Section 4.04

Authority; Execution and Delivery; Enforceability.  The execution and delivery by the Parent of this Agreement and the consummation by the Parent of the Transactions have been duly authorized and approved by the board of directors of the Parent and no other corporate proceedings on the part of the Parent are necessary to authorize this Agreement and the Transactions. This Agreement constitutes a legal, valid and binding obligation of the Parent, enforceable against the Parent in accordance with the terms hereof.

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Section 4.05

No Conflicts; Consents.  

(a)

The execution and delivery by the Parent of this Agreement, does not, and the consummation of Transactions and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any person under, or result in the creation of any Lien upon any of the properties or assets of the Parent under, any provision of (i) the Parent Charter or Parent Bylaws, (ii) any material Contract to which the Parent is a party or by which any of its properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 4.05(b), any material Judgment or material Law applicable to the Parent or its properties or assets, other than, in the case of clauses (ii) and (iii) above, any su ch items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect.

(b)

No Consent of, or registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtained or made by or with respect to the Parent in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions, other than filings under state “blue sky” laws, as may be required in connection with this Agreement and the Transactions.

Section 4.06

SEC Documents; Undisclosed Liabilities.  

(a)

The Parent has filed all reports, schedules, forms, statements and other documents required to be filed by the Parent with the SEC since January 27, 2001 (the “Parent SEC Documents”) pursuant to Sections 13(a), 14(a) and 15(d) of the Exchange Act.

(b)

As of its respective filing date, each Parent SEC Document complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to such Parent SEC Document, and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Except to the extent that information contained in any Parent SEC Document has been revised or superseded by a later Parent SEC Document, none of the Parent SEC Documents contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The consolidated financial statements of the Parent included in the Parent SEC Documents com ply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) (except, in the case of unaudited statements, as permitted by the rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial position of the Parent and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods shown (subject, in the case of unaudited statements, to normal year-end audit adjustments).

(c)

Except as set forth in the Parent SEC Documents, the Parent has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of the Parent or in the notes thereto.  Except for its agreement with Securities Transfer Corporation to act as the Parent’s stock transfer agent, the Parent has no financial or contractual obligations and liabilities (including any obligations to issue capital stock or other securities of the Parent) due after the date hereof.  All liabilities of the Parent shall have been paid off and shall in no event remain liabilities of the Parent, the Company or the Shareholders following the Closing.

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Section 4.07

Absence of Certain Changes or Events.  Except as disclosed in the Parent SEC Documents, from the date of the most recent audited financial statements included in the Parent SEC Documents to the date of this Agreement, the Parent has conducted its business only in the ordinary course, and during such period there has not been:

(a)

any change in the assets, liabilities, financial condition or operating results of the Parent from that reflected in the Parent SEC Documents, except changes in the ordinary course of business that have not caused, in the aggregate, a Parent Material Adverse Effect;

(b)

any damage, destruction or loss, whether or not covered by insurance, that would have a Parent Material Adverse Effect;

(c)

any waiver or compromise by the Parent of a valuable right or of a material debt owed to it;

(d)

any satisfaction or discharge of any Lien, claim, or encumbrance or payment of any obligation by the Parent, except in the ordinary course of business and the satisfaction or discharge of which would not have a Parent Material Adverse Effect;

(e)

any material change to a material Contract by which the Parent or any of its assets is bound or subject;

(f)

any material change in any compensation arrangement or agreement with any employee, officer, director or shareholder;

(g)

any resignation or termination of employment of any officer of the Parent;

(h)

any mortgage, pledge, transfer of a security interest in, or Lien, created by the Parent, with respect to any of its material properties or assets, except Liens for taxes not yet due or payable and Liens that arise in the ordinary course of business and do not materially impair the Parent’s ownership or use of such property or assets;

(i)

any loans or guarantees made by the Parent to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

(j)

any declaration, setting aside or payment or other distribution in respect of any of the Parent’s capital stock, or any direct or indirect redemption, purchase, or other acquisition of any of such stock by the Parent;

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(k)

any alteration of the Parent’s method of accounting or the identity of its auditors;

(l)

any issuance of equity securities to any officer, director or affiliate, except pursuant to existing Parent stock option plans; or

(m)

any arrangement or commitment by the Parent to do any of the things described in this Section 4.07.

Section 4.08

Taxes.  

(a)

The Parent has timely filed, or has caused to be timely filed on its behalf, all Tax Returns required to be filed by it, and all such Tax Returns are true, complete and accurate, except to the extent any failure to file or any inaccuracies in any filed Tax Returns, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect.  All Taxes shown to be due on such Tax Returns, or otherwise owed, has been timely paid, except to the extent that any failure to pay, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect.

(b)

The most recent financial statements contained in the Parent SEC Documents reflect an adequate reserve for all Taxes payable by the Parent (in addition to any reserve for deferred Taxes to reflect timing differences between book and Tax items) for all Taxable periods and portions thereof through the date of such financial statements.  No deficiency with respect to any Taxes has been proposed, asserted or assessed against the Parent, and no requests for waivers of the time to assess any such Taxes are pending, except to the extent any such deficiency or request for waiver, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect.

(c)

There are no Liens for Taxes (other than for current Taxes not yet due and payable) on the assets of the Parent.  The Parent is not bound by any agreement or Lien under which the Parent could become liable for a tax liability of any person other than the Parent.

Section 4.09

Absence of Changes in Benefit Plans.  From the date of the most recent audited financial statements included in the Parent SEC Documents to the date of this Agreement, there has not been any adoption or amendment in any material respect by the Parent of any collective bargaining agreement or any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding) providing benefits to any current or former employee, officer or director of the Parent (collectively, “Parent Benefit Plans”).  As of the date of this Agreement there are not any employment, consulting, indemnification, severance or termination agreements or arrangements between the Parent and any current or former employee, officer or director of the Parent, nor does the Parent have any general severance plan or policy.

Section 4.10

ERISA Compliance; Excess Parachute Payments.  The Parent does not, and since its inception never has, maintained, or contributed to any “employee pension benefit plans” (as defined in Section 3(2) of ERISA), “employee welfare benefit plans” (as defined in Section 3(1) of ERISA) or any other Parent Benefit Plan for the benefit of any current or former employees, consultants, officers or directors of the Parent.   

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Section 4.11

Litigation.  Except as disclosed in the Parent SEC Documents, there is no Action which (a) adversely affects or challenges the legality, validity or enforceability of any of this Agreement or the Shares or (b) could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Parent Material Adverse Effect.  Neither the Parent nor any subsidiary, nor any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim or violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.

Section 4.12

Compliance with Applicable Laws.  Except as disclosed in the Parent SEC Documents, the Parent is in compliance with all applicable Laws, including those relating to occupational health and safety, the environment, export controls, trade sanctions and embargos, except for instances of noncompliance that, individually and in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect.  Except as set forth in the Parent SEC Documents, the Parent has not received any written communication during the past two years from a Governmental Entity that alleges that the Parent is not in compliance in any material respect with any applicable Law.  The Parent is in compliance with all effective requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, that are applicable to it, except where such noncompliance could not have or reasonably be expected to result in a Parent Materia l Adverse Effect.  This Section 4.12 does not relate to matters with respect to Taxes, which are the subject of Section 4.08.

Section 4.13

Contracts.  Except as disclosed in the Parent Filed SEC Documents, there are no Contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of the Parent taken as a whole.  The Parent is not in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to result in a Parent Material Adverse Effect.

Section 4.14

Title to Properties.  The Parent has good title to, or valid leasehold interests in, all of its properties and assets used in the conduct of its businesses.  All such assets and properties, other than assets and properties in which the Parent has leasehold interests, are free and clear of all Liens, except for Liens that, in the aggregate, do not and will not materially interfere with the ability of the Parent to conduct business as currently conducted.  The Parent has complied in all material respects with the terms of all material leases to which it is a party and under which it is in occupancy, and all such leases are in full force and effect.  The Parent enjoys peaceful and undisturbed possession under all such material leases.

Section 4.15

Intellectual Property.  The Parent does not own or license any Intellectual Property Rights.  No claims are pending or, to the knowledge of the Parent, threatened that the Parent is infringing or otherwise adversely affecting the rights of any person with regard to any Intellectual Property Right.  

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Section 4.16

Labor Matters.  There are no collective bargaining or other labor union agreements to which the Parent is a party or by which it is bound.  No material labor dispute exists or, to the knowledge of the Parent, is imminent with respect to any of the employees of the Parent.

Section 4.17

Market Makers.  The Parent has at least three (3) market makers for its common shares and such market makers have obtained all permits and made all filings necessary in order for such market makers to continue as market makers of the Parent.  

Section 4.18

Transactions With Affiliates and Employees.  Except as set forth in the Parent SEC Documents, none of the officers or directors of the Parent and, to the knowledge of the Parent, none of the employees of the Parent is presently a party to any transaction with the Parent or any subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Parent, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

Section 4.19

Internal Accounting Controls.  The Parent has implemented and maintains a system of internal accounting controls sufficient to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorizations, (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (c) access to assets is permitted only in accordance with management’s general or specific authorization, and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  The Parent has established disclosure controls and procedures for the Parent and designed such disclosure controls and procedures to ensure that material information relating to the Parent is made known to the officers by others within those entities.  The Parent’s officers have evaluated the effectiveness of the Parent’s controls and procedures.  Since March 31, 2008, there have been no significant changes in the Parent’s internal controls or, to the Parent’s knowledge, in other factors that could significantly affect the Parent’s internal controls.

Section 4.20

Solvency.  Based on the financial condition of the Parent as of the Closing Date (and assuming that the Closing shall have occurred), (a) the Parent’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Parent’s existing debts and other liabilities (including known contingent liabilities) as they mature, (b) the Parent’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Parent, and projected capital requirements and capital availability thereof, and (c) the current cash flow of the Parent, together with the proceeds the Parent would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be su fficient to pay all amounts on or in respect of its debt when such amounts are required to be paid.  The Parent does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).

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Section 4.21

Application of Takeover Protections.  The Parent has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Parent’s charter documents or the laws of its state of incorporation that is or could become applicable to the Shareholders as a result of the Shareholders and the Parent fulfilling their obligations or exercising their rights under this Agreement, including, without limitation, the issuance of the Shares and the Shareholders’ ownership of the Shares.

Section 4.22

No Additional Agreements.  The Parent does not have any agreement or understanding with the Shareholders with respect to the transactions contemplated by this Agreement other than as specified in this Agreement.

Section 4.23

Investment Company.  The Parent is not, and is not an affiliate of, and immediately following the Closing will not have become, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

Section 4.24

Disclosure.  The Parent confirms that neither it nor any person acting on its behalf has provided any Shareholder or its respective agents or counsel with any information that the Parent believes constitutes material, non-public information except insofar as the existence and terms of the proposed transactions hereunder may constitute such information and except for information that will be disclosed by the Parent under a current report on Form 8-K filed within four business days after the Closing.  The Parent understands and confirms that the Shareholders will rely on the foregoing representations and covenants in effecting transactions in securities of the Parent.  All disclosure provided to the Shareholders regarding the Parent, its business and the transactions contemplated hereby, furnished by or on behalf of the Parent (including the Parent’s representations and warranties set forth in this Agreement) are true and correct and do not contain a ny untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

Section 4.25

Certain Registration Matters.  Except for registration rights granted to Halter Financial Investments, L.P. and the parties referenced in the HFI Purchase Agreement, the Parent has not granted or agreed to grant to any person any rights (including “piggy-back” registration rights) to have any securities of the Parent registered with the SEC or any other governmental authority that have not been satisfied.

Section 4.26

Listing and Maintenance Requirements.  The Parent is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with the listing and maintenance requirements for continued listing of the Parent Stock on the trading market on which the Parent Stock are currently listed or quoted.  The issuance and sale of the Shares under this Agreement does not contravene the rules and regulations of the trading market on which the Parent Stock are currently listed or quoted, and no approval of the shareholders of the Parent is required for the Parent to issue and deliver to the Shareholders the Shares contemplated by this Agreement.

Section 4.27

No Undisclosed Events, Liabilities, Developments or Circumstances.  No event, liability, development or circumstance has occurred or exists, or is contemplated to occur with respect to the Parent, its subsidiaries or their respective business, properties, prospects, operations or financial condition, that would be required to be disclosed by the Parent under applicable securities laws on a registration statement filed with the SEC relating to an issuance and sale by the Parent of the Parent Stock and which has not been publicly announced.

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Section 4.28

Foreign Corrupt Practices.  Neither the Parent, nor to the Parent’s knowledge, any director, officer, agent, employee or other person acting on behalf of the Parent or any of its subsidiaries has, in the course of its actions for, or on behalf of, the Parent (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (c) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

Article V.

Deliveries

Section 5.01

Deliveries of the Shareholders.  

(a)

Concurrently herewith each Shareholder is delivering to the Parent and to the Company this Agreement executed by the Shareholder.

(b)

At or prior to the Closing, each Shareholder shall deliver to the Parent:

(i)

certificate(s) representing its Company Stock; and

(ii)

a duly executed instrument of transfer for transfer by the Shareholder of its Company Stock to the Parent.

Section 5.02

Deliveries of the Parent.

(a)

Concurrently herewith, the Parent is delivering to the Company and to each Shareholder a copy of this Agreement executed by the Parent.

(b)

At or prior to the Closing, the Parent shall deliver to the Company:

(i)

a certificate from the Parent, signed by its Secretary or Assistant Secretary, certifying that the attached copies of the Parent Charter, Parent Bylaws and resolutions of the Board of Directors of the Parent approving this Agreement and the Transactions, are all true, complete and correct and remain in full force and effect;

(ii)

a certificate of good standing of the Parent dated within five (5) business days of Closing issued by the Secretary of State of Nevada;

(iii)

a letter of resignation of Richard Crimmins as a director of the Parent and from all offices he holds with the Parent effective upon the Closing;

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(iv)

evidence of the election of Jinglin Shi and Changjun Yu as directors of the Parent, Jinglin Shi as the Chief Executive Officer of the Parent, Colman Cheng as the Chief Financial Officer of the Parent, and such other executive officers designated by the Company, effective as of the Closing;

(v)

such pay-off letters and releases relating to liabilities of the Parent as the Company shall request, such pay-off letters and releases to be in form and substance satisfactory to the Company;

(vi)

the results of UCC, judgment lien and tax lien searches with respect to the Parent, the results of which indicate no liens on the assets of the Parent;

(vii)

a duly executed release by the current directors and officers of the Parent and Halter Financial Investments, L.P., in favor of the Parent, the Company and the Shareholders, in form and substance satisfactory to the Company; and

(c)

At or within 5 business days following the Closing, the Parent shall deliver to each Shareholder, a certificate or certificates representing the new shares of Parent Stock issued to such Shareholder as set forth opposite to his name on Annex A:

Section 5.03

Deliveries of the Company.  

(a)

Concurrently herewith, the Company is delivering to the Parent this Agreement executed by the Company.

(b)

At or prior to the Closing, the Company shall deliver to the Parent a certificate from the Company, signed by its authorized officer certifying that the attached copies of the Company Constituent Instruments and resolutions of the board of directors of the Company approving the Agreement and the Transactions are all true, complete and correct and remain in full force and effect.

Article VI.

Conditions to Closing

Section 6.01

Shareholders and Company Conditions Precedent.  The obligations of the Shareholders and the Company to enter into and complete the Closing is subject, at the option of the Shareholders and/or the Company, to the fulfillment on or prior to the Closing Date of the following conditions.

(a)

Representations and Covenants. The representations and warranties of the Parent contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date.  The Parent shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Parent on or prior to the Closing Date.  The Parent shall have delivered to the Shareholders and the Company, a certificate, dated the Closing Date, to the foregoing effect.

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(b)

Litigation.  No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the Transactions or to seek damages or a discovery order in connection with such Transactions, or which has or may have, in the reasonable opinion of the Company or any Shareholders, a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Parent or the Company.

(c)

No Material Adverse Change.  There shall not have been any occurrence, event, incident, action, failure to act, or transaction since March 31, 2008 which has had or is reasonably likely to cause a Parent Material Adverse Effect.

(d)

Post-Closing Capitalization.  At and immediately after the Closing, the authorized capitalization, and the number of issued and outstanding shares of the capital stock of  the Parent, on a fully-diluted basis, as indicated on a schedule to be delivered by the Parties at or prior to the Closing, shall be acceptable to the Company and the Shareholders in their sole and absolute discretion.

(e)

SEC Reports.  The Parent shall have filed all reports and other documents required to be filed by the Parent under the U.S. federal securities laws through the Closing Date.

(f)

OTCBB Quotation.  The Parent shall have maintained its status as a Company whose common stock is quoted on the Over-the-Counter Bulletin Board and no reason shall exist as to why such status shall not continue immediately following the Closing.

(g)

No Suspensions of Trading in Parent Stock; Listing.  Trading in the Parent Stock shall not have been suspended by the SEC or any trading market (except for any suspensions of trading of not more than one trading day solely to permit dissemination of material information regarding the Parent) at any time since the date of execution of this Agreement, and the Parent Stock shall have been at all times since such date listed for trading on a trading market.

(h)

Satisfactory Completion of Due Diligence.  The Company and the Shareholders shall have completed their legal, accounting and business due diligence of the Parent and the results thereof shall be satisfactory to the Company and the Shareholders in their sole and absolute discretion.

(i)

Deliveries.  The deliveries specified in Section 5.02 shall have been made by the Parent.  

Section 6.02

Parent Conditions Precedent.  The obligations of the Parent to enter into and complete the Closing is subject, at the option of the Parent, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by the Parent in writing.

(a)

Representations and Covenants. The representations and warranties of the Shareholders and the Company contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date.  The Shareholders and the Company shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Shareholders and the Company on or prior to the Closing Date.  The Company shall have delivered to the Parent, if requested, a certificate, dated the Closing Date, to the foregoing effect.

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(b)

Litigation.  No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the Transactions or to seek damages or a discovery order in connection with such Transactions, or which has or may have, in the reasonable opinion of the Parent, a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Company.

(c)

No Material Adverse Change.  There shall not have been any occurrence, event, incident, action, failure to act, or transaction since March 31, 2008 which has had or is reasonably likely to cause a Company Material Adverse Effect.

(d)

Post-Closing Capitalization.  At, and immediately after, the Closing, the authorized capitalization, and the number of issued and outstanding shares of the capital stock of the Parent, on a fully-diluted basis, as indicated on a schedule to be delivered by the Parties at or prior to the Closing, shall be acceptable to the Parent in its sole and absolute discretion.

(e)

Satisfactory Completion of Due Diligence.  The Parent shall have completed its legal, accounting and business due diligence of the Company and the Shareholders and the results thereof shall be satisfactory to the Parent in its sole and absolute discretion.

(f)

Deliveries.  The deliveries specified in Section 5.01 and Section 5.03 shall have been made by the Shareholders and the Company, respectively.  

(g)

Delivery of Audit  Report and  Financial  Statements.  The Company shall have completed the Company Financial Statements and shall have received an audit report from an independent audit firm that is registered with the Public Company Accounting Oversight Board relating to the fiscal years ended March 31, 2008 and 2007.  The form and substance of the Company Financial Statements shall be satisfactory to the Parent in its sole and absolute discretion.

(h)

Audited Financial Statements and Form 10 Disclosure.  The Company shall have provided the Parent and the Shareholders with reasonable assurances that the Parent will be able to comply with its obligation to file a current report on Form 8-K within four (4) business days following the Closing containing the requisite audited consolidated financial statements of the Company and the requisite Form 10-type disclosure regarding the Company.  

(i)

Delivery of BVI Legal Opinion.  The Company shall have received an opinion from its legal counsel in the British Virgin Islands that confirms the legality under the laws of the British Virgin Islands of the restructuring being effected by the Company in connection with the Transactions and the enforceability of this Agreement and that is otherwise satisfactory to the Company, the Shareholders and the Parent.

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(j)

Delivery of PRC Legal Opinion.  The Company shall have received an opinion from its legal counsel in the People’s Republic of China that confirms the legality under Chinese law of the restructuring being effected by the Company in connection with the Transactions and that is otherwise satisfactory to the Company, the Shareholders and the Parent.

Article VII.

Covenants

Section 7.01

Blue Sky Laws. The Parent shall take any action (other than qualifying to do business in any jurisdiction in which it is not now so qualified) required to be taken under any applicable state securities laws in connection with the issuance of Shares in connection with this Agreement

Section 7.02

Public Announcements.  The Parent and the Company will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to this Agreement and the Transactions and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange.

Section 7.03

Fees and Expenses.  All fees and expenses incurred in connection with this Agreement shall be paid by the Party incurring such fees or expenses, whether or not this Agreement is consummated.  

Section 7.04

Continued Efforts.  Each Party shall use commercially reasonable efforts to (a) take all action reasonably necessary to consummate the Transactions, and (b) take such steps and do such acts as may be necessary to keep all of its representations and warranties true and correct as of the Closing Date with the same effect as if the same had been made, and this Agreement had been dated, as of the Closing Date.

Section 7.05

Exclusivity.  The Parent shall not (a) solicit, initiate, or encourage the submission of any proposal or offer from any person relating to the acquisition of any capital stock or other voting securities of the Parent, or any assets of the Parent (including any acquisition structured as a merger, consolidation, share exchange or other business combination), (b) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any person to do or seek any of the foregoing, or (c) take any other action that is inconsistent with the Transactions and that has the effect of avoiding the Closing contemplated hereby.  The Parent shall notify the Company immediately if any person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.

Section 7.06

Filing of 8-K and Press Release.  The Parent shall file, within four (4) business days of the Closing Date, a current report on Form 8-K and attach as exhibits all relevant agreements with the SEC disclosing the terms of this Agreement and other requisite disclosure regarding the Transactions and including the requisite audited consolidated financial statements of the Company and the requisite Form 10 disclosure regarding the Company.  In addition, the Parent shall issue a press release at a mutually agreeable time following the Closing Date.

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Section 7.07

Furnishing of Information.  As long as any Shareholder owns the Shares, the Parent covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Parent after the date hereof pursuant to the Exchange Act.  As long as any Shareholder owns Shares, if the Parent is not required to file reports pursuant to such laws, it will prepare and furnish to the Shareholders and make publicly available in accordance with Rule 144(c), such information as is required for the Shareholder to sell the Shares under Rule 144.  The Parent further covenants that it will take such further action as any holder of Shares may reasonably request, all to the extent required from time to time to enable such person to sell the Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144.

Section 7.08

Access.  Each Party shall permit representatives of each other Party to have full access to all premises, properties, personnel, books, records (including Tax records), contracts, and documents of or pertaining to such Party.

Section 7.09

Preservation of Business.  From the date of this Agreement until the Closing Date, each of the Company and the Parent shall operate only in the ordinary and usual course of business consistent with past practice (provided, however, that Parent shall not issue any securities without the prior written consent of the Company), and shall use reasonable commercial efforts to (a) preserve intact its respective business organization, (b) preserve the good will and advantageous relationships with customers, suppliers, independent contractors, employees and other Persons material to the operation of its respective business, and (c) not permit any action or omission which would cause any of its respective representations or warranties contained herein to become inaccurate or any of its respective covenants to be breached in any material respect.

Article VIII.

Miscellaneous

Section 8.01

Notices.  All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):

If to the Parent, to:

Halter Financial Investments, L.P.

12890 Hill Top Road

Argyle, TX 76226

If to the Company, to:

Daqing LongHeDa Food Co., Ltd.

No. 2 Wenhua Street

Dongfeng New Village

Daqing, Heilongjiang 163311, China

Attention: Jinlin Shi

Facsimile: 86-459-4607499

24

with a copy to:

Thelen Reid Brown Raysman & Steiner LLP

701 Eighth Street, N.W.

Washington, D.C.  20001

Attention:  Louis A. Bevilacqua, Esq.

Facsimile: (202) 654-1804

If to Shareholders at the addresses set forth in Annex A hereto.  

Section 8.02

Amendments; Waivers; No Additional Consideration.  No provision of this Agreement may be waived or amended except in a written instrument signed by the Company, the Parent and all Shareholders.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either Party to exercise any right hereunder in any manner impair the exercise of any such right.  No consideration shall be offered or paid to any Shareholder to amend or consent to a waiver or modification of any provision of any transaction document unless the same consideration is also offered to all Shareholders who then hold Shares.

Section 8.03

Replacement of Securities.  If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Parent shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Parent of such loss, theft or destruction and customary and reasonable indemnity, if requested.  The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares.  If a replacement certificate or instrument evidencing any Shares is requested due to a mutilation thereof, the Parent may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

Section 8.04

Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Shareholders, the Parent and the Company will be entitled to specific performance under this Agreement.  The Parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

Section 8.05

Independent Nature of Shareholders’ Obligations and Rights.  The obligations of each Shareholder under this Agreement are several and not joint with the obligations of any other Shareholder, and no Shareholder shall be responsible in any way for the performance of the obligations of any other Shareholder under this Agreement.  The decision of each Shareholder to acquire Shares pursuant to this Agreement has been made by such Shareholder independently of any other Shareholder.  Nothing contained herein, and no action taken by any Shareholder pursuant hereto, shall be deemed to constitute the Shareholders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Shareholders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.  Each Shareholder acknowledges that no other Shareholder has acted as agent for such Shareholder in connection with making its investment hereunder and that no Shareholder will be acting as agent of such Shareholder in connection with monitoring its investment in the Shares or enforcing its rights under this Agreement.  Each Shareholder shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Shareholder to be joined as an additional party in any proceeding for such purpose.  Each of the Company and the Parent acknowledge that each of the Shareholders has been provided with this same Agreement for the purpose of closing a transaction with multiple Shareholders and not because it was required or requested to do so by any Shareholder.

25

Section 8.06

Limitation of Liability.  Notwithstanding anything herein to the contrary, each of the Parent and the Company acknowledge and agree that the liability of a Shareholder arising directly or indirectly, under any transaction document of any and every nature whatsoever shall be satisfied solely out of the assets of such Shareholder, and that no trustee, officer, other investment vehicle or any other affiliate of such Shareholder or any investor, shareholder or holder of shares of beneficial interest of such Shareholder shall be personally liable for any liabilities of such Shareholder.

Section 8.07

Interpretation.  When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.  

Section 8.08

Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions contemplated hereby is not affected in any manner materially adverse to any Party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that Transactions contemplated hereby are fulfilled to the extent possible.

Section 8.09

Counterparts; Facsimile Execution.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.  Facsimile execution and delivery of this Agreement is legal, valid and binding for all purposes.

26

Section 8.10

Entire Agreement; Third Party Beneficiaries. This Agreement, taken together with the Company Disclosure Letter, (a) constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the Transactions and (b) are not intended to confer upon any person other than the Parties any rights or remedies.

Section 8.11

Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof, except to the extent the laws of Nevada are mandatorily applicable to the Transactions.

Section 8.12

Assignment.  Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Parties.  Any purported assignment without such consent shall be void.  Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.

[Signature Page Follows]

27

The Parties hereto have executed and delivered this Share Exchange Agreement as of the date first above written.

FASHION TECH INTERNATIONAL, INC.

By: /s/ Richard Crimmins                                        

Name: Richard Crimmins

Title: President

FEZDALE INVESTMENTS LIMITED

By: /s/ Kung Yiu Fai                                                

Name: KUNG Yiu Fai

Title: Director

SHAREHOLDERS:

KUNG Yiu Fai

/s/ Kung Yiu Fai                                               

NG Kwan Mo

/s/ Ng Kwan Mo                                                

[Signature Page to Share Exchange Agreement]

ANNEX A

Shareholders of Dollar Come Investments  Limited

Name and Address of Shareholder	Tax ID (if applicable)	Number of Shares of Company Stock Being Exchanged	Percentage of Total Company Shares Represented By Shares Being Exchanged	Number of Shares of Parent Stock to be Received by Shareholder
KUNG Yiu Fai Flat 7, 16/F, Block 45 Heng Fa Chuen, Chai Wan Hong Kong	N/A	700	70%	21,116,815
NG Kwan Mo Flat B, 19/F, Wan Wah mansion, 1-3 King Wah Road, North Point Hong Kong	N/A	300	30%	9,050,063
Totals:		1,000	100%	30,166,878

EX-4.1

Exhibit 4.1

LOCK-UP AGREEMENT

THIS LOCK-UP AGREEMENT (the "Agreement") is made and entered into on August 14, 2008 between the stockholders set forth on the signature page to this Agreement (each, a "Holder") and Fashion Tech International, Inc., a Nevada corporation (the "Company").

RECITALS

A.

The Company has determined that it is advisable and in its best interest to enter into that certain Securities Purchase Agreement, dated August 14, 2008 (the "Purchase Agreement") with the Investors named therein (the "Investors") and certain other parties named therein, pursuant to which the Company will issue and sell in a private offering securities of the Company (the "Offering"). Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement will have the meanings given such terms in the Purchase Agreement.

B.

In connection with the Offering, the Company has agreed to provide the Investors certain registration rights, and in furtherance thereof has agreed to file a registration statement to enable the Investors to resell certain of the securities subject of the Offering.

C.

It is a condition to the Investors' respective obligations to close under the Purchase Agreement and provide the financing contemplating by the Offering that the Holder execute and deliver to the Company this Agreement.

D.

In contemplation of, and as a material inducement for the Investors to enter into, the Purchase Agreement, the Holder and the Company have each agreed to execute and deliver this Agreement.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:

1.

Effectiveness of Agreement. This Agreement shall become null and void if the Purchase Agreement is terminated prior to its Closing as to all Investors.

2.

Representations and Warranties. Each of the parties hereto, by their respective execution and delivery of this Agreement, hereby represents and warrants to the others and to all third party beneficiaries of this Agreement that (a) such party has the full right, capacity and authority to enter into, deliver and perform its respective obligations under this Agreement, (b) this Agreement has been duly executed and delivered by such party and is the binding and enforceable obligation of such party, enforceable against such party in accordance with the terms of this Agreement and (c) the execution, delivery and performance of such party's obligations under this Agreement will not conflict with or breach the terms of any other agreement, contract, commitment or understanding to which such party is a party or to which the assets or securities of such party are bound.

Each Holder has independently evaluated the merits of its decision to enter into and deliver this Agreement, and such Holder confirms that it has not relied on the advice of the Company or any other person.

3.

Beneficial Ownership. Holder hereby represents and warrants that it does not beneficially own (as determined in accordance with Section 13(d) of the Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder) any shares of Common Stock, or any economic interest therein or derivative therefrom, other than those shares of Common Stock specified on its signature page to this Agreement. For purposes of this Agreement the shares of Common Stock beneficially owned by such Holder as specified on its signature page to this Agreement are collectively referred to as the "Holder's Shares."

4.

Lockup. From and after the date of this Agreement and through and including the one year anniversary of the effective date of a registration statement resulting in all Shares being registered for resale by the Investors (the "Lockup Period"), the Holder irrevocably agrees that, except as set forth below, it will not offer, pledge, encumber, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, or announce the offering of, any of its Holder's Shares (including any securities convertible into, or exchangeable for, or representing the rights to receive, Holder's Shares) or engage in any Short Sales with respect to any security of the Company. In furtherance thereof, the Company will (x) place a stop order with the Transfer Agent on all Holder's Shares, including those which are covered by a registration statement, (y) notify its transfer agent in writing of the stop order and the restrictions on such Holder's Shares under this Agreement and direct the transfer agent not to process any attempts by the Holder to resell or transfer any Holder's Shares except in compliance with this Agreement. Notwithstanding the foregoing, each Holder may transfer any Holder's Shares by (a) bona fide gift or (b) will or intestate succession to his or her immediate family or to a trust the sole beneficiaries of which are one or more of the undersigned and his or her immediate family (the term "immediate family" meaning for these purposes the spouse, domestic partner, lineal descendant, father, mother or sibling of the undersigned), provided that each resulting transferee of such Holder's Shares executes and delivers to the Company an agreement satisfactory to the Company certifying that such transferee is bound by the terms of this Agreement and has been in compliance with the terms hereof since the date first above written as if it had been an original party hereto. Further, Holder shall be permitted to pledge, encumber, or create a security interest in any or all of its Holder's Shares to secure the payment or performance of indebtedness and other obligations of the Company and/or its Subsidiaries to bona fide commercial lending institutions in the People's Republic of China. For purposes hereof, "Short Sales" include, without limitation, all "short sales" as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers.

5.

Third-Party Beneficiaries. The Holder and the Company acknowledge and agree that this Agreement is entered into for the benefit of and is enforceable by the Investors and their successors and assigns. The Holder and the Company understand and agree that this Agreement is a material inducement to the willingness of the Investors to enter into the Purchase agreement and the transactions contemplated thereunder, that each of the Company and the Holder receive benefits as a result of the investment into the Company by the Investors.

6.

No Additional Fees/Payment. Other than the consideration specifically referenced herein, the parties hereto agree that no fee, payment or additional consideration in any form has been or will be paid to the Holder in connection with this Agreement.

7.

Enumeration and Headings. The enumeration and headings contained in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions of this Agreement.

8.

Counterparts. This Agreement may be executed in facsimile and in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all of which shall together constitute one and the same agreement.

9.

Successors and Assigns. This Agreement and the terms, covenants, provisions and conditions hereof shall be binding upon, and shall inure to the benefit of, the respective heirs, successors and assigns of the parties hereto.

10.

Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, such provision will be conformed to prevailing law rather than voided, if possible, in order to achieve the intent of the parties and, in any event, the remaining provisions of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto.

11.

Amendment. This Agreement may not be amended or modified in any manner except by a written agreement executed by each of the parties hereto if and only if such modification or amendment is consented to in writing by the Investors holding a majority in interest of the Common Stock issued or issuable under the Purchase Agreement.

12.

Further Assurances. The Company and the Holder shall each do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any Investor or the Transfer Agent or, in the case of the Holder, the Company may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

13.

No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

14.

Remedies. The Company and the Investors shall have the right to specifically enforce all of the obligations of the Holder under this Agreement (without posting a bond or other security), in addition to recovering damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, each Holder recognizes that if it fails to perform, observe, or discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Company or the Investors. Therefore, the Holder agrees that each of the Company and the Investors shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or other security.

15.

Governing Law. The terms and provisions of this Agreement shall be construed in accordance with the laws of the State of New York and the federal laws of the United States of America applicable therein. Each party agrees for its benefit and the benefit of the Investors (who are third party beneficiaries to the obligations of the Company and the Holder contained in this Agreement and this Section) as follows: (a) All Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement shall be commenced exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. (b) Each of the Company and the Holder hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. (c) Each of the Company and the Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. (d) If any party or any Investor shall commence a Proceeding to enforce any provisions of this Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party (and in the case of an Investor bringing such a Proceeding, the Company and the Holder shall jointly and severally reimburse the Investor) for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement as of the day and year first above written.

Name:

Number of shares of Common Stock beneficially owned:

FASHION TECH INTERNATIONAL, INC.

By:

Name: Jinlin Shi

Title: Chief Executive Officer

[Signature Page to Lockup Agreement]

EX-10.1

 

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of  August 14, 2008 among Fashion Tech International, Inc., a Nevada corporation (collectively with all predecessors thereof, the “Company”), Fezdale Investments Limited, a British Virgin Island Company (together with its direct and indirect subsidiaries “BVI”), Daqing Longheda Food Company Limited, a wholly foreign-owned enterprise organized under the laws of the People’s Republic of China (“WFOE”), and the investors listed on the Schedule of Buyers attached hereto as Annex A and identified on the signature pages hereto (each, an “Investor” and collectively, the “Investors”).

WHEREAS, on August 14, 2008, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”), with BVI and the BVI Shareholders (as defined in Section 1.1 below), pursuant to which the Company acquired all of the equity interest of BVI and, indirectly, all of BVI’s direct and indirect subsidiaries, in exchange for 91.3% of the total outstanding shares of the Common Stock (as defined in Section 1.1 below) on a fully diluted basis as and immediately after the closing of the exchange under the Exchange Agreement (the “Exchange”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to the Securities Act (as defined below), the Company desires to issue and sell to each Investor, and each Investor, severally and not jointly, desires to purchase from the Company certain securities of the Company, as more fully described in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows:

ARTICLE 1.
DEFINITIONS

1.1.

Definitions.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:

“2009 Annual Report” means the Annual Report of the Company for the fiscal year ending March 31, 2009, as filed with the Commission on Form 10-K (or such other form appropriate for such purpose as promulgated by the Commission).

“2009 Guaranteed ATNI” has the meaning set forth in Section 4.7.

“2009 Make Good Shares” has the meaning set forth in Section 4.7.

“2010 Annual Report” means the Annual Report of the Company for the fiscal year ending March 31, 2010, as filed with the Commission on Form 10-K (or such other form appropriate for such purpose as promulgated by the Commission).

“2010 Guaranteed ATNI” has the meaning set forth in Section 4.7.

“2010 Make Good Shares” has the meaning set forth in Section 4.7.

“Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, county or local), stock market, stock exchange or trading facility.

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person.

“After Tax Net Income” shall have the meaning set forth in Section 4.7.

“Business Day” means any day except Saturday, Sunday and any day which is a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“BVI” has the meaning set forth in the recitals to this Agreement.

“BVI Shareholders” means KUNG Yiu Fai and NG Kwan Mo.

“Closing” means the closing of the purchase and sale of the Shares pursuant to Article 2.

“Closing Date” means the Business Day on which all of the conditions set forth in Sections 5.1 and 5.2 hereof are satisfied, or such other date as the parties may agree.

“Closing Escrow Agreement” means that certain Escrow Agreement, dated as of the date hereof, among the Investors, Thelen Reid Brown Raysman & Steiner LLP, as escrow agent, WLT Brothers Capital, Inc., as investor agent (the “Investor Agent”) and the Company, in the form of Exhibit A hereto.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.001 per share, and any securities into which such common stock may hereafter be reclassified.

“Company Deliverables” has the meaning set forth in Section 2.2(a).

“Company Entities” means the Company, BVI, WFOE and all existing Subsidiaries of any such entities and any other entities which hereafter become Subsidiaries of any such entities.

“Disclosure Materials” means the Schedules to this Agreement.

     "Effectiveness Period" means, as to any registration statement required to be filed pursuant to Section 4.2 of this Agreement, the period commencing on the date when such registration statement is declared effective by the Commission and ending on the earliest to occur of (a) the second anniversary of such effective date, (b) such time as all of the Registrable Securities covered by such registration statement have been publicly sold by the Investors included therein, or (c) such time as all of the Registrable Securities covered by such registration statement may be sold by the Investors without volume restrictions pursuant to Rule 144 as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Investors.

“Escrow Agent” means Thelen Reid Brown Raysman & Steiner LLP.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Existing Company Entities” means the Company, BVI, WFOE and their respective Subsidiaries and "Existing Company Entity" means any of the Company, BVI, WFOE and any of their respective Subsidiaries.

“GAAP” means U.S. generally accepted accounting principles.

“Governmental Body” shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; or (c) governmental or quasi-governmental authority of any nature (including any governmental or administrative division, department, agency, commission, instrumentality, official, organization, unit, body or entity) and any court or other tribunal.

“Holdback Escrow Agreement” means the Holdback Escrow Agreement, dated as of the date hereof, by and among the Company, the Investor Agent and Securities Transfer Corporation, as escrow agent, in the form of Exhibit B hereto.

“Intellectual Property Rights” has the meaning set forth in Section 3.1(o).

“Investment Amount” means, with respect to each Investor, the Investment Amount indicated on such Investor’s signature page to this Agreement.

“Investor Deliverables” has the meaning set forth in Section 2.2(b).

"Legal Requirement" shall mean any federal state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (or under the authority of any national securities exchange upon which the Common Stock is then listed or traded).  Reference to any Legal Requirement means such Legal Requirement as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, and reference to any section or other provision of any Legal Requirement means that provision of such Legal Requirement from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision.

“Lien” means any lien, charge, encumbrance, security interest, or other charge of any kind.

“Lockup Agreement” means the Lockup Agreement, dated as of the date hereof, by and between the Company and each person listed as a signatory thereto, in the form attached as Exhibit C hereto.

“Make Good Escrow Agreement” means the Make Good Escrow Agreement, dated as of the date hereof, among the Company, the Investor Agent, the escrow agent identified therein (the “Make Good Escrow Agent”) and the Make Good Pledgor, in the form of Exhibit D hereto, as may be amended from time to time pursuant to this Agreement.

“Make Good Pledgor” means KUNG Yiu Fai.

“Material Adverse Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, prospects, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, except for results or consequences attributable to the effects of, or changes in, general economic or capital markets conditions or effects and changes that generally affect the industries in which the Company Entities operate, such as regulatory action by the PRC or municipal governments or (iii) an adverse impairment to the Company’s ability to perform on a timely basis its obligations under any Transaction Document.

“New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan.

“Outside Date” means the forty-fifth (45th) calendar day (if such calendar day is a Trading Day and if not, then the first Trading Day following such forty-fifth (45th) calendar day) following the date of this Agreement.

“PRC” means, for the purpose of this Agreement, the People’s Republic of China, not including Taiwan, Hong Kong and Macau.

“Per Share Purchase Price” equals $2.78.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Placement Agents” means collectively, Roth Capital Partners, LLC and WLT Brothers Capital, Inc.

“Proceeding” means an action, claim, suit, investigation or proceeding (including an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Registrable Securities” means the Shares, 2009 Make Good Shares and 2010 Make Good Shares.

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Securities” means the Shares, 2009 Make Good Shares and 2010 Make Good Shares.

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” means the shares of Common Stock issued, issuable or transferable to the Investors pursuant to this Agreement.

“Short Sales” include all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers.

“Subsidiary” means any “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X promulgated by the Commission under the Exchange Act.

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i) and (ii) hereof, then Trading Day shall mean a Business Day.

“Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

“Transaction Documents” means this Agreement, the Closing Escrow Agreement, the Make Good Escrow Agreement, the Holdback Escrow Agreement, the Lockup Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

“Transfer Agent” means Securities Transfer Corporation, and any successor transfer agent of the Company.

“WFOE” has the meaning set forth in the recitals to this Agreement.

ARTICLE 2.
PURCHASE AND SALE

2.1.

Closing.  Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to each Investor, and each Investor shall, severally and not jointly, purchase from the Company, the Shares representing such Investor’s Investment Amount.  The Closing shall take place at the offices of Winston & Strawn LLP, counsel to Roth Capital Partners, LLC, 200 Park Avenue, New York, NY 10166 on the Closing Date or at such other location or time as the parties may agree.

2.2.

Closing Deliveries.

(a)

At the Closing, the Company shall deliver or cause to be delivered to each Investor the following (the “Company Deliverables”):

(i)

Irrevocable instruction letter, in agreed form, to the Transfer Agent directing the Transfer Agent to issue a certificate evidencing a number of Shares equal to such Investor’s Investment Amount divided by the Per Share Purchase Price, registered in the name of such Investor or its nominee; and

(ii)

an officer’s certificate, in agreed form, certifying the satisfaction of each of the conditions precedent to the Investors’ obligation to purchase Shares;

(iii)

the Closing Escrow Agreement, duly executed by the Company and the Escrow Agent;

(iv)

the Make Good Escrow Agreement, duly executed by all parties thereto (other than the Investors);

(v)

the Holdback Escrow Agreement, duly executed by all parties thereto (other than the Investors); and

(vi)

Lockup Agreements, duly executed by the Company and each officer of the Company and each member of the Board of Directors of the Company.

(b)

At or prior to the Closing, each Investor shall deliver or cause to be delivered to the Escrow Agent its Investment Amount, in immediately available funds, by wire transfer to the account designated in the Closing Escrow Agreement (the “Investor Deliverables”).

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES

3.1.

Representations and Warranties of the Company.  

Subject to exceptions set forth in the disclosure schedule of the Existing Company Entities, the Company, BVI and WFOE hereby jointly and severally make the following representations and warranties to each Investor:

(a)

Subsidiaries.  The Existing Company Entities have no direct or indirect Subsidiaries other than as disclosed in Schedule 3.1(a).  Except as disclosed in Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital stock of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights.

(b)

Organization and Qualification.  Each of the Existing Company Entities is duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  No Existing Company Entity is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each Existing Company Entity is duly qualified to conduct its respective businesses and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not, individually or in the aggregate, ha ve or reasonably be expected to result in a Material Adverse Effect.

(c)

Authorization; Enforcement.  Each Existing Company Entity which is or is to become party to any Transaction Document has the requisite corporate and other power and authority to enter into and to consummate the transactions contemplated by each such Transaction Document to which it is a party and otherwise to carry out its obligations thereunder.  The execution and delivery of the Transaction Documents, by each of the Existing Company Entities to be party thereto and the consummation by each of them of the transactions contemplated thereby have been duly authorized by all necessary action on the part of such Existing Company Entity, and no further action is required by any of them in connection with such authorization.  Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and each other Existing Company Entity required to execute the same (to the extent any of them is a party thereto) and, when delivered in a ccordance with the terms hereof, will constitute the valid and binding obligation of the Company and such Existing Company Entity, enforceable against the Company and the Existing Company Entity, as the case may be, each in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar Legal Requirement relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

(d)

No Conflicts.  Except as set forth on Schedule 3.1(d), the execution, delivery and performance of the Transaction Documents by the Company, and each other Existing Company Entity (to the extent a party thereto) and the consummation by the Company and such other Existing Company Entities of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s, or such Existing Company Entity's certificate of incorporation or bylaws, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing any of the debt of any Existing Company Entity's debt or otherwise) or other understanding to which any of the Existing Company Entities is a party o r by which any property or asset of any of the Existing Company Entities is bound or affected, or (iii) result in a violation of any Legal Requirement, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of any Existing Company Entity is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

(e)

Filings, Consents and Approvals.  None of the Existing Company Entities is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any Governmental Body in connection with the execution, delivery and performance by the Company and each of the other Existing Company Entities to the extent it is a party thereto of the Transaction Documents, other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of this agreement, (ii) filings required by state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) the filings required in accordance with Section 4.5 and (v) those that have been made or obtained prior to the date of this Agreement.

(f)

Issuance of the Shares.  The Shares have been duly authorized and are, with respect to the Shares to be delivered to the Investors on the Closing Date, when issued and paid for in accordance with the Transaction Documents, will be, duly and validly issued, fully paid and nonassessable, free and clear of all Liens.  The Company has reserved from its duly authorized capital stock the shares of Common Stock issuable pursuant to this Agreement in order to issue the Shares.  The Make Good Pledgor is the record owner of the 2009 Make Good Shares and 2010 Make Good Shares.

(g)

Capitalization.  The number of shares and type of all authorized, issued and outstanding capital stock of the Company, and all shares of Common Stock reserved for issuance under the Company’s various option and incentive plans, is specified on Schedule 3.1(g).  Except as specified on Schedule 3.1(g), no securities of the Company are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as specified on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock.  The sale of Shares to the Investors will not, immediately or with the passage of time, obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investors) or result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities.

(h)

Financial Statements.  The Company has filed all reports required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such shorter period as the Company was required by law to file such reports) (the foregoing materials being collectively referred to herein as the “SEC Reports” and, together with the Schedules to this Agreement (if any), the “Disclosure Materials”) on a timely basis or has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue sta tement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The financial statements of the Company and each Subsidiary included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjus tments.

(i)

 Material Changes.  Since the date of the latest audited financial statements of the Company, except as disclosed on Schedule 3.1(i), (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Existing Company Entities have not incurred any liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP, (iii) the Existing Company Entities have not altered its method of accounting or the identity of its auditors, and (iv) the Existing Company Entities have not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock.

(j)

Litigation.  There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares or (ii) except as disclosed on Schedule 3.1(j), could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Existing Company Entities, nor to the knowledge of the Existing Company Entities, any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty, except as disclosed on Schedule 3.1(j).  There has not been, and to the knowledge of the Company, there is not pending any investigation by the Commission involving any Existing Company Entity or any current or former director or officer of an Existing Company Entity (in his or her capacity as such).

(k)

Labor Relations.  No material labor dispute exists or, to the knowledge of the Existing Company Entities, is imminent with respect to any of the employees of the Existing Company Entities.

(l)

Compliance.  None of the Existing Company Entities (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by an Existing Company Entity under), nor has any Existing Company Entity received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including all federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case, such as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

(m)

Regulatory Permits.  The Existing Company Entities possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such permits could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, and the Existing Company Entities have not received any notice of proceedings relating to the revocation or modification of any such permits.

(n)

Title to Assets.  The Existing Company Entities own or have valid land use rights to all real property that is material to their respective businesses and good and marketable title in all personal property owned by them that is material to their respective businesses, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Existing Company Entities.  Any real property and facilities held under lease by the Existing Company Entities are held by them under valid, subsisting and enforceable leases.

(o)

Patents and Trademarks.  The Existing Company Entities have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights (collectively, the “Intellectual Property Rights”) that are necessary or material for use in connection with their respective businesses and which the failure to so have could, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.  No Existing Company Entity has received a written notice that the Intellectual Property Rights used by such Existing Company Entity violates or infringes upon the rights of any Person.  Except as set forth on Schedule 3.1(o), to the knowledge of the Existing Company Entities, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.

(p)

Insurance.  The Existing Company Entities are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Existing Company Entities are engaged.

(q)

Certain Registration Matters.  Assuming the accuracy of the Investors’ representations and warranties set forth in Section 3.2(b)-(e), no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investors or the transfer of the 2009 Make Good Shares or 2010 Make Good Shares by the Make Good Pledgor to the Investors under the Transaction Documents.  The Company is eligible to register its Common Stock for resale by the Investors under the Securities Act.

(r)

Certain Fees.  Except as described in Schedule 3.1(r), no brokerage or finder’s fees or commissions are or will be payable by the Existing Company Entities to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement.  The Investors shall have no obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by an Investor pursuant to written agreements executed by such Investor which fees or commissions shall be the sole responsibility of such Investor) made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement.

(s)

Transactions With Affiliates and Employees; Customers.  Except as described in Schedule 3.1(s), none of the officers, directors or 5% or more shareholders of any of the Existing Company Entities, and, to the knowledge of the Company, none of the employees of any of the Existing Company Entities, is presently a party to any transaction with any of the Existing Company Entities (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such Person or, to the knowledge of the Company, any entity in which any officer, director, or such employee or 5% or more shareholder has a substantial interest or is an officer, director, trustee or partner.  None of the Existing Company Entities owes any money or other compensation to any of their respective officers or directors or shareholders, except to the extent of ordinary course compensation arrangements.  No material customer of any of the Existing Company Entities has indicated their intention to diminish their relationship with such Existing Company Entity and none of the Existing Company Entities has any knowledge from which it could reasonably conclude that any such customer relationship may be adversely affected.

(t)

No Additional Agreements.  None of the Existing Company Entities has any agreement or understanding with any Investor with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.

(u)

Foreign Corrupt Practices Act.  None of the Existing Company Entities nor to the knowledge of the Company, any agent or other person acting on behalf of the Existing Company Entities, has, directly or indirectly, (i) used any funds, or will use any proceeds from the sale of the Shares, for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company, or any such Existing Company Entity (or made by any Person acting on their behalf of which the Company is aware) or, to the knowledge of the Existing Company Entities, any members of their respective management which is in violation of any Legal Requirement, or (iv) has violated in any material respect any provision of th e Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder which was applicable to the Existing Company Entities.

(v)

Other Representations and Warranties Relating to WFOE.

(i)

All material consents, approvals, authorizations or licenses requisite under PRC Legal Requirements for the due and proper establishment and operation of WFOE have been duly obtained from the relevant PRC Governmental Bodies and are in full force and effect.  

(ii)

All filings and registrations with the PRC Governmental Bodies required in respect of WFOE and its capital structure and operations including, without limitation, the registration with the Ministry of Commerce, the China Securities Regulatory Commission, the State Administration of Industry and or their respective local divisions of Commerce, the State Administration of Foreign Exchange, tax bureau and customs authorities have been duly completed in accordance with the relevant PRC Legal Requirements, except where, the failure to complete such filings and registrations does not, and would not, individually or in the aggregate, have a Material Adverse Effect.

(iii)

WFOE has complied with all relevant PRC Legal Requirements regarding the contribution and payment of its registered share capital, the payment schedule of which has been approved by the relevant PRC Governmental Bodies.  There are no outstanding commitments made by the Company or any Subsidiary (or any of their shareholders) to sell any equity interest in WFOE.

(iv)

WFOE has not received any letter or notice from any relevant PRC Governmental Body notifying it of revocation of any licenses or qualifications issued to it or any subsidy granted to it by any PRC Governmental Body for non-compliance with the terms thereof or with applicable PRC Legal Requirements, or the lack of compliance or remedial actions in respect of the activities carried out by WFOE, except such revocation as does not, and would not, individually or in the aggregate, have a Material Adverse Effect.

(v)

WFOE has conducted its business activities within the permitted scope of business or has otherwise operated its business in compliance with all relevant Legal Requirements and with all requisite licenses and approvals granted by competent PRC Governmental Bodies other than such non-compliance that do not, and would not, individually or in the aggregate, have a Material Adverse Effect.  As to licenses, approvals and government grants and concessions requisite or material for the conduct of any material part of WFOE’s business which is subject to periodic renewal, the Company has no knowledge of any reasons related to the WFOE for which such requisite renewals will not be granted by the relevant PRC Governmental Bodies.

(vi)

With regard to employment and staff or labor, WFOE has complied with all applicable PRC Legal Requirements in all material respects, including without limitation, those pertaining to welfare funds, social benefits, medical benefits, insurance, retirement benefits, pensions or the like, other than such non-compliance that do not, and would not, individually or in the aggregate, have a Material Adverse Effect.

(w)

Disclosure.  All disclosure provided to the Investors regarding the Company Entities and their respective businesses and the transactions contemplated hereby, furnished by or on behalf of the Company Entities (including their respective representations and warranties set forth in this Agreement and the disclosure set forth in any diligence report or business plan provided by any Company Entity or any Person acting on such Company Entity’s behalf) are true and correct in all material aspects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

3.2.

Representations and Warranties of the Investors.  Each Investor hereby, for itself and for no other Investor, represents and warrants to the Company as follows:

(a)

Organization; Authority.  If such Investor is a business entity, such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations thereunder.  The execution, delivery and performance by such Investor of the transactions contemplated by this Agreement has been duly authorized by all necessary corporate or, if such Investor is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Investor.  Each Transaction Document to which it is a party has been duly executed by such Investor, and when delivered by such Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Inves tor, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

(b)

Investment Intent.  Such Investor is acquiring the Securities as principal for its own account for investment purposes only and not with a view towards, or resale in connection with, a public sale or distribution of such Securities or any part thereof, without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws.  Subject to the immediately preceding sentence, nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time.  Such Investor is acquiring the Securities hereunder in the ordinary course of its business.  Such Investor does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

(c)

Investor Status.  At the time such Investor was offered the Securities, it was an “accredited investor” as defined in Rule 501(a) under the Securities Act.  Such Investor is not a registered broker dealer under Section 15 of the Exchange Act.

(d)

General Solicitation.  Such Investor is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio.

(e)

Access to Information.  Such Investor acknowledges that it has reviewed the Disclosure Materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.  Neither such inquiries nor any other investigation conducted by or on behalf of such Investor or its representatives or counsel shall modify, amend or affect such Investor’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents.

(f)

Certain Trading Activities.  Such Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, engaged in any transactions in the securities of the Company (including any Short Sales involving the Company’s securities) since the time that such Investor was first contacted by the Company, any Placement Agent, or any other Person acting on behalf of the Company regarding the investment in the Company contemplated by this Agreement.  Such Investor covenants that neither it nor any Person acting on its behalf or pursuant to any understanding with it will engage in any transactions in the securities of the Company (including Short Sales) prior to the time that the transactions contemplated by this Agreement are publicly disclosed.

(g)

Independent Investment Decision.  Such Investor has independently evaluated the merits of its decision to purchase Securities pursuant to the Transaction Documents, and such Investor confirms that it has not relied on the advice of any other Investor’s business and/or legal counsel in making such decision.  Such Investor has not relied on the business or legal advice of the Placement Agents or any of their respective agents, counsel, or Affiliates in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to such Investor in connection with the transactions contemplated by the Transaction Documents.

(h)

Rule 144.  Such Investor understands that the Securities must be held indefinitely unless such Securities are registered under the Securities Act or an exemption from registration is available.  Such Investor acknowledges that it is familiar with Rule 144 and that such Investor has been advised that Rule 144 permits resales only under certain circumstances.  Such Investor understands that to the extent that Rule 144 is not available, such Investor will be unable to sell any Securities without either registration under the Securities Act or the existence of another exemption from such registration requirement.

(i)

General.  Such Investor understands that the Securities are being offered and sold in reliance on a transactional exemption from the registration requirements of federal and state securities laws and the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the applicability of such exemptions and the suitability of such Investor to acquire the Securities.  Such Investor understands that no United States federal or state agency or any Governmental Body has passed upon or made any recommendation or endorsement of the Securities.

(j)

Regulation S.  If such Investor is not a U.S. Person (as such term is defined in Section 902(a) of Regulation S), such Investor (i) acknowledges that the certificate(s) representing or evidencing the Securities contain a customary restrictive legend restricting the offer, sale or transfer of any Securities except in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration, (ii) agrees that all offers and sales by such Investor of Securities shall be made pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from, or a transaction not subject to the registration requirements of, the Securities Act, (iii) represents that the offer to purchase the Securities was made to such Investor outside of the United States, and such Investor was, at the time of the offer and will be, at the time of the sale and is now, outside the Uni ted States, (iv) has not engaged in or directed any unsolicited offers to purchase Securities in the United States, (v) is neither a U.S. Person nor a Distributor (as such terms are defined in Section 902(a) and 902(c), respectively, of Regulation S), (vi) has purchased the Securities for its own account and not for the account or benefit of any U.S. Person, (vii) is the sole beneficial owner of the Shares specified on Schedule 3.2(j) opposite his name and has not pre-arranged any sale with a purchaser in the United States, and (ix) is familiar with and understands the terms and conditions and requirements contained in Regulation S, specifically, without limitation, each Investor understands that the statutory basis for the exemption claimed for the sale of the Securities would not be present if the sale, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the Securities Act.

The Company acknowledges and agrees that no Investor has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2.

ARTICLE 4.
OTHER AGREEMENTS OF THE PARTIES

4.1.

Compliance with Securities Laws.

(a)

Securities may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of the Securities, other than pursuant to an effective registration statement, pursuant to Rule 144, or to the Company, to an Affiliate of an Investor or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor, the substance of which opinion shall be reasonably acceptable to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act.  Notwithstanding the foregoing, the Company hereby consents to and agrees to register on the books of the Company and with its transfer agent, without any such legal opinion, any transfer of Securities by an Investor to an Affiliate of such Investor, provided that the transferee certifies to the Company that it is an “accredited in vestor” as defined in Rule 501(a) under the Securities Act and provided that such Affiliate does not request any removal of any existing legends on any certificate evidencing the Securities.

Certificates evidencing the Securities will contain the following legend, until such time as they are not required under Section 4.1(c):

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

The Company acknowledges and agrees that an Investor may from time to time pledge, and/or grant a security interest in some or all of the Securities pursuant to a bona fide margin agreement in connection with a bona fide margin account and, if required under the terms of such agreement or account, such Investor may transfer pledged or secured Securities to the pledgees or secured parties.  Such a pledge or transfer would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion may be required in connection with a subsequent transfer following default by the Investor transferee of the pledge.  No notice shall be required of such pledge.  At the appropriate Investor’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pl edge or transfer of the Securities including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder.  Except as otherwise provided in Section 4.1(c), any Securities subject to a pledge or security interest as contemplated by this Section 4.1(b) shall continue to bear the legend set forth in this Section 4.1(b) and be subject to the restrictions on transfer set forth in Section 4.1(a).

(b)

Certificates evidencing Securities shall not contain any legend (including the legend set forth in Section 4.1(b)):

(i)

following a sale or transfer of such Securities pursuant to an effective registration statement (including a Registration Statement), or

(ii)

following a sale or transfer of such Securities pursuant to Rule 144 (assuming the transferee is not an Affiliate of the Company), or

(iii)

while such Securities are eligible for sale under Rule 144 without volume restriction.

4.2.

Registration Obligation.  The Company shall file a registration statement as soon as commercially reasonable, but in any event within forty-five (45) days of the Closing Date, on Form S-1, or such other form that is appropriate, covering the resale of the Shares.  The Company shall file a registration statement as soon as commercially reasonable, but in any event within forty-five (45) days of the date the 2009 Make Good Shares or 2010 Make Good Shares, as applicable, are issuable to Investors, on Form S-1, or such other form that is appropriate, covering the resale of the, the 2009 Make Good Shares and the 2010 Make Good Shares, as applicable.    

(b)

If at any time prior to the one (1) year anniversary of the Closing Date, the Company or any shareholder of the Company proposes to register any of its Common Stock or any securities convertible into Common Stock under the Securities Act (other than pursuant to an offering of securities in connection with an employee benefit, share dividend, share ownership or dividend reinvestment plan or registration of securities in connection with a business combination transaction) and the registration form to be used may be used by the Company for the registration of the Registrable Securities, the Company shall give prompt written notice to the Investors of its intention to effect such a registration (each a “Piggyback Notice”) and shall, if commercially practicable, include in such registration statement all Registrable Securities then required to be registered that are not then covered by an effective registration statement with respect to which the Company has received written reques t from the Investors for inclusion therein within ten (10) days after the date of sending the Piggyback Notice (the “Piggyback Registration”) to the Investors.

(c)

In connection with any registration, the Company will:

(i)

prepare and file with the Commission a registration statement in a commercially reasonable time with respect to such securities and use its commercially reasonable efforts to cause such registration statement to become and remain effective for the Effectiveness Period;

(ii)

prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities covered by such registration statement until the such time as all of such securities have been disposed of in a public offering;

(iii)

furnish to the Investors, at the option of the Company in electronic format, such number of copies of a summary prospectus or other prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents, as the Investors may reasonably request;

(iv)

register or qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions within the United States and Puerto Rico as the Investors shall reasonably request (provided, however, that it shall not be obligated to qualify as a foreign corporation to do business under the laws of any jurisdiction in which it is not then qualified or to file any general consent to service or process);

(v)

furnish, at the request of the Investors, a legal opinion of the counsel representing the Company for the purposes of such registration, addressed to the Investors, in customary form and covering matters of the type customarily covered in such legal opinions;

(vi)

otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, at the option of the Company in electronic format, as soon as reasonably practicable, but not later than eighteen (18) months after the effective date of the Registration Statement, an earnings statement covering the period of at least twelve (12) months beginning with the first full month after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act; provided, however, that the Company shall have no such obligation if the Effectiveness Period has expired;

(vii)

notify the Investors, at any time when the offering documents include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and at the request of the Investors, prepare and furnish to such person(s) such reasonable number of copies of any amendment or supplement to the offering documents as may be necessary so that, as thereafter delivered to the Investors of such shares, such offering documents shall not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and to deliver to Investors of any other securities of the Company included in the offering copies of such offering documents as so amended or supplemented;

(viii)

 keep the Investors informed of the Company’s best estimate of the earliest date on which the offering documents will become effective, and promptly notify the Investors of (A) the effectiveness of such offering documents, (B) a request by the Commission for an amendment or supplement to such offering documents, (C) the issuance by the Commission of an order suspending the effectiveness of the offering documents, or of the threat of any proceeding for that purpose, and (D) the suspension of the qualification of any securities to be included in the offering documents for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose; and

(ix)

before filing any registration statement as contemplated by Section 4.2 hereof and any amendment or supplement thereto (including any documents incorporated by reference therein), the Company shall furnish to the Investors copies of all such offering documents, at the option of the Company in electronic format, which offering documents shall be subject to the review of such Investors and, where feasible, the Company shall make such changes in the offering documents as are promptly and reasonably requested by an Investor.  The Investors shall provide their comments to the offering documents, if any, within 2 business days after the receipt of such offering documents.

(d)

All registrations (piggyback or otherwise) made by the Investors will be made solely at the Company’s expense, other than (i) if an underwritten offering is consented to by the Company, the underwriters’, broker-dealers’ and placement agents’ selling discounts, commissions and fees relating to the sale of the Investors’ securities, (ii) any costs and expenses of counsel, accountants or other advisors retained by the Investors and (iii) all transfer, franchise, capital stock and other taxes, if any, applicable to the Investors’ securities (collectively, “Investors’ Expenses”) which shall be paid by the Investors.

(e)

In the event of any registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless each Investor holding such Registrable Securities, such Investor's directors and officers, and each other person (including each underwriter) who participated in the offering of such Registrable Securities and each other person, if any, who controls such Investor or such participating person within the meaning of the Securities Act, against any losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys' fees), or expenses, joint or several, to which such Investor or any such director or officer or participating person or controlling person may become subject under the Securities Act or any other statute or at common law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue state ment or any alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (ii) any omission or any alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any other violation of any applicable securities laws, and in each of the foregoing circumstances shall reimburse such Investor or such director, officer or participating person or controlling person for any legal or any other expenses reasonably incurred by such Investor or such director, officer or participating person or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liab ility arises out of or is based upon any actual or alleged untrue statement or actual or alleged omission made in such registration statement, preliminary prospectus, prospectus or amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Investor specifically for use therein.  

(f)

In the event of any registration of any Registrable Securities under the Securities Act pursuant to this Agreement, each Investor holding Registrable Securities agrees to indemnify and hold harmless the Company, its directors and officers and each other person, if any, who controls the Company within the meaning of the Securities Act and any other Investor against any losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys' fees), or expenses, joint or several, to which the Company or any such director or officer or any such person may become subject under the Securities Act or any other statute or at common law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or any alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, or (ii) any omission or any alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but in either case only to the extent that such untrue statement or omission is (A) made in reliance on and in conformity with any information furnished in writing by such Investor to the Company concerning such Investor specifically for inclusion in the offering documents relating to such offering, and (B) is not corrected by such Investor and distributed to the Investors within a reasonable period of time.  Notwithstanding the provisions of this paragraph, no Investor shall be required to indemnify any person pursuant to this paragraph or to contribute pursuant to paragraph (g) below in an amount in excess of the amount of the aggregate net proceeds received by such Investor in connection with any such registration under the S ecurities Act.

(g)

If the indemnification provided for above from the indemnifying party is unavailable to an indemnified party hereunder in respect of any losses, claims, damages, liabilities or expenses referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.  The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action.  The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.  The parties hereto agree that it would not be just and equitable if contribution pursuant to this paragraph were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(h)

In order to permit the Investors to sell the Registrable Securities, if so desired, pursuant to any applicable resale exemption under applicable securities laws and regulations, the Company shall:

(i)

comply with all rules and regulations of the Commission in connection with use of any such resale exemption;

(ii)

make and keep available adequate and current public information regarding the Company;

(iii)

file with the Commission in a timely manner, all reports and other documents required to be filed under the Securities Act, the Exchange Act, or other applicable securities laws and regulations;

(iv)

upon written request from any Investor, furnish to such Investor copies of annual reports required to be filed under the Exchange Act and other applicable securities laws and regulations; and

(v)

upon written request from any Investor, furnish to such Investor, upon written request (A) a copy of the most recent quarterly report of the Company and such other reports and documents filed by the Company with the Commission and (B) such other information as may be reasonably required to permit the Investors to sell pursuant to any applicable resale exemption under the Securities Act or other applicable securities law and regulations, if any.

(vi)

All rights of the Investors under this Section 4 are unique to and limited to the Investors and may not be transferred or inure to the benefit of the Investors’ successors and assigns or any other transferee who obtains Registrable Securities.

4.3.

Integration. The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Investors, or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market in a manner that would require stockholder approval of the sale of the securities to the Investors.

4.4.

Subsequent Registrations.  The Company may not file any registration statement (other than on Form S-8)  with the Commission with respect to any securities of the Company prior to the time that all Shares are registered pursuant to one or more effective registration statement(s), and the prospectuses forming a portion of such registration statement(s) is available for the resale of all Shares, except that if an Investor declines in writing to include their Shares in a registration statement, then this Section 4.4 hereafter ceases to apply to the Shares of such Investor (other than if such Investor declines to include its Shares because such Investor was unwilling to be named as an underwriter in such Registration Statement).

4.5.

Securities Laws Disclosure; Publicity.  By (i) 9:30 a.m. (New York time) on the Trading Day following the Closing Date, the Company shall issue a press release, disclosing the transactions contemplated by the Transaction Documents (including, without limitation, details with respect to the make good provision and thresholds (i.e. After Tax Net Income) contained in Section 4.7 herein as well as projected revenue estimates for the Company for each of the fiscal years ending March 31, 2009 and March 31, 2010) and the Closing and by (ii) 5:30 p.m. (New York time) on the Trading Day following the Closing Date, the Company will file a Current Report on Form 8-K, disclosing the material terms of the Transaction Documents, including details with respect to the make good provision and thresholds (i.e. After Tax Net Income) contained in Section 4.7 herein (and attach as exhibits thereto all existing Transaction Documents) and the Closing.  The Company covenants that f ollowing such disclosure, the Investors shall no longer be in possession of any material, non-public information with respect to any of the Existing Company Entities.  In addition, the Company will make such other filings and notices in the manner and time required by the Commission and the Trading Market on which the Common Stock is listed.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Investor, or include the name of any Investor in any filing with the Commission (other than the Registration Statement and any exhibits to filings made in respect of this transaction in accordance with periodic filing requirements under the Exchange Act) or any regulatory agency or Trading Market, without the prior written consent of such Investor, except to the extent such disclosure is required by law or Trading Market regulations.

4.6.

Use of Proceeds. The Company will use the net proceeds from the sale of the Shares hereunder for working capital purposes, acquisitions and/or capital expenditures.

4.7.

Make Good Shares.  

(a)

The Make Good Pledgor agrees that in the event that the After Tax Net Income reported in the 2009 Annual Report is less than $13,919,707 (the “2009 Guaranteed ATNI”), a number of 2009 Make Good Shares (as defined and calculated below) shall be transferred in accordance with the Make Good Escrow Agreement to the Investors on a pro rata basis (determined by dividing each Investor’s Investment Amount by the aggregate of all Investment Amounts delivered to the Company by the Investors hereunder) for no consideration other than payment of their respective Investment Amount paid to the Company at Closing and without the need of any Investor to take any action with respect thereto.  The aggregate number of “2009 Make Good Shares” means a number of shares of Common Stock equal to 50% of the Aggregate Shares issued pursuant to this Agreement (as equitably adjusted for any stock splits, stock combinations, stock dividends or similar transactions).  The nu mber of 2009 Make Good Shares issuable to Investors shall be equal to:

[(2009 Guaranteed ATNI – actual After Tax Net Income of the Company for the fiscal year ended March 31, 2009)/2009 Guaranteed ATNI]*aggregate number of 2009 Make Good Shares.

The Make Good Pledgor agrees that in the event that the After Tax Net Income reported in the 2009 Annual Report is less than $18,495,315 (the “2010 Guaranteed ATNI”), a number of 2010 Make Good Shares (as defined and calculated below) shall be transferred in accordance with the Make Good Escrow Agreement to the Investors on a pro rata basis (determined by dividing each Investor’s Investment Amount by the aggregate of all Investment Amounts delivered to the Company by the Investors hereunder) for no consideration other than payment of their respective Investment Amount paid to the Company at Closing and without the need of any Investor to take any action with respect thereto.  The aggregate number of “2010 Make Good Shares” means a number of shares of Common Stock equal to 50% of the Aggregate Shares issued pursuant to this Agreement (as equitably adjusted for any stock splits, stock combinations, stock dividends or similar transactions).  The nu mber of 2010 Make Good Shares issuable to Investors shall be equal to:

[(2010 Guaranteed ATNI – actual After Tax Net Income of the Company for the fiscal year ended March 31, 2010)/2010 Guaranteed ATNI]*aggregate number of 2010 Make Good Shares.  

In the event that the After Tax Net Income reported in the 2009 Annual Report is equal to or greater than the 2009 Guaranteed ATNI, no transfer of the 2009 Make Good Shares shall be required by the Make Good Pledgor to the Investors and such 2009 Make Good Shares shall be returned to the Make Good Pledgor in accordance with the Make Good Escrow Agreement.  In the event that the After Tax Net Income reported in the 2010 Annual Report is equal to or greater than the 2010 Guaranteed ATNI, no transfer of the 2010 Make Good Shares shall be required by the Make Good Pledgor to the Investors and such 2010 Make Good Shares shall be returned to the Make Good Pledgor in accordance with the Make Good Escrow Agreement.  Any such transfer of the 2009 Make Good Shares or the 2010 Make Good Shares shall be made to the Investors or the Make Good Pledgor, as applicable, within 10 Business Days after the date which the 2009 Annual Report or 2010 Annual Report, as applicable, is filed with the Commissi on without any further action on the part of the Investors.  “After Tax Net Income” shall mean the Company’s operating income after taxes for the fiscal year ending March 31, 2009 or March 31, 2010 (as applicable) in each case determined in accordance with GAAP as reported in the 2009 Annual Report or 2010 Annual Report (as applicable).  Notwithstanding the foregoing or anything else to the contrary herein, for purposes of determining whether or not the 2009 Guaranteed ATNI and 2010 Guaranteed ATNI have been met, (i) expenses incurred as a result of the Company's fulfillment of its obligations under Section 4.8 hereunder shall be excluded (i.e., costs for hiring the independent directors (including compensation for such independent directors and costs for director’s and officer’s insurance coverage in an amount and scope that is customary for a company of the Company’s size and nature) and hiring of the investor relations firm); (ii) the release of any of the 20 09 Make Good Shares and/or 2010 Make Good Shares to the Make Good Pledgor as a result of the operation of this Section 4.7 shall not be deemed to be an expense, charge, or any other deduction from revenues even though GAAP may require contrary treatment or the Annual Report for the respective fiscal years filed with the Commission by the Company may report otherwise; and (iii) expenses (including interests and fees) incurred as a result of the issuance of debt for an amount no greater than the difference between $20 million and the aggregate Investment Amount should be excluded.  Other than as set forth in this Section 4.7(a), no other exclusions shall be made for any non-recurring expenses of the Company in determining whether any of the 2009 Guaranteed ATNI or 2010 Guaranteed ATNI have been achieved.  If prior to the second anniversary of the filing of either of the 2009 Annual Report or the 2010 Annual Report (as applicable), the Company or their auditors report or recognize that the financial s tatements contained in such report are subject to amendment or restatement such that the Company would recognize or report adjusted After Tax Net Income of less than either of the 2009 Guarantee ATNI or the 2010 Guaranteed ATNI (as applicable), then notwithstanding any prior return of 2009 Make Good Shares or 2010 Make Good Shares to the Make Good Pledgor, the Make Good Pledgor will, within 10 Business Days following the earlier of the filing of such amendment or restatement or recognition, deliver the relevant 2009 Make Good Shares or 2010 Make Good Shares to the Investors without any further action on the part of the Investors.  

(b)

In connection with the foregoing, the Make Good Pledgor agrees that within five Trading Days following the Closing, the Make Good Pledgor will deposit all 2009 Make Good Shares and 2010 Make Good Shares into escrow in accordance with the Make Good Escrow Agreement along with stock powers executed in blank (or such other signed instrument of transfer acceptable to the Company’s transfer agent), and the handling and disposition of the 2009 Make Good Shares and 2010 Make Good Shares shall be governed by this Section 4.7 and the Make Good Escrow Agreement.  The Company shall notify the Investors as soon as the 2009 Make Good Shares and 2010 Make Good Shares have been deposited with the Make Good Escrow Agent.  The Make Good Pledgor understands and agrees that the Investors’ right to receive 2009 Make Good Shares and 2010 Make Good Shares pursuant to this Section 4.7 and the Make Good Escrow Agreement shall continue to run to the benefit of each Investor even if such Investor sh all have transferred or sold all or any portion of its Shares, and that each Investor shall have the right to assign its rights to receive all or any such shares of Common Stock to other Persons in conjunction with negotiated sales or transfers of any of its Shares.  The Make Good Pledgor represents and warrants that it has carefully considered and understands its obligations and rights under this Section 4.7 and the Make Good Escrow Agreement, and in furtherance thereof (x) has consulted with its legal and other advisors with respect thereto and (y) hereby forever waives and agrees that it may not assert any equitable defenses in any Proceeding involving either of the 2009 Make Good Shares and/or 2010 Make Good Shares.

(c)

The Company covenants and agrees that upon any transfer of 2009 Make Good Shares or 2010 Make Good Shares to the Investors in accordance with the Make Good Escrow Agreement, the Company shall promptly instruct its Transfer Agent to reissue such 2009 Make Good Shares or 2010 Make Good Shares in the applicable Investor’s name and deliver the same as directed by such Investor.

(d)

If any term or provision of this Section 4.7 contradicts or conflicts with any term or provision of the Make Good Escrow Agreement, the terms of the Make Good Escrow Agreement shall control.

4.8.

Closing Escrow Holdback.  The Company and Investors agree that, from the aggregate Investment Amounts to be delivered into escrow pursuant to the Closing Escrow Agreement, at the Closing $450,000 (“Total Holdback Amount”) shall be deposited into escrow and administered in accordance with the Holdback Escrow Agreement in order to incentivize the Company to satisfy the following conditions:

(a)

Independent Board of Directors.  The Company covenants and agrees that no later than 180 days following the Closing Date, the Board of Directors of the Company shall be comprised of a minimum of five members (at least two of whom shall be fluent English speakers who possess experience such that he or she can fulfill its fiduciary obligations and other responsibilities as a director of a United States publicly listed company incorporated in the United States), a majority of which shall be “independent directors” as such term is defined in NASDAQ Marketplace Rule 4200(a)(15) and a meeting of such full Board of Directors shall be convened within such 180 days following the Closing Date.  The Board of Directors shall appoint Board committees, which shall include, but not be limited to, an Audit Committee, Nominating Committee and Compensation Committee.  The Company agrees that $250,000 (the “Board Holdback Escrow Amount”) of the Total Holdback Amount delivered to the Escrow Agent pursuant to the Closing Escrow Agreement shall remain in escrow post Closing pursuant to and subject to the provisions of the Holdback Escrow Agreement until such time as the Company complies with the conditions precedent to its release in accordance with the Holdback Escrow Agreement.

(b)

Investor Relations Firm.  The Company covenants and agrees that no later than thirty (30) days following the Closing Date, the Company shall have hired either of CCG Elite, Hayden Communications, or Integrated Corporate Relations as its investor relations firm.  Subject to the provisions of this Section 4.8(b), the Company agrees that $200,000 (the “IR Holdback Amount”) of the Total Holdback Amount delivered to the Escrow Agent pursuant to the Closing Escrow Agreement shall remain in escrow post Closing pursuant to and subject to the provisions of the Holdback Escrow Agreement, it being understood that such IR Holdback Amount will be used by the Company to pay such firm.  

4.9.

Right of First Refusal.  

(a)

From the date hereof until the one (1) year anniversary of the effective date of a registration statement registering the resale of all the Shares (the “Trigger Date”), the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its or its Subsidiaries’ equity or equity equivalent securities, including, without limitation, any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or Common Stock Equivalents (any such offer, sale, grant, disposition or announcement being referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 4.9.  

(b)

The Company shall deliver to each Investor hereunder a written notice (the ”Offer Notice”) of any proposed or intended issuance or sale or exchange (the ”Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (v) identify and describe the Offered Securities, (w) include the final form of documents and agreements governing the Subsequent Placement, (x) specify the price and other terms upon which the Offered Securities are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (y) identify the persons or entities (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Investors all of the Offered Securities, allocated pro-rata among such Investors in accordance with their Investment Amount relative t o the aggregate Investment Amount of all Investors (the “Basic Amount”), and (b) with respect to each Investor that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Investors as such Investor shall indicate it will purchase or acquire should the other Investors subscribe for less than their Basic Amounts (the “Undersubscription Amount”), which process shall be repeated until the Investors shall have an opportunity to subscribe for any remaining Undersubscription Amount.

(c)

To accept an Offer, in whole or in part, such Investor must deliver a written notice to the Company prior to the end of the fifth Business Day after such Investor’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of such Investor’s Basic Amount that such Investor elects to purchase and, if such Investor shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Investor elects to purchase (in either case, the “Notice of Acceptance”).  If the Basic Amounts subscribed for by all Investors are less than the total of all of the Basic Amounts, then each Investor who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription Amounts subscribed for exceed the difference between the tot al of all the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Investor who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Investor bears to the total Basic Amounts of all Investors that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent its deems reasonably necessary.

(d)

The Company shall have twenty Business Days from the expiration of the Offer Period above to (i) offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Investors (the “Refused Securities”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring person or persons or less favorable to the Company than those set forth in the Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent Placement Agreement (as defined below), and (b) either (x) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the termination of such Subsequent Placement Agreement, which shall be filed with the Commission on a Current Report on Form 8-K with such Subsequent Placement Agreement and any docu ments contemplated therein filed as exhibits thereto.  If no disclosure has been made by the Company by the end of the twenty Business Day period referred to in this subsection (d), the Subsequent Placement shall be deemed to have been abandoned and the Investors shall no longer be deemed to be in possession of any non-public information with respect to the Company.

(e)

In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in this Section 4.9), then each Investor may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Investor elected to purchase pursuant to Section 4.9(c) above multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Investors pursuant to Section 4.9(c) above prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities.  In the event that any Investor so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Investors in accordance with Section 4.9(b) above.

(f)

Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Investors shall acquire from the Company, and the Company shall issue to the Investors, the number or amount of Offered Securities specified in the Notices of Acceptance, as reduced pursuant to Section 4.9(e) above if the Investors have so elected, upon the terms and conditions specified in the Offer.  The purchase by the Investors of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Investors of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Investors and their respective counsel (such agreement, the “Subsequent Placement Agreement”).

(g)

Any Offered Securities not acquired by the Investors or other persons in accordance with Section 4.9(f) above may not be issued, sold or exchanged until they are again offered to the Investors under the procedures specified in this Agreement.

(h)

In exchange for the Company’s willingness to agree to these procedures, each Investor hereby irrevocably agrees that it will hold in strict confidence any and all Offer Notices, the information contained therein, and the fact that the Company is contemplating a Subsequent Placement, until such time as the Company is obligated to make the disclosures required by Section 4.9(d), or unless it notifies the Company in writing that it no longer desires to receive Offer Notices.

(i)

The rights contained in this Section shall not apply to the issuance and sale by the Company of :

(i)

shares of Common Stock or Common Stock Equivalents to employees, officers, or directors of the Company, as compensation for their services to the Company or any of its direct or indirect Subsidiaries pursuant to arrangements approved by the Board of Directors of the Company (including, but not limited to, any stock or option plan duly adopted by the Board of Directors of the Company),

(ii)

shares of Common Stock or Common Stock Equivalents issued as consideration for the acquisitions of or strategic transactions with another company or business where the primary purpose is not to raise capital for the Company or any Subsidiary, which acquisition or strategic transaction has been approved by the Board of Directors of the Company,

(iii)

up to an aggregate of $500,000 worth of shares of Common Stock or Common Stock Equivalents issued to non-Affiliates in connection with services rendered to the Company pursuant to arrangements approved by the Board of Directors of the Company,

(iv)

securities upon the exercise or exchange of or conversion of any Common Stock Equivalents issued hereunder or to any placement agents in connection with the transactions contemplated hereby and/or Common Stock Equivalents issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, or

(v)

shares of Common Stock or Common Stock Equivalents issued as part of a primary underwritten public offering (which shall not include a shelf takedown) with proceeds to the Company equal to or greater than $20,000,000.

4.10.

Agency.  

(a)

The Investors hereby appoint WLT Brothers Capital, Inc. ("WLT") and WLT hereby accepts such appointment as agent on behalf of and for the Investors for the purpose of rendering certain instructions in accordance with the Make Good Escrow Agreement and Holdback Escrow Agreement.

(b)

WLT shall be entitled in its capacity as agent to take such actions in connection with monitoring and enforcing the Make Good Escrow Agreement and Holdback Escrow Agreement as WLT shall determine is reasonably necessary.  WLT is not charged with any obligation to conduct any investigation into the financial reports or make any other investigation related to the Make Good Escrow Agreement and Holdback Escrow Agreement.  In the event of any actual or alleged mistake or fraud of any Existing Company Entity, its auditors or any other person (other than WLT) in connection with such financial reports of the Company, WLT shall have no obligation or liability to any Investor hereunder.  

(c)

WLT is not a party to, and is not bound by or charged with notice of any agreement out of which the Make Good Escrow Agreement or Holdback Escrow Agreement may arise.  WLT acts under this Agreement as agent only and is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of the subject matter of the escrow, or any part thereof, or for the form or execution of any notice given by any other party hereunder or thereunder, or for the identity or authority of any person executing any such notice.  WLT will have no duties or responsibilities other than those expressly set forth in the Make Good Escrow Agreement and Holdback Escrow Agreement.  WLT will be under no liability to anyone by reason of any failure on the part of any party hereto or the Make Good Escrow Agreement or Holdback Escrow Agreement or any maker, endorser or other signatory of any document to perform such person's or entity's obligations hereunder or under any s uch document, including the Make Good Escrow Agreement and Holdback Escrow Agreement.  Except for this Agreement, the Make Good Escrow Agreement and Holdback Escrow Agreement and instructions provided by WLT to the Escrow Agent pursuant to the terms of such agreements, WLT will not be obligated to recognize any agreement between or among any or all of the persons or entities referred to herein, notwithstanding its knowledge thereof.

(d)

WLT will not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the exercise of its own best judgment, and may rely conclusively on, and will be protected in acting upon, any order, notice, demand, certificate, or opinion or advice of counsel, statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is reasonably believed by WLT to be genuine and to be signed or presented by the proper person or persons.  The duties and responsibilities of WLT hereunder shall be determined solely by the express provisions of this Agreement and the Make Good Escrow Agreement and Holdback Escrow Agreement and no other or further duties or responsibilities shall be implied, including, but not limited to, any obligation under or imposed by any laws of the State of Ne w York upon fiduciaries.

(e)

The Investors hereby, jointly and severally, indemnify and hold harmless WLT and its principals, partners, agents, employees and affiliates from and against any expenses, including reasonable attorneys' fees and disbursements, damages or losses suffered by WLT in connection with any claim or demand, which, in any way, directly or indirectly, arises out of or relates to this Agreement or the Make Good Escrow Agreement or the Holdback Escrow Agreement or the services of WLT hereunder; except, that if WLT is guilty of willful misconduct or fraud under this Agreement, then WLT will bear all losses, damages and expenses arising as a result of such willful misconduct or fraud.  Promptly after the receipt by WLT of notice of any such demand or claim or the commencement of any action, suit or proceeding relating to such demand or claim, WLT will notify the other parties hereto in writing.  For the purposes hereof, the terms "expense" and "loss" will include all amounts pa id or payable to satisfy any such claim or demand, or in settlement of any such claim, demand, action, suit or proceeding settled with the express written consent of the parties hereto, and all costs and expenses, including, but not limited to, reasonable attorneys' fees and disbursements, paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding.  The provisions of this Section shall survive the termination of this Agreement and the Make Good Escrow Agreement and the Holdback Escrow Agreement.

(f)

Should any controversy arise among the parties hereto with respect to this Agreement or the Make Good Escrow Agreement or the Holdback Escrow Agreement, WLT shall have the right to consult counsel and/or to institute an appropriate interpleader action to determine the rights of the parties.

(g)

At any time, upon five days written notice to the Investors, WLT may resign and be discharged from its duties as agent hereunder.  If, by the end of the five-day period following the giving of notice of resignation by WLT, the Investors shall have failed to appoint a successor agent, WLT may appoint an agent who in its good faith judgment shall be satisfactory to perform as agent hereunder.

ARTICLE 5.
CONDITIONS PRECEDENT TO CLOSING

5.1.

Conditions Precedent to the Obligations of the Investors to Purchase Shares.  The obligation of each Investor to acquire Shares at the Closing is subject to the satisfaction or waiver by such Investor, at or before the Closing, of each of the following conditions:

(a)

Representations and Warranties.  The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date when made and as of the Closing as though made on and as of such date;

(b)

Performance.  The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing;

(c)

No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents;

(d)

Adverse Changes.  Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably could have or result in a Material Adverse Effect;

(e)

Company Deliverables.  The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a);

(f)

Opinion of Company Counsel.  The Investors shall have received an opinion of counsel to the Company in form and substance reasonably satisfactory to the Investors; and

(g)

Termination.  This Agreement shall not have been terminated as to such Investor in accordance with Section 6.5.

5.2.

Conditions Precedent to the Obligations of the Company to sell Shares.  The obligation of the Company to sell Shares at the Closing is subject to the satisfaction or waiver by the Company, at or before the Closing, of each of the following conditions:

(a)

Representations and Warranties.  The representations and warranties of each Investor contained herein shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date;

(b)

Performance.  Each Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Investor at or prior to the Closing;

(c)

No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents;

(d)

Investors Deliverables.  Each Investor shall have delivered its Investors Deliverables in accordance with Section 2.2(b); and

(e)

Termination.  This Agreement shall not have been terminated as to such Investor in accordance with Section 6.5.

ARTICLE 6.
MISCELLANEOUS

6.1.

Fees and Expenses.  Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents.  The Company shall pay all stamp and other taxes and duties levied in connection with the issuance and/or transfer of the Securities.

6.2.

Entire Agreement.  The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

6.3.

Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such n otices and communications shall be as follows:

If to the Company:   

Fashion Tech International, Inc.

Daqing LongHeDa Food Co., Ltd.

No. 2 Wenhua Street

Dongfeng New Village, Daqing

Heilongjiang, China 163311

Facsimile: (86) 459-4609488

Attention:  Chief Executive Officer

With a copy to:

Thelen Reid Brown Raysman & Steiner LLP

701 8^th Street NW

Washington, D.C.

Facsimile:  (202) 654-1804  

Attn.:  Louis A. Bevilacqua, Esq.

If to an Investor:

To the address set forth under such Investor’s name on the signature pages hereof;

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

6.4.

Amendments; Waivers; No Additional Consideration.  No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Investors holding a majority of the Shares subscribed for by Investors (excluding any Investors that are Affiliates of the Company).  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.  No consideration shall be offered or paid to any Investor to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same consideration is also offered to all Investors who then hold Shares.  Notwithstanding anything co ntained herein to the contrary, a Person can, without the need for approval by any other Investors to this Agreement, become a Party to this Agreement by executing and delivering a joinder signature page hereto before the Outside Date, whereupon such Person will be deemed an Investor for all purposes of this Agreement and will be automatically added to Exhibit A hereto.

6.5.

Termination.  This Agreement may be terminated prior to Closing:

(a)

by written agreement of an Investor (as to itself but no other Investor) and the Company; and

(b)

by the Company or an Investor (as to itself but no other Investor) upon written notice to the other, if the Closing shall not have taken place by 6:30 p.m. Eastern time on the Outside Date; provided, that the right to terminate this Agreement under this Section 6.5(b) shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time.

In the event of a termination pursuant to this Section, the Company shall promptly notify all non-terminating Investors.  Upon a termination in accordance with this Section 6.5, the Company and the terminating Investor(s) shall not have any further obligation or liability (including as arising from such termination) to the other and no Investor will have any liability to any other Investor under the Transaction Documents as a result therefrom.  

6.6.

Construction; Language, Interpretation. 

The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.  The words “including,” “include” and other words of similar import shall be deemed to be followed by the words “without limitation.”

This Agreement is written in both English and Polish. Where there are differences of interpretation between the versions, the English version shall control.

6.7.

Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investors.  Any Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the Investors.

6.8.

No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

6.9.

Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the New York Courts.  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. &nb sp;If either party shall commence a Proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

6.10.

Survival.  The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Securities for 18 months following the Closing Date.

6.11.

Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

6.12.

Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

6.13.

Replacement of Securities.  If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested.  The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities.  If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

6.14.

Independent Nature of Investors’ Obligations and Rights.  The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under any Transaction Document.  The decision of each Investor to purchase Shares pursuant to the Transaction Documents has been made by such Investor independently of any other Investor.  Nothing contained herein or in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Investor acknowledges that no other Inves tor has acted as agent for such Investor in connection with making its investment hereunder and that no Investor will be acting as agent of such Investor in connection with monitoring its investment in the Shares or enforcing its rights under the Transaction Documents.  Each Investor shall be entitled to independently protect and enforce its rights, including the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose.  The Company acknowledges that each of the Investors has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple Investors and not because it was required or requested to do so by any Investor.

6.15.

Limitation of Liability.  Notwithstanding anything herein to the contrary, the Company acknowledges and agrees that the liability of an Investor arising directly or indirectly, under any Transaction Document of any and every nature whatsoever shall be satisfied solely out of the assets of such Investor, and that no trustee, officer, other investment vehicle or any other Affiliate of such Investor or any investor, shareholder or holder of shares of beneficial interest of such a Investor shall be personally liable for any liabilities of such Investor.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK -- SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

FASHION TECH INTERNATIONAL, INC.

By: ________________________

Name: Jinglin Shi

Title: Chief Executive Officer

Only as to Sections 3.1 and Article 6 herein:

FEZDALE INVESTMENTS LIMITED

By: ________________________

Name: KUNG Yiu Fai

Title:

DAQING LONGHEDA FOOD COMPANY

LIMITED

By: ________________________

Name: Jinglin Shi

Title: Chief Executive Officer

Only as to Section 4.7 herein:

KUNG YIU FAI

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK -- SIGNATURE PAGES FOR INVESTORS FOLLOW]

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

NAME OF INVESTOR

By: ________________________

Name:

Title:

Investment Amount: $                                                    

Tax ID No.:

ADDRESS FOR NOTICE

c/o:

Street:

City/State/Post code:

Attention:

Tel:

Fax:

DELIVERY INSTRUCTIONS

(if different from above)

c/o:

Street:

City/State/Post code:

Attention:

Tel:

EX-10.2

Exhibit 10.2

MAKE GOOD ESCROW AGREEMENT

This Make Good Escrow Agreement (the "Make Good Agreement"), dated effective as of August 14, 2008, is entered into by and among Fashion Tech International, Inc., a Nevada corporation (the “Company”), KUNG Yiu Fai (the “Make Good Pledgor”), WLT Brothers Capital, Inc., as Investor agent (“Investor Agent”) and Securities Transfer Corporation, as escrow agent (“Escrow Agent”).

WHEREAS, each of the investors in the private offering of securities of the Company (the "Investors") has entered into a Securities Purchase Agreement, dated the date of this Agreement (the "Securities Purchase Agreement"), evidencing their participation in the Company's private offering (the "Offering") of securities.  As an inducement to the Investors to participate in the Offering and as set forth in the Securities Purchase Agreement, the Make Good Pledgor has agreed to place certain shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) owned by them into escrow for the benefit of the Investors in the event the Company fails to satisfy certain financial thresholds.

WHEREAS, pursuant to the requirements of the Stock Purchase Agreement, the Company and Make Good Pledgor have agreed to establish an escrow on the terms and conditions set forth in this Make Good Agreement;

WHEREAS, the Escrow Agent has agreed to act as escrow agent pursuant to the terms and conditions of this Make Good Agreement; and

WHEREAS, all capitalized terms used but not defined herein which are defined in the Securities Purchase Agreement shall have the respective meanings given to such terms in the Securities Purchase Agreement;

NOW, THEREFORE, in consideration of the mutual promises of the parties and the terms and conditions hereof, the parties hereby agree as follows:

1. Appointment of Escrow Agent. The Make Good Pledgor and the Company hereby appoint Escrow Agent to act as Escrow Agent in accordance with the terms and conditions set forth in this Make Good Agreement, and Escrow Agent hereby accepts such appointment and agrees to act as Escrow Agent in accordance with such terms and conditions.

2. Establishment of Escrow.  Within three Trading Days following the Closing, the Make Good Pledgor shall deliver, or cause to be delivered, to the Escrow Agent certificates evidencing an aggregate of 1,800,261shares of the Company’s Common Stock (the "Escrow Shares"), along with stock powers executed in blank (or such other signed instrument of transfer acceptable to the Company’s Transfer Agent).  As used in this Make Good Agreement, “Transfer Agent” means Securities Transfer Corporation, or such other entity hereafter retained by the Company as its stock transfer agent as specified in a writing from the Company to the Escrow Agent.  The Make Good Pledgor understand and agree that the Investors’ right to receive 2009 Make Good Shares (as defined below) and 2010 Make Good Shares (as defined below) pursuant to Section 4.7 of the Securities Purchase Agreement and this Make Good Agreement shall continue to run to the benefit of each Investor even if such Investor shall have transferred or sold all or any portion of the Shares it acquired under the Securities Purchase Agreement, and that each Investor shall have the right to assign its rights to rece ive all or any such 2009 Make Good Shares and 2010 Make Good Shares to other Persons in conjunction with negotiated sales or transfers of any of its Shares.  The Make Good Pledgor hereby irrevocably agrees that, other than in accordance with Section 4.7 of the Securities Purchase Agreement and this Make Good Agreement, the Make Good Pledgor will not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, or announce the offering of any of the Escrow Shares (including any securities convertible into, or exchangeable for, or representing the rights to receive Escrow Shares).  In furtherance thereof, the Company will (x) place a stop order on all Escrow Shares which shall expire on the date the Escrow Shares are delivered to the Investors or returned to the Make Good Pledgor, (y) notify the Transfer Agent in writing of the stop ord er and the restrictions on such Escrow Shares under this Make Good Agreement and direct the Transfer Agent not to process any attempts by any Make Good Pledgor to resell or transfer any Escrow Shares before the date the Escrow Shares that should be delivered to the Investors are delivered to the Investors or returned to the Make Good Pledgor, or otherwise in violation of Section 4.7 of the Securities Purchase Agreement and this Make Good Agreement.  The Company shall notify the Investors as soon as the 2009 Make Good Shares and 2010 Make Good Shares have been deposited with the Escrow Agent.

3. Representations of Make Good Pledgor.  The Make Good Pledgor (as to itself and its Escrowed Shares) hereby represents and warrants to the Investors as follows:

(i) All of the Escrow Shares are validly issued, fully paid and nonassessable shares of the Company, and free and clear of all Liens.  Upon any transfer of Escrow Shares to Investors hereunder, Investors will receive full right, title and authority to such shares as holders of Common Stock of the Company free and clear of all liens other than those imposed by US Federal Securities laws.

(ii) Performance of this Make Good Agreement and compliance with the provisions hereof will not violate any provision of any applicable law and will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any Lien upon any of the properties or assets of Make Good Pledgor pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon Make Good Pledgor or such properties or assets, other than such breaches, defaults or Liens which would not have a material adverse effect taken as a whole.

(iii) The Make Good Pledgor has carefully considered and understands its obligations and rights under Section 4.7 of the Securities Purchase Agreement and this Make Good Agreement, and in furtherance thereof (x) has consulted with its legal and other advisors with respect thereto and (y) hereby forever waives and agrees that it may not assert any equitable defenses in any Proceeding involving the Escrow Shares.

2

4. Disbursement of Escrow Shares.

a.

In the event that the After Tax Net Income (as defined below) reported in the Annual Report of the Company for the fiscal year ending March 31, 2009, as filed with the Commission on Form 10-K (or such other form appropriate for such purpose as promulgated by the Commission) (the “2009 Annual Report”) is less than $13,919,707 (the “2009 Guaranteed ATNI”), the Escrow Agent (on behalf of the Make Good Pledgor) will, without any further action on the part of the Investors, transfer a number of 2009 Make Good Shares (as calculated below) to the Investors on a pro rata basis (determined by dividing each Investor’s Investment Amount by the aggregate of all Investment Amounts delivered to the Company by the Investors under the Securities Purchase Agreement) as specified in Exhibit A to this Agreement for no consideration other than payment of their respective Investment Amount paid to the Company at Closing.  The “2009 Make Good Shares” means a number of shares of Common Stock equal to 50% of the Aggregate Shares issued pursuant to the Securities Purchase Agreement (as equitably adjusted for any stock splits, stock combinations, stock dividends or similar transactions).  The number of 2009 Make Good Shares issuable to Investors shall be equal to:

[(2009 Guaranteed ATNI – actual After Tax Net Income of the Company for the fiscal year ended March 31, 2009)/2009 Guaranteed ATNI]*aggregate number of 2009 Make Good Shares

In the event that the After Tax Net Income (as defined below) reported in the Annual Report of the Company for the fiscal year ending March 31, 2010, as filed with the Commission on Form 10-K (or such other form appropriate for such purpose as promulgated by the Commission) (the “2010 Annual Report”) is less than $18,495,315 (the “2010 Guaranteed ATNI”), the Escrow Agent (on behalf of the Make Good Pledgor) will, without any further action on the part of the Investors, transfer a number of 2010 Make Good Shares (as calculated below) to the Investors on a pro rata basis (determined by dividing each Investor’s Investment Amount by the aggregate of all Investment Amounts delivered to the Company by the Investors under the Securities Purchase Agreement) as specified in Exhibit A to this Agreement for no consideration other than payment of their respective Investment Amount paid to the Company at Closing.  The “2010 Make Good Shares” means a number of shares of Common Stock equal to 50% of the Aggregate Shares issued pursuant to the Securities Purchase Agreement (as equitably adjusted for any stock splits, stock combinations, stock dividends or similar transactions).  The number of 2010 Make Good Shares issuable to Investors shall be equal to:

[(2010 Guaranteed ATNI – actual After Tax Net Income of the Company for the fiscal year ended March 31, 2010)/2010 Guaranteed ATNI]*aggregate number of 2010 Make Good Shares

For purposes hereof, “After Tax Net Income” shall mean the Company’s operating income after taxes for the fiscal year ending March 31, 2009 or March 31, 2010 (as applicable) in each case determined in accordance with GAAP as reported in the 2009 Annual Report or 2010 Annual Report (as applicable).  Notwithstanding the foregoing or anything else to the contrary herein, for purposes of determining whether or not the 2009 Guaranteed ATNI and 2010 Guaranteed ATNI have been met, (i) expenses incurred as a result of the Company's fulfillment of its obligations under Section 4.8 of the Securities Purchase Agreement shall be excluded (i.e., costs for hiring the independent directors (including compensation for such independent directors and costs for director’s and officer’s insurance coverage in an amount and scope that is customary for a company of the Company’s size and nature) and hiring of the investor relations firm); (ii) the release of any of the 2009 Make Good Shares and/or 2010 Make Good Shares to the Make Good Pledgor as a result of the operation of this Section 4 shall not be deemed to be an expense, charge, or any other deduction from revenues even though GAAP may require contrary treatment or the Annual Report for the respective fiscal years filed with the Commission by the Company may report otherwise; and (iii) expenses (including interests and fees) incurred as a result of the issuance of debt for an amount no greater than the difference between $20 million and the aggregate Investment Amount should be excluded.   Other than as set forth in this Section 4, no other exclusions shall be made for any non-recurring expenses of the Company in determining whether any of the 2009 Guaranteed ATNI or 2010 Guaranteed ATNI have been achieved.  

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If prior to the second anniversary of the filing of either of the 2009 Annual Report or the 2010 Annual Report (as applicable), the Company or their auditors report or recognize that the financial statements contained in such report are subject to amendment or restatement such that the Company would recognize or report adjusted After Tax Net Income of less than either of the 2009 Guarantee ATNI or the 2010 Guaranteed ATNI (as applicable), then notwithstanding any prior return of 2009 Make Good Shares or 2010 Make Good Shares to the Make Good Pledgor, the Make Good Pledgor will, within 10 Business Days following the earlier of the filing of such amendment or restatement or recognition, deliver the relevant 2009 Make Good Shares or 2010 Make Good Shares to the Investors without any further action on the part of the Investors.

In the event that the After Tax Net Income reported in the 2009 Annual Report is equal to or greater than the 2009 Guaranteed ATNI, no transfer of the 2009 Make Good Shares shall be required by the Make Good Pledgor to the Investors under this Section and such 2009 Make Good Shares shall be returned to the Make Good Pledgor in accordance with this Make Good Agreement.  In the event that the After Tax Net Income reported in the 2010 Annual Report is equal to or greater than the 2010 Guaranteed ATNI, no transfer of the 2010 Make Good Shares shall be required by the Make Good Pledgor to the Investors under this Section and such 2010 Make Good Shares shall be returned to the Make Good Pledgor in accordance with the Make Good Agreement, subject to return as provided in the immediately preceding sentence.  

Any transfer of the 2009 Make Good Shares and the 2010 Make Good Shares under this Section shall be made to the Investors or the Make Good Pledgor, as applicable, within 10 Business Days after the date which the 2009 Annual Report or 2010 Annual Report, as applicable, is filed with the Commission and otherwise in accordance with this Make Good Agreement subject to return as provided in the immediately preceding paragraph and, in the event that any of the 2009 Make Good Shares or 2010 Make Good Shares are required to be distributed to the Investors in accordance with the terms of this Agreement, the Escrow Agent will deliver such shares to the Investors in accordance with Exhibit A.  The Investor Agent will deliver to the Escrow Agent (with a copy to the Company) a copy of the 2009 Annual Report and 2010 Annual Report, together with the calculation of whether the 200 9 Guaranteed ATNI or 2010 Guaranteed ATNI (as applicable) has been achieved.  Escrow Agent need only rely on such letters from Investor Agent and will disregard any contrary or further calculations or instructions in such regard delivered by or on behalf of the Company.  

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b.

Pursuant to Section 4(a), if the Investor Agent delivers a notice to the Escrow Agent that the Escrow Shares are to be transferred to the Investors, then the Escrow Agent shall immediately forward either the 2009 Make Good Shares or 2010 Make Good Shares, as the case may be, to the Company’s Transfer Agent for reissuance to the Investors in an amount to each Investor as set forth on Exhibit A attached hereto and otherwise in accordance with this Make Good Agreement. The Company covenants and agrees that upon any transfer of 2009 Make Good Shares or 2010 Make Good Shares to the Investors in accordance with this Make Good Agreement, the Company shall promptly instruct its Transfer Agent to reissue such 2009 Make Good Shares or 2010 Make Good Shares in the applicable Investor’s name and deliver the same, or cause the same to be delivered as directed by such Investor in an amount to each Investor as set forth on Exhibit A attached hereto.  If the Company does not promp tly provide such instructions to the Transfer Agent of the Company, then the Investor Agent is hereby irrevocably authorized and directed by the Company to give such re-issuance instruction to the Transfer Agent of the Company.  If a notice from the Investor Agent pursuant to Section 4(a) indicates that the Escrow Shares are to be returned to the Make Good Pledgor, then the Escrow Agent will promptly deliver either the 2009 Make Good Shares or 2010 Make Good Shares, as the case may be, to the Make Good Pledgor in accordance with instructions provided by the Make Good Pledgor at such time.

c.

The Company and Make Good Pledgor covenant and agree to provide the Escrow Agent with certified tax identification numbers by furnishing appropriate forms W-9 or W-8 and such other forms and documents that the Escrow Agent may request, including appropriate W-9 or W-8 forms for each Investor.  The Company, Make Good Pledgor and the Investors understand that if such tax reporting documentation is not provided and certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder, to withhold a portion of any interest or other income earned on the investment of the Escrow Property.

5. Notice of Filings.  The Company agrees to promptly provide the Investor Agent written notice of the filing with the Commission of any financial statements or reports referenced herein.

6. Escrow Shares.  If any Escrow Shares are deliverable to the Investors in accordance with this Make Good Agreement, (i) Make Good Pledgor covenants and agrees to execute all such instruments of transfer (including stock powers and assignment documents) as are customarily executed to evidence and consummate the transfer of the Escrow Shares from Make Good Pledgor to the Investors, to the extent not done so in accordance with Section 2, and (ii) following its receipt of the documents referenced in Section 6(i), the Company and Escrow Agent covenant and agree to cooperate with the Transfer Agent so that the Transfer Agent may promptly reissue such Escrow Shares in the applicable Investor’s name and delivers the same as provided herein or otherwise directed in writing by the applicable Investors.  Until such time as (if at all) the Escrow Shares are required to be delivered pursuant to the Securities Purchase Agreement and in accordance with this Make Goo d Agreement, (i) any dividends payable in respect of the Escrow Shares and all voting rights applicable to the Escrow Shares shall be retained by Make Good Pledgor and (ii) should the Escrow Agent receive dividends or voting materials, such items shall not be held by the Escrow Agent, but shall be passed immediately on to the Make Good Pledgor and shall not be invested or held for any time longer than is needed to effectively re-route such items to the Make Good Pledgor.  In the event that the Escrow Agent receives a communication requiring the conversion of the Escrow Shares to cash or the exchange of the Escrow Shares for that of an acquiring company, the Escrow Agent shall solicit and follow the written instructions of the Make Good Pledgor; provided, that the cash or exchanged shares are instructed to be redeposited into the Escrow Account.  Make Good Pledgor shall be responsible for all taxes resulting from any such conversion or exchange.

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Assuming the Make Good Pledgor provides good and valid title to the Escrow Shares to be transferred and delivered on behalf of the Make Good Pledgor to the Investors hereunder, free and clear of all liens, encumbrances, equities or claims, the Escrow Agent will ensure that upon delivery of the Escrow Shares, good and valid title to the Escrow Shares, free and clear of all liens, encumbrances, equities or claims will pass to the Investors.   The Escrow Agent shall not take any action which could impair Investors’ rights in the Escrow Shares.  The Escrow Agent shall not sell, transfer, assign or otherwise dispose of (by operation of law or otherwise) or grant any option with respect to any Escrow Shares prior to the termination of this Agreement.

7. Interpleader. Should any controversy arise among the parties hereto with respect to this Make Good Agreement or with respect to the right to receive the Escrow Shares, Escrow Agent and/or the Investor Agent shall have the right to consult and hire counsel and/or to institute an appropriate interpleader action to determine the rights of the parties. Escrow Agent and/or the Investor Agent are also each hereby authorized to institute an appropriate interpleader action upon receipt of a written letter of direction executed by the parties so directing either Escrow Agent or the Investor Agent. If Escrow Agent or the Investor Agent is directed to institute an appropriate interpleader action, it shall institute such action not prior to thirty (30) days after receipt of such letter of direction and not later than sixty (60) days after such date. Any interpleader action instituted in accordance with this Section 7 shall be filed in any court of competent jurisdiction in the State of New York, and the Escrow Shares in dispute shall be deposited with the court and in such event Escrow Agent and the Investor Agent shall be relieved of and discharged from any and all obligations and liabilities under and pursuant to this Make Good Agreement with respect to the Escrow Shares and any other obligations hereunder.

8. Exculpation and Indemnification of Escrow Agent and the Investor Agent.

a.

Escrow Agent is not a party to, and is not bound by or charged with notice of any agreement out of which this escrow may arise.  Escrow Agent acts under this Make Good Agreement as a depositary only and is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of the subject matter of the escrow, or any part thereof, or for the form or execution of any notice given by any other party hereunder, or for the identity or authority of any person executing any such notice. Escrow Agent will have no duties or responsibilities other than those expressly set forth herein.  Escrow Agent will be under no liability to anyone by reason of any failure on the part of any party hereto (other than Escrow Agent) or any maker, endorser or other signatory of any document to perform such person's or entity's obligations hereunder or under any such document.  Except for this Make Good Agreement and instructions to Escrow Agent pursuant to the term s of this Make Good Agreement, Escrow Agent will not be obligated to recognize any agreement between or among any or all of the persons or entities referred to herein, notwithstanding its knowledge thereof.  The Investor Agent’s sole obligation under this Make Good Agreement is to provide written instruction to Escrow Agent (following such time as the Company files certain periodic financial reports as specified in Section 4 hereof) directing the distribution of the Escrow Shares.  The Investor Agent will provide such written instructions upon review of the relevant After Tax Net Income amount reported in such periodic financial reports as specified in Section 4 hereof.  The Investor Agent is not charged with any obligation to conduct any investigation into the financial reports or make any other investigation related thereto.  In the event of any actual or alleged mistake or fraud of the Company, its auditors or any other person in connection with such financial reports of the Compa ny, the Investor Agent shall have no obligation or liability to any party hereunder.

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b.

Escrow Agent will not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted, absent gross negligence or willful misconduct.  Escrow Agent may rely conclusively on, and will be protected in acting upon, any order, notice, demand, certificate, or opinion or advice of counsel (including counsel chosen by Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is reasonably believed by Escrow Agent to be genuine and to be signed or presented by the proper person or persons.  The duties and responsibilities of the Escrow Agent hereunder shall be determined solely by the express provisions of this Make Good Agreement and no other or further duties or responsibilities shall be implied, including, but not limited to, any obligation under or imposed by any la ws of the State of New York upon fiduciaries.  THE ESCROW AGENT SHALL NOT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (I) DAMAGES, LOSSES OR EXPENSES ARISING OUT OF THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES, LOSSES OR EXPENSES WHICH HAVE BEEN FINALLY ADJUDICATED TO HAVE DIRECTLY RESULTED FROM THE ESCROW AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (II) SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR LOSSES OF ANY KIND WHATSOEVER (INCLUDING, WITHOUT LIMITATION, LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.

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c.

The Company and each Make Good Pledgor each hereby, jointly and severally, indemnify and hold harmless each of Escrow Agent, the Investor Agent and any of their principals, partners, agents, employees and affiliates from and against any expenses, including reasonable attorneys' fees and disbursements, damages or losses suffered by Escrow Agent or the Investor Agent in connection with any claim or demand, which, in any way, directly or indirectly, arises out of or relates to this Make Good Agreement or the services of Escrow Agent or the Investor Agent hereunder; except, that if Escrow Agent or the Investor Agent is guilty of willful misconduct or gross negligence under this Make Good Agreement, then Escrow Agent or the Investor Agent, as the case may be, will bear all losses, damages and expenses arising as a result of its own willful misconduct or gross negligence.  Promptly after the receipt by Escrow Agent or the Investor Agent of notice of any such demand or claim or the commen cement of any action, suit or proceeding relating to such demand or claim, Escrow Agent or the Investor Agent, as the case may be, will notify the other parties hereto in writing.  For the purposes hereof, the terms "expense" and "loss" will include all amounts paid or payable to satisfy any such claim or demand, or in settlement of any such claim, demand, action, suit or proceeding settled with the express written consent of the parties hereto, and all costs and expenses, including, but not limited to, reasonable attorneys' fees and disbursements, paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding.  The provisions of this Section 8 shall survive the termination of this Make Good Agreement, and the resignation or removal of the Escrow Agent.

9. Compensation of Escrow Agent.  Escrow Agent shall be entitled to compensation for its services as stated in the fee schedule attached hereto as Exhibit B, which compensation shall be paid by the Company. The fee agreed upon for the services rendered hereunder is intended as full compensation for Escrow Agent's services as contemplated by this Make Good Agreement; provided, however, that in the event that Escrow Agent renders any material service not contemplated in this Make Good Agreement, or there is any assignment of interest in the subject matter of this Make Good Agreement, or any material modification hereof, or if any material controversy arises hereunder, or Escrow Agent is made a party to any litigation pertaining to this Make Good Agreement, or the subject matter hereof, then Escrow Agent shall be reasonably compensated by the Company for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorney's fees, occasioned by any delay, controversy, litigation or event, and the same shall be recoverable from the Company.  Prior to incurring any costs and/or expenses in connection with the foregoing sentence, Escrow Agent shall be required to provide written notice to the Company of such costs and/or expenses and the relevancy thereof and Escrow Agent shall not be permitted to incur any such costs and/or expenses which are not related to litigation prior to receiving written approval from the Company, which approval shall not be unreasonably withheld.

10. Resignation of Escrow Agent.  At any time, upon ten (10) Business Days' written notice to the Company and the Investors, Escrow Agent may resign and be discharged from its duties as Escrow Agent hereunder. As soon as practicable after its resignation, Escrow Agent will promptly turn over to a successor escrow agent appointed by the Company the Escrow Shares held hereunder upon presentation of a document appointing the new escrow agent and evidencing its acceptance thereof.  If, by the end of the 10-Business Day period following the giving of notice of resignation by Escrow Agent, the Company shall have failed to appoint a successor escrow agent, Escrow Agent shall deposit the Escrow Shares as directed by the Investor Agent with the understanding that such Escrow Shares will continue to be subject to the provisions of this Make Good Agreement.

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11. Records.  Escrow Agent shall maintain accurate records of all transactions hereunder.  Promptly after the termination of this Make Good Agreement or as may reasonably be requested by the parties hereto from time to time before such termination, Escrow Agent shall provide the parties hereto, as the case may be, with a complete copy of such records, certified by Escrow Agent to be a complete and accurate account of all such transactions.  The authorized representatives of each of the parties hereto shall have access to such books and records at all reasonable times during normal business hours upon reasonable notice to Escrow Agent and at the requesting party’s expense.

12. Notice.  All notices, communications and instructions required or desired to be given under this Make Good Agreement must be in writing and shall be deemed to be duly given if sent by registered or certified mail, return receipt requested, or overnight courier, to the addresses listed on the signature pages hereto.

13. Execution in Counterparts.  This Make Good Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

14. Assignment and Modification.  This Make Good Agreement and the rights and obligations hereunder of the Company may be assigned by the Company only following the prior written consent of the Investor Agent. This Make Good Agreement and the rights and obligations hereunder of the Escrow Agent may be assigned by the Escrow Agent only with the prior consent of the Company and the Investor Agent.  This Make Good Agreement and the rights and obligations hereunder of the Make Good Pledgor may not be assigned by any Make Good Pledgor.  Subject to the requirements under federal and state securities laws, an Investor may assign its rights under this Make Good Agreement without any consent from any other party. This Make Good Agreement may not be changed orally or modified, amended or supplemented without an express written agreement executed by the Escrow Agent, the Company, the Make Good Pledgor and the Investor Agent.  This Make Good Agreement is bindi ng upon and intended to be for the sole benefit of the parties hereto and their respective successors, heirs and permitted assigns, and none of the provisions of this Make Good Agreement are intended to be, nor shall they be construed to be, for the benefit of any third person, except for the Investors under the Securities Purchase Agreement.  No portion of the Escrow Shares shall be subject to interference or control by any creditor of any party hereto, or be subject to being taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any such party hereto prior to the disbursement thereof to such party hereto in accordance with the provisions of this Make Good Agreement.

15. Applicable Law.  This Make Good Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York. The representations and warranties contained in this Make Good Agreement shall survive the execution and delivery hereof and any investigations made by any party. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Make Good Agreement shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any such proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court , or that such proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Make Good Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

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16. Headings.  The headings contained in this Make Good Agreement are for convenience of reference only and shall not affect the construction of this Make Good Agreement.

17. Attorneys' Fees.  If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Make Good Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees from the other party (unless such other party is the Escrow Agent), which fees may be set by the court in the trial of such action or may be enforced in a separate action brought for that purpose, and which fees shall be in addition to any other relief that may be awarded.

18. Merger or Consolidation.  Any corporation or association into which the Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer all or substantially all of its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which the Escrow Agent is a party, shall be and become the successor escrow agent under this Make Good Agreement and shall have and succeed to the rights, powers, duties, immunities and privileges as its predecessor, without the execution or filing of any instrument or paper or the performance of any further act.

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have duly executed this Make Good Agreement as of the date set forth opposite their respective names.

COMPANY:

FASHION TECH INTERNATIONAL, INC.

By: /s/ Jinlin Shi                           

Name: Jinlin Shi

Title:   Chief Executive Officer

Address: Daqing LongHeDa Food Co., Ltd.

No. 2 Wenhua Street

Dongfeng New Village, Daqing

Heilongjiang, China 163311

Facsimile: (86) 459-4609488

Attn.: Chief Executive Officer

MAKE GOOD PLEDGOR:

KUNG YIU FAI

/s/ Kung Yiu Fai                               

Address:

Flat 7, 16/F, Block 45, Heng Fa Chuen,

Chai Wan, Hong Kong

Facsimile:  

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK -

 SIGNATURE PAGE FOR OTHER PARTIES FOLLOWS]

 

ESCROW AGENT:

Securities Transfer Corporation, as Escrow Agent

By:_/s/ Kevin Halter, Jr.________________

Name: Kevin Halter, Jr.

Title: President

Address: 2591 Dallas Parkway, Suite 102, Frisco, TX 75034

Facsimile:  

Attn.: Kevin B. Halter, Jr.

INVESTOR AGENT

WLT Brothers Capital, Inc., as Investor Agent

By: /s/  James H. Groh

Name:  James H. Groh

Title:  President and CEO

Address:

Facsimile:  

Attn.:

EX-10.3

Exhibit 10.3

MAKE GOOD ESCROW AGREEMENT

This Make Good Escrow Agreement (the "Make Good Agreement"), dated effective as of August 14, 2008, is entered into by and among Fashion Tech International, Inc., a Nevada corporation (the “Company”), KUNG Yiu Fai (the “Make Good Pledgor”), HFG International, Limited (“HFG”) and Securities Transfer Corporation, as escrow agent (“Escrow Agent”).

WHEREAS, the Make Good Pledgor has agreed to place certain shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) owned by him into escrow for the benefit of HFG in the event the Company fails to satisfy certain financial thresholds.

WHEREAS, the Escrow Agent has agreed to act as escrow agent pursuant to the terms and conditions of this Make Good Agreement; and

WHEREAS, all capitalized terms used but not defined herein which are defined in the Securities Purchase Agreement shall have the respective meanings given to such terms in the Securities Purchase Agreement;

NOW, THEREFORE, in consideration of the mutual promises of the parties and the terms and conditions hereof, the parties hereby agree as follows:

1. Appointment of Escrow Agent. The Make Good Pledgor and the Company hereby appoint Escrow Agent to act as Escrow Agent in accordance with the terms and conditions set forth in this Make Good Agreement, and Escrow Agent hereby accepts such appointment and agrees to act as Escrow Agent in accordance with such terms and conditions.

2. Establishment of Escrow.  Within three business days of the execution of this Agreement by the Make Good Pledgor, the Make Good Pledgor shall deliver, or cause to be delivered, to the Escrow Agent certificates evidencing an aggregate of 2,513,758 shares of the Company’s Common Stock (the "Escrow Shares"), along with stock powers executed in blank (or such other signed instrument of transfer acceptable to the Company’s Transfer Agent).  As used in this Make Good Agreement, “Transfer Agent” means Securities Transfer Corporation, or such other entity hereafter retained by the Company as its stock transfer agent as specified in a writing from the Company to the Escrow Agent.  The Make Good Pledgor understands and agrees that HFG shall have the right to assign its rights to receive all or any such 2009 Make Good Shares and 2010 Make Good Shares to other persons.  The Make Good Pledgor hereby irrevocably agrees that he will not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, or announce the offering of any of t he Escrow Shares (including any securities convertible into, or exchangeable for, or representing the rights to receive Escrow Shares).  In furtherance thereof, the Company will (x) place a stop order on all Escrow Shares which shall expire on the date the Escrow Shares are delivered to HFG or returned to the Make Good Pledgor, (y) notify the Transfer Agent in writing of the stop order and the restrictions on such Escrow Shares under this Make Good Agreement and direct the Transfer Agent not to process any attempts by any Make Good Pledgor to resell or transfer any Escrow Shares before the date the Escrow Shares that should be delivered to HFG are delivered to HFG or returned to the Make Good Pledgor, or otherwise in violation of this Make Good Agreement.  The Company shall notify HFG as soon as the 2009 Make Good Shares and 2010 Make Good Shares have been deposited with the Escrow Agent.

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3. Representations of Make Good Pledgor.  The Make Good Pledgor (as to itself and its Escrowed Shares) hereby represents and warrants to HFG as follows:

(i) All of the Escrow Shares are validly issued, fully paid and nonassessable shares of the Company, and free and clear of all Liens.  Upon any transfer of Escrow Shares to HFG hereunder, HFG will receive full right, title and authority to such shares as holders of Common Stock of the Company free and clear of all liens other than those imposed by US Federal Securities laws.

(ii) Performance of this Make Good Agreement and compliance with the provisions hereof will not violate any provision of any applicable law and will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any Lien upon any of the properties or assets of Make Good Pledgor pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon Make Good Pledgor or such properties or assets, other than such breaches, defaults or Liens which would not have a material adverse effect taken as a whole.

(iii) The Make Good Pledgor has carefully considered and understands its obligations and rights under this Make Good Agreement, and in furtherance thereof (x) has consulted with its legal and other advisors with respect thereto and (y) hereby forever waives and agrees that it may not assert any equitable defenses in any Proceeding involving the Escrow Shares.

4. Disbursement of Escrow Shares.

a.

In the event that the After Tax Net Income (as defined below) reported in the Annual Report of the Company for the fiscal year ending March 31, 2009, as filed with the Commission on Form 10-K (or such other form appropriate for such purpose as promulgated by the Commission) (the “2009 Annual Report”) is less than $13,919,707 (the “2009 Guaranteed ATNI”), the Escrow Agent (on behalf of the Make Good Pledgor) will, without any further action on the part of HFG, transfer a number of 2009 Make Good Shares (as calculated below) to HFG for no consideration.  The “2009 Make Good Shares” means 1,256,879 shares of the Company’s common stock (as equitably adjusted for any stock splits, stock combinations, stock dividends or similar transactions).  The number of 2009 Make Good Shares issuable to HFG shall be equal to:

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[(2009 Guaranteed ATNI – actual After Tax Net Income of the Company for the fiscal year ended March 31, 2009)/2009 Guaranteed ATNI]*aggregate number of 2009 Make Good Shares  

In the event that the After Tax Net Income (as defined below) reported in the Annual Report of the Company for the fiscal year ending March 31, 2010, as filed with the Commission on Form 10-K (or such other form appropriate for such purpose as promulgated by the Commission) (the “2010 Annual Report”) is less than $18,495,315 (the “2010 Guaranteed ATNI”), the Escrow Agent (on behalf of the Make Good Pledgor) will, without any further action on the part of HFG, transfer a number of 2010 Make Good Shares (as calculated below) to HFG for no consideration.  The “2010 Make Good Shares” means 1,256,879 shares of the Company’s common stock (as equitably adjusted for any stock splits, stock combinations, stock dividends or similar transactions).  The number of 2010 Make Good Shares issuable to HFG shall be equal to:

[(2010 Guaranteed ATNI – actual After Tax Net Income of the Company for the fiscal year ended March 31, 2010)/2010 Guaranteed ATNI]*aggregate number of 2010 Make Good Shares  

For purposes hereof, “After Tax Net Income” shall mean the Company’s operating income after taxes for the fiscal year ending March 31, 2009 or March 31, 2010 (as applicable) in each case determined in accordance with GAAP as reported in the 2009 Annual Report or 2010 Annual Report (as applicable).  Notwithstanding the foregoing or anything else to the contrary herein, for purposes of determining whether or not the 2009 Guaranteed ATNI and 2010 Guaranteed ATNI have been met, (i) expenses incurred as a result of the Company's fulfillment of its obligations under Section 4.8 of the Securities Purchase Agreement shall be excluded (i.e., costs for hiring the independent directors (including compensation for such independent directors and costs for director’s and officer’s insurance coverage in an amount and scope that is customary for a company of the Company’s size and nature) and hiring of the investor relations firm); (ii) the release of any of the 2009 Make Good Shares and/or 2010 Make Good Shares to the Make Good Pledgor as a result of the operation of this Section 4 shall not be deemed to be an expense, charge, or any other deduction from revenues even though GAAP may require contrary treatment or the Annual Report for the respective fiscal years filed with the Commission by the Company may report otherwise; and (iii) expenses (including interests and fees) incurred as a result of the issuance of debt for an amount no greater than the difference between $20 million and the aggregate Investment Amount should be excluded.   Other than as set forth in this Section 4, no other exclusions shall be made for any non-recurring expenses of the Company in determining whether any of the 2009 Guaranteed ATNI or 2010 Guaranteed ATNI have been achieved.  

If prior to the second anniversary of the filing of either of the 2009 Annual Report or the 2010 Annual Report (as applicable), the Company or their auditors report or recognize that the financial statements contained in such report are subject to amendment or restatement such that the Company would recognize or report adjusted After Tax Net Income of less than either of the 2009 Guarantee ATNI or the 2010 Guaranteed ATNI (as applicable), then notwithstanding any prior return of 2009 Make Good Shares or 2010 Make Good Shares to the Make Good Pledgor, the Make Good Pledgor will, within 10 Business Days following the earlier of the filing of such amendment or restatement or recognition, deliver the relevant 2009 Make Good Shares or 2010 Make Good Shares to HFG without any further action on the part of HFG.  

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In the event that the After Tax Net Income reported in the 2009 Annual Report is equal to or greater than the 2009 Guaranteed ATNI, no transfer of the 2009 Make Good Shares shall be required by the Make Good Pledgor to HFG under this Section and such 2009 Make Good Shares shall be returned to the Make Good Pledgor in accordance with this Make Good Agreement.  In the event that the After Tax Net Income reported in the 2010 Annual Report is equal to or greater than the 2010 Guaranteed ATNI, no transfer of the 2010 Make Good Shares shall be required by the Make Good Pledgor to HFG under this Section and such 2010 Make Good Shares shall be returned to the Make Good Pledgor in accordance with the Make Good Agreement, subject to return as provided in the immediately preceding sentence.  

Any transfer of the 2009 Make Good Shares and the 2010 Make Good Shares under this Section shall be made to HFG or the Make Good Pledgor, as applicable, within 10 Business Days after the date which the 2009 Annual Report or 2010 Annual Report, as applicable, is filed with the Commission and otherwise in accordance with this Make Good Agreement subject to return as provided in the immediately preceding paragraph and, in the event that any of the 2009 Make Good Shares or 2010 Make Good Shares are required to be distributed to HFG in accordance with the terms of this Agreement, the Escrow Agent will deliver such shares to HFG.  HFG will deliver to the Escrow Agent (with a copy to the Company) a copy of the 2009 Annual Report and 2010 Annual Report, together with the calculation of whether the 2009 Guaranteed ATNI or 2010 Guaranteed ATNI (as applicable) has been achieved .  Escrow Agent need only rely on such letters from HFG and will disregard any contrary or further calculations or instructions in such regard delivered by or on behalf of the Company.  

b.

Pursuant to Section 4(a), if HFG delivers a notice to the Escrow Agent that the Escrow Shares are to be transferred to HFG, then the Escrow Agent shall immediately forward either the 2009 Make Good Shares or 2010 Make Good Shares, as the case may be, to the Company’s Transfer Agent for reissuance to HFG in accordance with this Make Good Agreement. The Company covenants and agrees that upon any transfer of 2009 Make Good Shares or 2010 Make Good Shares to HFG in accordance with this Make Good Agreement, the Company shall promptly instruct its Transfer Agent to reissue such 2009 Make Good Shares or 2010 Make Good Shares to HFG.  If the Company does not promptly provide such instructions to the Transfer Agent of the Company, then HFG is hereby irrevocably authorized and directed by the Company to give such re-issuance instruction to the Transfer Agent of the Company.  If a notice from HFG pursuant to Section 4(a) indicates that the Escrow Shares are to be returned to the Make Good Pledgor, then the Escrow Agent will promptly deliver either the 2009 Make Good Shares or 2010 Make Good Shares, as the case may be, to the Make Good Pledgor in accordance with instructions provided by the Make Good Pledgor at such time.

c.

The Company and Make Good Pledgor covenant and agree to provide the Escrow Agent with certified tax identification numbers by furnishing appropriate forms W-9 or W-8 and such other forms and documents that the Escrow Agent may request, including appropriate W-9 or W-8 forms for HFG.  The Company, Make Good Pledgor and HFG understand that if such tax reporting documentation is not provided and certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder, to withhold a portion of any interest or other income earned on the investment of the Escrow Property.

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5. Notice of Filings.  The Company agrees to promptly provide HFG written notice of the filing with the Commission of any financial statements or reports referenced herein.

6. Escrow Shares.  If any Escrow Shares are deliverable to HFG in accordance with this Make Good Agreement, (i) Make Good Pledgor covenants and agrees to execute all such instruments of transfer (including stock powers and assignment documents) as are customarily executed to evidence and consummate the transfer of the Escrow Shares from Make Good Pledgor to HFG, to the extent not done so in accordance with Section 2, and (ii) following its receipt of the documents referenced in Section 6(i), the Company and Escrow Agent covenant and agree to cooperate with the Transfer Agent so that the Transfer Agent may promptly reissue such Escrow Shares in the name of HFG or as  otherwise directed in writing by HFG.  Until such time as (if at all) the Escrow Shares are required to be delivered in accordance with this Make Good Agreement, (i) any dividends payable in respect of the Escrow Shares and all voting rights applicable to the Escrow Shares shall be retained by Make Good Pledgor and (ii) should the Escrow Agent receive dividends or voting materials, such items shall not be held by the Escrow Agent, but shall be passed immediately on to the Make Good Pledgor and shall not be invested or held for any time longer than is needed to effectively re-route such items to the Make Good Pledgor.  In the event that the Escrow Agent receives a communication requiring the conversion of the Escrow Shares to cash or the exchange of the Escrow Shares for that of an acquiring company, the Escrow Agent shall solicit and follow the written instructions of the Make Good Pledgor; provided, that the cash or exchanged shares are instructed to be redeposited into the Escrow Account.  Make Good Pledgor shall be responsible for all taxes resulting from any such conversion or exchange.

Assuming the Make Good Pledgor provides good and valid title to the Escrow Shares to be transferred and delivered on behalf of the Make Good Pledgor to HFG hereunder, free and clear of all liens, encumbrances, equities or claims, the Escrow Agent will ensure that upon delivery of the Escrow Shares, good and valid title to the Escrow Shares, free and clear of all liens, encumbrances, equities or claims will pass to HFG.   The Escrow Agent shall not take any action which could impair HFG’s rights in the Escrow Shares.  The Escrow Agent shall not sell, transfer, assign or otherwise dispose of (by operation of law or otherwise) or grant any option with respect to any Escrow Shares prior to the termination of this Agreement.

7. Interpleader.  Should any controversy arise among the parties hereto with respect to this Make Good Agreement or with respect to the right to receive the Escrow Shares, Escrow Agent shall have the right to consult and hire counsel and/or to institute an appropriate interpleader action to determine the rights of the parties. Escrow Agent is hereby authorized to institute an appropriate interpleader action upon receipt of a written letter of direction executed by the parties so directing Escrow Agent. If Escrow Agent is directed to institute an appropriate interpleader action, it shall institute such action not prior to thirty (30) days after receipt of such letter of direction and not later than sixty (60) days after such date. Any interpleader action instituted in accordance with this Section 7 shall be filed in any court of competent jurisdiction in the State of New York, and the Escrow Shares in dispute shall be deposited with the cou rt and in such event Escrow Agent shall be relieved of and discharged from any and all obligations and liabilities under and pursuant to this Make Good Agreement with respect to the Escrow Shares and any other obligations hereunder.

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8. Exculpation and Indemnification of Escrow Agent.

a.

Escrow Agent is not a party to, and is not bound by or charged with notice of any agreement out of which this escrow may arise.  Escrow Agent acts under this Make Good Agreement as a depositary only and is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of the subject matter of the escrow, or any part thereof, or for the form or execution of any notice given by any other party hereunder, or for the identity or authority of any person executing any such notice. Escrow Agent will have no duties or responsibilities other than those expressly set forth herein.  Escrow Agent will be under no liability to anyone by reason of any failure on the part of any party hereto (other than Escrow Agent) or any maker, endorser or other signatory of any document to perform such person's or entity's obligations hereunder or under any such document.  Except for this Make Good Agreement and instructions to Escrow Agent pursuant to the term s of this Make Good Agreement, Escrow Agent will not be obligated to recognize any agreement between or among any or all of the persons or entities referred to herein, notwithstanding its knowledge thereof.  

b.

Escrow Agent will not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted, absent gross negligence or willful misconduct.  Escrow Agent may rely conclusively on, and will be protected in acting upon, any order, notice, demand, certificate, or opinion or advice of counsel (including counsel chosen by Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is reasonably believed by Escrow Agent to be genuine and to be signed or presented by the proper person or persons.  The duties and responsibilities of the Escrow Agent hereunder shall be determined solely by the express provisions of this Make Good Agreement and no other or further duties or responsibilities shall be implied, including, but not limited to, any obligation under or imposed by any la ws of the State of New York upon fiduciaries.  THE ESCROW AGENT SHALL NOT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (I) DAMAGES, LOSSES OR EXPENSES ARISING OUT OF THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES, LOSSES OR EXPENSES WHICH HAVE BEEN FINALLY ADJUDICATED TO HAVE DIRECTLY RESULTED FROM THE ESCROW AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (II) SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR LOSSES OF ANY KIND WHATSOEVER (INCLUDING, WITHOUT LIMITATION, LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.

6

c.

The Company and each Make Good Pledgor each hereby, jointly and severally, indemnify and hold harmless Escrow Agent, and any of its principals, partners, agents, employees and affiliates from and against any expenses, including reasonable attorneys' fees and disbursements, damages or losses suffered by Escrow Agent in connection with any claim or demand, which, in any way, directly or indirectly, arises out of or relates to this Make Good Agreement or the services of Escrow Agent hereunder; except, that if Escrow Agent is guilty of willful misconduct or gross negligence under this Make Good Agreement, then Escrow Agent, as the case may be, will bear all losses, damages and expenses arising as a result of its own willful misconduct or gross negligence.  Promptly after the receipt by Escrow Agent of notice of any such demand or claim or the commencement of any action, suit or proceeding relating to such demand or claim, Escrow Agent will notify the other parties hereto in writing. &n bsp;For the purposes hereof, the terms "expense" and "loss" will include all amounts paid or payable to satisfy any such claim or demand, or in settlement of any such claim, demand, action, suit or proceeding settled with the express written consent of the parties hereto, and all costs and expenses, including, but not limited to, reasonable attorneys' fees and disbursements, paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding.  The provisions of this Section 8 shall survive the termination of this Make Good Agreement, and the resignation or removal of the Escrow Agent.

9. Compensation of Escrow Agent.  Escrow Agent shall be entitled to compensation for its services as stated in the fee schedule attached hereto as Exhibit A, which compensation shall be paid by the Company. The fee agreed upon for the services rendered hereunder is intended as full compensation for Escrow Agent's services as contemplated by this Make Good Agreement; provided, however, that in the event that Escrow Agent renders any material service not contemplated in this Make Good Agreement, or there is any assignment of interest in the subject matter of this Make Good Agreement, or any material modification hereof, or if any material controversy arises hereunder, or Escrow Agent is made a party to any litigation pertaining to this Make Good Agreement, or the subject matter hereof, then Escrow Agent shall be reasonably compensated by the Company for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorney's fees, occasioned by any delay, controversy, litigation or event, and the same shall be recoverable from the Company.  Prior to incurring any costs and/or expenses in connection with the foregoing sentence, Escrow Agent shall be required to provide written notice to the Company of such costs and/or expenses and the relevancy thereof and Escrow Agent shall not be permitted to incur any such costs and/or expenses which are not related to litigation prior to receiving written approval from the Company, which approval shall not be unreasonably withheld.

10. Resignation of Escrow Agent.  At any time, upon ten (10) Business Days' written notice to the Company and HFG, Escrow Agent may resign and be discharged from its duties as Escrow Agent hereunder. As soon as practicable after its resignation, Escrow Agent will promptly turn over to a successor escrow agent appointed by the Company the Escrow Shares held hereunder upon presentation of a document appointing the new escrow agent and evidencing its acceptance thereof.  If, by the end of the 10-Business Day period following the giving of notice of resignation by Escrow Agent, the Company shall have failed to appoint a successor escrow agent, Escrow Agent shall deposit the Escrow Shares as directed by HFG with the understanding that such Escrow Shares will continue to be subject to the provisions of this Make Good Agreement.

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11. Records.  Escrow Agent shall maintain accurate records of all transactions hereunder.  Promptly after the termination of this Make Good Agreement or as may reasonably be requested by the parties hereto from time to time before such termination, Escrow Agent shall provide the parties hereto, as the case may be, with a complete copy of such records, certified by Escrow Agent to be a complete and accurate account of all such transactions.  The authorized representatives of each of the parties hereto shall have access to such books and records at all reasonable times during normal business hours upon reasonable notice to Escrow Agent and at the requesting party’s expense.

12. Notice.  All notices, communications and instructions required or desired to be given under this Make Good Agreement must be in writing and shall be deemed to be duly given if sent by registered or certified mail, return receipt requested, or overnight courier, to the addresses listed on the signature pages hereto.

13. Execution in Counterparts.  This Make Good Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

14. Assignment and Modification.  This Make Good Agreement and the rights and obligations hereunder of the Company may be assigned by the Company only following the prior written consent of HFG. This Make Good Agreement and the rights and obligations hereunder of the Escrow Agent may be assigned by the Escrow Agent only with the prior consent of the Company and HFG.  This Make Good Agreement and the rights and obligations hereunder of the Make Good Pledgor may not be assigned by any Make Good Pledgor.  Subject to the requirements under federal and state securities laws, HFG may assign its rights under this Make Good Agreement without any consent from any other party. This Make Good Agreement may not be changed orally or modified, amended or supplemented without an express written agreement executed by the Escrow Agent, the Company, the Make Good Pledgor and HFG.  This Make Good Agreement is binding upon and intended to be for the sole benefit of th e parties hereto and their respective successors, heirs and permitted assigns, and none of the provisions of this Make Good Agreement are intended to be, nor shall they be construed to be, for the benefit of any third person.  No portion of the Escrow Shares shall be subject to interference or control by any creditor of any party hereto, or be subject to being taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any such party hereto prior to the disbursement thereof to such party hereto in accordance with the provisions of this Make Good Agreement.

15. Applicable Law.  This Make Good Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York. The representations and warranties contained in this Make Good Agreement shall survive the execution and delivery hereof and any investigations made by any party. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Make Good Agreement shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any such proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court , or that such proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Make Good Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

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16. Headings.  The headings contained in this Make Good Agreement are for convenience of reference only and shall not affect the construction of this Make Good Agreement.

17. Attorneys' Fees.  If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Make Good Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees from the other party (unless such other party is the Escrow Agent), which fees may be set by the court in the trial of such action or may be enforced in a separate action brought for that purpose, and which fees shall be in addition to any other relief that may be awarded.

18. Merger or Consolidation.  Any corporation or association into which the Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer all or substantially all of its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which the Escrow Agent is a party, shall be and become the successor escrow agent under this Make Good Agreement and shall have and succeed to the rights, powers, duties, immunities and privileges as its predecessor, without the execution or filing of any instrument or paper or the performance of any further act.

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

9

IN WITNESS WHEREOF, the parties have duly executed this Make Good Agreement as of the date set forth opposite their respective names.

COMPANY:
FASHION TECH INTERNATIONAL, INC.
By: /s/ Jinglin Shi
Name: Jinglin Shi
Title:	Chief Executive Officer
Address:	Daqing LongHeDa Food Co., Ltd.
	No. 2 Wenhua Street
	Dongfeng New Village, Daqing
	Heilongjiang, China 163311
Facsimile: (86) 459-4609488
Attn.: Chief Executive Officer
MAKE GOOD PLEDGOR:
KUNG YIU FAI
/s/ Kung Yiu Fai
Address:
Flat 7, 16/F, Block 45, Heng Fa Chuen,
Chai Wan, Hong Kong
Facsimile:

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK -

 SIGNATURE PAGE FOR OTHER PARTIES FOLLOWS]

ESCROW AGENT:

Securities Transfer Corporation, as Escrow Agent

By: /s/ Kevin Halter, Jr.                                                    

Name: Kevin Halter, Jr.

Title: President

Address: 2591 Dallas Parkway, Suite 102,

                 Frisco, TX 75034

Facsimile:

Attn.: Kevin B. Halter, Jr.

HFG

HFG International, Limited

By: /s/ Timothy P. Halter                                                 

Name: Timothy P. Halter

Title: President

Address: c/o Halter Financial Group

4965 Preston Park Blvd. Suite 250

Plano, Texas 75093

Facsimile: 972.985.4014

Attn.: Timothy P. Halter

EX-10.4

Exhibit 10.4

HOLDBACK ESCROW AGREEMENT

This Holdback Escrow Agreement, dated as of August 14, 2008 (this “Agreement”), is entered into by and among Fashion Tech International, Inc., a Nevada corporation, and all predecessors thereof (collectively, the “Company”), WLT Brothers Capital, Inc., as Investor agent (the “Investor Agent”), and Securities Transfer Corporation (the “Escrow Agent”).

WITNESSETH:

WHEREAS, the Company proposes to make a private offering to the Investors (the “Offering”) of the Company’s common stock, par value $0.001 per share pursuant to that certain Securities Purchase Agreement, dated as of the date hereof, by and among the Company, the Investors and certain other parties signatory thereto (the “Securities Purchase Agreement”) (capitalized terms used but not otherwise defined herein which are defined in the Securities Purchase Agreement shall have the respective meanings given to such terms in the Securities Purchase Agreement);

WHEREAS, pursuant to the Securities Purchase Agreement and the Closing Escrow Agreement, the Company has agreed that an aggregate of $450,000 of the aggregate Investment Amounts paid by Investors to the escrow account established in accordance with the Closing Escrow Agreement (the “Escrowed Funds”), will be deposited at Closing with the Escrow Agent, to continue to be held in escrow, administered and distributed as described in Section 4.8 of the Securities Purchase Agreement and in accordance with Section 3 of this Agreement; and

WHEREAS, as a material inducement for the Investors to enter into the Securities Purchase Agreement and consummate the Closing, the Company and Escrow Agent have agreed to enter into this Agreement.

NOW, THEREFORE, in consideration of the mutual promises herein contained and intending to be legally bound, the parties hereby agree as follows:

1.

Appointment of Escrow Agent. The Company hereby appoints Escrow Agent to act as escrow agent in accordance with the terms of this Agreement, and the Escrow Agent hereby accepts such appointment.

2.

Delivery of the Escrowed Funds.

The Company hereby directs that the Escrowed Funds be delivered simultaneously with the Closing to the Escrow Agent’s account (the “Escrow Account”) as follows:

1

Bank Name:

Nexity Bank

ABA #:

062006330 

Credit to:

Vision Bank – Texas

Account #:

2000001897

For the benefit of:

Securities Transfer Corporation account “K”

Account #:

201558

Escrowed Funds:

$450,000

3.

Escrow Agent to Hold and Disburse Escrowed Funds. Promptly following the Closing, the Escrow Agent will provide written notice to the Company (for simultaneous distribution to the Investor Agent) that the Escrow Agent has received the entire amount of Escrowed Funds in the Escrow Account.  The Escrow Agent will hold and disburse the Escrowed Funds received by it pursuant to the terms of this Agreement, as follows:   

3.1

EX-10.5

Exhibit 10.5

ESCROW AGREEMENT

ESCROW AGREEMENT, dated August 14, 2008 (this “Agreement”), by and among Fashion Tech International, Inc., a Nevada corporation (the “Company”), each of the investors that are purchasing Shares and are identified below (collectively, the “Investors”), WLT BROTHERS CAPITAL, INC. as Placement Agent (the “Placement Agent”) and THELEN REID BROWN RAYSMAN & STEINER LLP (hereinafter referred to as “Escrow Agent”).  All capitalized terms used but not defined herein shall have the meanings assigned them in the Securities Purchase Agreement (as hereinafter defined).

BACKGROUND

The Company, through the Placement Agent, proposes to make a private offering pursuant to the Securities Act of 1933, as amended, of up to $20,000,000 of Shares on a “best efforts” basis at $2.78 per Share pursuant to a Securities Purchase Agreement being entered into among the Company and the Investors on the date hereof (the “Securities Purchase Agreement”).

The Company and the Placement Agent desire to deposit all proceeds received from subscriptions for the Shares (the “Escrow Deposit”) with the Escrow Agent, to be held in escrow until joint written instructions are received by the Escrow Agent from the Company and the Placement Agent, from time to time, at which time the Escrow Agent will disburse the Escrow Deposit in accordance with the instructions at a Closing.

The Escrow Agent is willing to hold the Escrow Deposit in escrow subject to the terms and conditions of this Agreement.

AGREEMENT

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1.

Appointment of Escrow Agent; Establishment of Escrow Account.

(a)

The Investors and the Company each hereby appoint the Escrow Agent as escrow agent and the Escrow Agent accepts that appointment and agrees to hold and dispose of the Escrow Deposit in accordance with the terms of this Agreement.  The Escrow Agent acknowledges receipt of fair and reasonable consideration for its services.

(b)

The Placement Agent and/or the Company will direct the Investors to deliver the Escrow Deposit to the Escrow Agent, addressed to the following account (the “Escrow Account”) of the Escrow Agent:

Citibank, N.A.

666 Fifth Avenue, New York, NY 10103

Acct No. 53505184

Acct Name: Thelen Reid Brown Raysman & Steiner LLP - IOLTA Account

ABA No: 021-000-089

Swift Code: CitiUS33

Reference: Daqing Longheda (061735-000002)

2.

Release of the Escrow Deposit.

(a)

On the Outside Date, the Escrow Agent shall promptly release the Escrow Deposit to the Investors in such amounts as were deposited by each Investor with the Escrow Agent if the Closing (as defined in the Securities Purchase Agreement) has not occurred.  The Escrow Agent shall release the Escrow Deposit to the Investors upon receipt from the Investors of written instructions to that effect, which instructions shall be provided at the sole discretion of the Investors.  Neither the Company nor any affiliate of the Company shall deliver any notice to the Escrow Agent that conflicts in any way with the written instructions of the Investors hereunder and the Escrow Agent shall be permitted to ignore any such conflicting notice.  The Escrow Agent shall return the Escrow Deposit to the Investors promptly following receipt by the Escrow Agent of such Investors instructions and may rely on such written instructions from the Investors even if such written instructions are contrary to anyth ing contained in this Agreement or in the Securities Purchase Agreement.

(b)

On or before the Outside Date, the Escrow Agent shall promptly release the Escrow Deposit in accordance with a funds flow memorandum containing joint written instructions signed by the Company and the Placement Agent if the Closing (as defined in the Securities Purchase Agreement) has occurred.

(c)

Notwithstanding any other provision of this Agreement, if at any time the Escrow Agent shall receive from the Company and the Investors (prior to being directed to take action by a court) joint written instructions as to the delivery of the Escrow Deposit or any portion thereof, the Escrow Agent shall deliver the Escrow Deposit in accordance with such joint written instructions.

3.

Interpleader.  The Escrow Agent may at any time commence an action in the nature of interpleader or other legal proceedings and may deposit the Escrow Deposit with the clerk of the court.  In the event of any dispute regarding who is entitled to the Escrow Deposit at any time, the Escrow Agent may determine not to release the Escrow Deposit to either any Investor or the Company and may commence an interpleader action as aforesaid or may cause the Escrow Deposit to be deposited with a court of competent jurisdiction whereupon it shall cease to have any further obligation hereunder.  Upon any delivery or deposit of the Escrow Deposit as provided in this Section 3, the Escrow Agent shall be released and discharged from any further obligation under this Agreement.

4.

Concerning the Escrow Agent

(a)

The Escrow Agent shall not have any liability to any of the parties to this Agreement or to any third party arising out of its services as Escrow Agent under this Agreement, except for damages directly resulting from the Escrow Agent's gross negligence or willful misconduct.  

(b)

The Company and the Investors jointly and severally shall indemnify the Escrow Agent and hold it harmless against any loss, liability, damage or expense (including reasonable attorneys' fees) that the Escrow Agent may incur as a result of acting as escrow agent under this Agreement, except for any loss, liability, damage or expense arising from its own gross negligence or willful misconduct.  As between the Company and the Investors, such obligations shall be borne equally by the Company and the Investors.  For this purpose, the term "attorneys' fees" includes fees payable to any counsel retained by the Escrow Agent in connection with its services under this Agreement and, with respect to any matter arising under this Agreement as to which the Escrow Agent performs legal services, if and to the extent that the Escrow Agent itself is a law firm, its standard hourly rates and charges then in effect.

(c)

The Escrow Agent shall be entitled to rely upon any judgment, notice, instrument or other writing delivered to it under this Agreement without being required to determine the authenticity of, or the correctness of any fact stated in, that document and irrespective of any facts the Escrow Agent may know or be deemed to know in any other capacity.  The Escrow Agent may act in reliance upon any instrument or signature believed by it to be genuine and may assume that any person purporting to give any notice or receipt or advice or make any statement or execute any document in connection with this Agreement has been duly authorized to do so.

(d)

The Escrow Agent shall have no duties or responsibilities except those expressly set forth in this Agreement.  The Escrow Agent shall not have any obligations arising out of or be bound by the provisions of any other agreement, written or oral, including, but not limited to, the Securities Purchase Agreement.

(e)

All of the Escrow Agent's rights of indemnification provided for in this Agreement shall survive the resignation of the Escrow Agent, its replacement by a successor Escrow Agent, its delivery or deposit of the Escrow Deposit in accordance with this Agreement, the termination of this Agreement, and any other event that occurs after this date.

(f)

The Escrow Agent shall have no responsibility with respect to the sufficiency of the arrangements contemplated by this Agreement to accomplish the intentions of the parties.

(g)

The Investors and the Placement Agent acknowledge that they know that the Escrow Agent has represented the Company in connection with the Securities Purchase Agreement and this Agreement and that it may continue to represent the Company in that connection and in connection with the transactions contemplated by those agreements, including, but not limited to, in connection with any disputes that may arise under either of those agreements.  The Escrow Agent shall not be precluded from or restricted from representing the Company or any of its affiliates or otherwise acting as attorneys for the Company or any of its affiliates in any matter, including, but not limited to, any court proceeding or other matter related to the Securities Purchase Agreement, this Agreement or the transactions contemplated by the Securities Purchase Agreement, or this Agreement or the Escrow Deposit, whether or not there is a dispute between the Investors and the Company with respect to any such matter.  The I nvestors and the Placement Agent irrevocably consent to any such representation and waive any conflict or appearance of conflict with respect to any such representation.

5.

Representations.  Each Investor and the Company each represents and warrants to the Escrow Agent that each has full power and authority to enter into and perform this Agreement; that this Agreement was duly authorized by all necessary corporate or other action; and that this Agreement is enforceable against each party in accordance with its terms.

6.

Resignation; Successor Escrow Agent.  The Escrow Agent (and any successor escrow agent) may at any time resign as such upon 30 days prior notice to each of the other parties.  Upon receipt of a notice of resignation, each of the other parties shall use their best efforts to select a successor agent within 15 days, but if within that 15-day period the Escrow Agent has not received a notice signed by both of them appointing a successor escrow agent and setting forth its name and address, the Escrow Agent may (but shall not be obligated to) select on their behalf a bank or trust company to act as successor escrow agent, for such compensation as that bank or trust company customarily charges and on such terms and conditions not inconsistent with this Agreement as that bank or trust company reasonably requires.  The fees and charges of any successor escrow agent shall be payable out of the Purchase Price.  A successor escrow agent selected by the resign ing Escrow Agent may become the Escrow Agent by confirming in writing its acceptance of the position.  The Investors and the Company shall sign such other documents as the successor escrow agent reasonably requests in connection with its appointment.

7.

Notices.  All notices, instructions, objections or other communications under this Agreement shall be in writing and shall be deemed given when sent by United States registered mail, return receipt requested, to the respective parties at the addresses specified on the signature page hereto.

8.

Miscellaneous.

(a)

The Company and the Investors shall jointly and severally pay to the Escrow Agent on demand all costs and expenses, including, without limitation, the costs of any interpleader or similar action, incurred by the Escrow Agent in performing its services under this Agreement.  As between the Company and the Investors, such obligations shall be borne equally by the Company and the Investors.

(b)

If any provision of this Agreement is determined by any court of competent jurisdiction to be invalid or unenforceable in any jurisdiction, the remaining provisions of this Agreement shall not be affected thereby, and the invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable that provision in any other jurisdiction.  It is understood, however, that the parties intend each provision of this Agreement to be valid and enforceable and each of them waives all rights to object to any provision of this Agreement.

(c)

This Agreement shall be binding upon and inure solely to the benefit of the parties and their respective successors and permitted assigns and shall not be enforceable by or inure to the benefit of any third party.  No party may assign its rights or obligations under this Agreement or any interest in the Escrow Deposit without the written consent of the other parties unless otherwise specified herein, and any other purported assignment shall be void.  In no event shall the Escrow Agent be required to act upon or be bound by any notice, instruction, objection or other communication given by a person other than, nor shall the Escrow Agent be required to deliver the Escrow Deposit to any person other than, the Company or the Investors.

(d)

This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in New York.

(e)

The courts of the State of New York and the United States District Courts for New York shall have exclusive jurisdiction over the parties (and the subject matter) with respect to any dispute or controversy arising under or in connection with this Agreement.  A summons or complaint or other process in any such action or proceeding served by mail in accordance with the notice provisions of this Agreement or in such other manner as may be permitted by law shall be valid and sufficient service.

(f)

This Agreement contains a complete statement of all of the arrangements among the parties with respect to its subject matter and cannot be changed or terminated orally.  Any waiver must be in writing.

(g)

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.  Facsimile execution and delivery of this Agreement is legal, valid and binding for all purposes.

(h)

The section headings used herein are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

(i)

This Agreement is being executed both in English and in a foreign language.  If any ambiguity or vagueness arises between the English language version and the foreign language version or if there is any inconsistency or conflict between the two versions, the English language version will control.

[Signature Page Follows]

IN WITNESS WHEREOF, the respective parties have executed this Agreement as of the date first above written.

INVESTOR:

___________________________________

(Name)

By: ________________________________

Name:

Title:

Address:

Fax:

FASHION TECH INTERNATIONAL, INC

By: ______________________

Name: Jinlin Shi

Title:   Chief Executive Officer

Address:

Daqing LongHeDa Food Co., Ltd.

No. 2 Wenhua Street

Dongfeng New Village, Daqing

Heilongjiang, China 163311

Fax:

(86) 459-4609488

THELEN REID BROWN RAYSMAN &

STEINER LLP

By: ______________________

Name: Louis A. Bevilacqua

Title: Partner

Address:

701 Eighth Street, NW

Washington, DC  20001

Fax:

+1 202-654-1804

 

[Signature Page to Escrow Agreement]

WLT BROTHERS CAPITAL, INC.

By: ______________________

Name: Mr. James Groh

Title: President

Address:

Fax:

 

[Signature Page to Escrow Agreement]

EX-10.6

Exhibit 10.6

(English Summary)

MEMORANDUM OF UNDERSTANDING

For the purchase of golden berry, the Company has respectively signed a document in the nature of Memorandum of Understanding (hereinafter referred to as “MOU”) concerning cooperation with Gonghe Town Government in Hailun County, QiQihaer City on 20 March 2008 and the Changfa Town Government in Nehe County, QiQihaer City on 26 March 2008. The content thereof is summarized as follows:

Parties

Daqing LongHeDa Food Co., Ltd (the “Company”); and

XX Government (the “Government”)

Through both Parties’ negotiation and for the purpose of facilitating the golden berry business, the Company will purchase golden berries from farmers (the “Seller”) in the villages within the Government’s administrative territory.

I.

Product, Amount, and Protective Price:

The product is golden berry; the amount is 20,000 tons; the protective price for the product is RMB 1.8 Yuan / Kg; in case where the market price is higher than the protective price, the Company may choose not to purchase any products or to purchase the golden berries at the market price and the Sellers may choose to sell the products to third parties.

II.

Inspection and Quality Standards:

The products should be ripe golden berries, not perished or spoiled, no unripe berries (acceptable if unripe berries account for less than 10% of the total, ripe berries mean berries that start to turn yellow and are about 60-70% ripe.), no frost damage or pest damage.

III.

Amount, Time and Place:

The Company shall purchase qualified golden berries (on shelf for more than two days with dry skin) at any time since the first harvest of golden berries. The purchase place shall be at the Company’s location.

IV.

Payment Method:

The Company shall pay the Sellers cash based on the purchase amount.

V.

The Sellers shall guarantee the quality of the products, and shall not replace the first-grade products with second-grade products; otherwise the losses arising from the Company’s refusal to purchase shall be solely borne by the Sellers.

VI.

Disclaimer:

No Party shall be liable for failure to perform its obligations where such failure is a result of force majeure including hail or flood or animal or human damage.

VII. Dispute Resolution:

The Parties shall solve their disputes through amicable negotiation. If no settlement is reached, the parties may resort to arbitration or bring the disputes to proper court.  

VIII.

Term:

This Contract shall be valid from the execution date to the accomplishment date of the purchase in a given year.

Execution:

Daqing Long He Da Food Co., Ltd  

XX Government (the “Government”)

Date:

EX-10.7

 

Exhibit 10.7

(English Summary)

Distribution Contract

Ref:____________

Execution Date_______

Execution Place_______

Party A: Daqing LongHeDa Food Co., Ltd

Party B: the distributor

I. Terms of the Contract:

After Party A’s observation and confirmation of Party B’s qualification to be a distributor for sales of Party A’s products, Party A hereby authorizes Party B to be the general distributor within the territory of ___________, during the period starts from _________to __________.

II. Distribution Mode

The distribution mode is agency in different territories.

III. Products and Amount

Fruit Puree____ tons; Glazed Fruit___ tons; “Fu” Beverage____ tons, Concentrated Juice ____tons.

IV. Payment Method:

(usually payment upon delivery)

V. Transportation and Freight:

Party B shall be responsible for the transportation and freight and Party A shall be responsible for liaison of transportation.

VI. Rights and Obligations

Party A’s rights and obligations:

1.

Party A shall provide Party B with copies of Party A’s business license and sanitation license.

2.

In case when the product price needs to be adjusted due to changes in state policy, fluctuation in raw material supply or change of market situation, Party A shall give written notice to Party B one month prior to such adjustment. Such notice shall be made part of the Contract as an exhibit.

3.

Party A shall timely notify Party B of the change of Party A’s sales policy and/or supply situation.

4.

Party A shall be responsible for any loss due to product quality problem, which shall be certified by relevant organization; Party B shall be liable for losses due to its negligent custody of the products.

5.

The quality of the sample shall be used as quality standard for all deliveries.

6.

Party A shall be responsible for delivering the products to designated places on time as agreed, but shall not be responsible for delivery to any other places.

7.

Party A shall have the rights to supervise, examine and guide Party B’s sales of its products.

Party B’s rights and obligations:

1.

Party B shall provide to Party A with copies of Party B’s business license and taxation registration certificates for record.

2.

Party B shall not be allowed to sell the same products from any other manufacturer at the same time during the term of this Contract.   

3.

Party B shall place an order with Party A at least 15 days prior to the required delivery date to ensure that Party A has sufficient time to arrange the delivery.

4.

Party B shall not (1) distribute the products beyond the territory as stated herein; (2) assign the rights of distribution without Party A’s consent; (3) provide non-conforming products; and (4) violate Party A’s price policy. Party A shall be entitled to terminate this Contract if Party B breaches and the losses arising thereof shall be borne by Party B.   

VII.  Inspection

Party B shall inspect the products in accordance with the delivery note provided by Party A and shall record the delivery date on the Client Return Receipt attached to the Product Sales Note and confirm the foresaid by signature or company stamp.

VIII. Liabilities for Breach of Contract

1.

With respect to matters that have not been contemplated by the Contract, both Parties shall consult each other and negotiate for settlement. Any agreement reached as a result of such negotiation shall be legally binding and has the same legal effect as the Contract.

2.

If either party breaches the Contract, the parties shall negotiation for settlement. If no agreement can be reached through such negotiation, any claim shall be brought to the non-breaching Party’s local court with proper jurisdiction.

IX. Miscellaneous Items

1.

Any issue not being contemplated in this Contract shall be negotiated by both Parties and the results of both Parties’ negotiation shall be an addendum to this Contract and have the same legal effect as this Contact.  

2.

Any dispute arising from the Contact shall be amicably negotiated by both Parties and in case where no agreement is reached by the Parties, the dispute shall be brought to Party A’s local court with proper jurisdiction.

3.

This Contract is prepared in two originals, which have the same legal effect, and each Party shall hold one original.

Execution:

Party A: Daqing Long He Da Food Co., Ltd

Address:

Legal representative:

Authorized representative:

Bank Info.:

Telephone:

Fax:

Party B: the distributor

Address:

Legal representative:

Authorized representative:

Bank Info.:

Telephone:

Fax:

The form of purchase order is as follows:

Purchase Order

Products	Specification	Amount(ton)	Unit Price (Yuan)	Total Sum (Yuan)	Remarks
In Total
Total Sum (in capital letter):

Client: _____________________

Address: ____________________

Designated Place for Delivery:______________

Telephone:___________________

Liaison Person: _______________

                                                    Client:                                       (Stamp)                                         

                                                    Date: _______________

The contractual details of the Company’s top 10 sales clients in March 2008 are as follows:

Distributors	Contract Reference	Execution Date	Contract Term	Territory	Products Type and Amount
Beijing Hua Peng Yuan Food Co.,Ltd	LHD-2008054	2008-1-22	2008-01-01 to 2008-12-31	Beijing	preserved fruit: 650 tons; concentrated juice: 1200 tons
Beijing Tai Hua Xing Food Co.,Ltd	LHD-2008052	2008-1-19	2008-01-01 to 2008-12-31	Area around Beijing	concentrated juice: 1200 tons
Shanxi De Sheng Trading Co.,Ltd	LHD-2008035	2008-1-9	2008-01-01 to 2008-12-31	Yuncheng City,Shanxi Province	fruit puree: 500 tons; concentrated juice: 1000 tons
Haerbin Sheng Jin Lai Economic and Technology Development Co.,Ltd	LHD-2008004	2007-12-22	2008-01-01 to 2008-12-31	Haerbin City, Heilongjiang Province	fruit puree: 1000 tons
Tianjin Ao Kai Chemistry and Industry Trading Co.,Ltd	LHD-2008049	2008-1-16	2008-01-01 to 2008-12-31	Tianjin City	concentrated juice: 600 tons
Chengde Ya Long Food Co.,Ltd	LHD-2008057	2008-1-24	2008-01-01 to 2008-12-31	Chengde City, Hebei Province	fruit puree: 1500 tons
Guangzhou Hui Huang Shop	LHD-2008036	2008-1-9	2008-01-01 to 2008-12-31	Guangzhou City, Guangdong Province	preserved fruit: 50 tons
Sanmenxia Jin Ge Rui Juice Co., Ltd	LHD-2008026	2007-12-31	2008-01-01 to 2008-12-31	Sanmenxia City, Henan Province	fruit puree: 1000 tons
Qingzhou Zi Yu Food Co.,Ltd	LHD-2008007	2007-12-25	2008-01-01 to 2008-12-31	Qingzhou City, Shandong Province	fruit puree: 800tons; preserved fruit: 100tons
(no. 10)

EX-10.8

Exhibit 10.8

(English Summary)

Trademark License Agreement

Licensor: Mr. Yu Changjun

ID Number: 23028119720924043X

Licensee: the Company

Registered Address: No.3 Industry Area, High-Tech Zone, Daqing City, Heilongjiang

Telephone: 0459-4609466

Whereas,       

Licensor has applied to the Trademark Office for registration of such trademark and has passed the initial examination on 13 March 2008; the trademark will be publicized on the Official Gazette on 14 June 2008.

In accordance with Article 40 of PRC Trademark Law and Article 43 of the Implementation Rules of the PRC Trademark Law, the Parties, through amicable negotiation, entered into this Agreement on 16 May, 2008 at Daqing Heilongjiang, PRC with regard to the trademark license issues:

I. The Trademark To Be Licensed: “农珍之冠”  

II. Specimen of the Trademark: (provided by the Assignor and certified with his seal)

III. Application/Register Number: 4894199

Country of Registry: PRC

IV. Effective Term of the Trademark: from 14 June 2008 to 13 June 2018;

V. Class of Goods:

Licensor shall grant the license to Licensee for using the Trademark on goods in class 29.

VI. Condition Precedent of the License:

The Trademark is registered and a registration certificate is obtained; the Licensor warrants that it is the lawful owner of the Trademark.

VII. License Term:

From June 14, 2008 to the date when the Trademark Office approves the assignment of ownership applied by the parties.  

VIII. Type of License: Exclusive License

IX. License Fees: the Trademark is licensed to the Company for RMB one yuan.

X. Rights and Obligations of the Parties:

1.

Licensee shall be entitled to exclusively use the Trademark under the Agreement;

2.

Licensor has right to supervise the quality of the Licensee’s products bearing the Trademark, and the Licensee shall guarantee the quality of such products;

3.

Licensee shall mark its company name and product origin on its products;

4.

Licensee shall not change the wording, image, or the combination thereof, of the Trademark, and nor shall it use the Trademark beyond the registered class for the Trademark;

5.

Without authorization of the Licensor, the Licensee shall not license the Trademark to any third party.

XI. Breach of Agreement:

The breaching party shall be liable to any damages caused to the non-breaching party.

XII. Dispute Resolution:

Any dispute arising out of the Agreement shall be amicably negotiated between the Parties. If no settlement is reach by such negotiation, either Party is entitled to bring the dispute to the court with proper jurisdiction.  

XIII. Miscellaneous:

The Agreement will be executed in five counterparts which are equally binding. The Licensee shall file the Agreement with the Trademark Office after the execution date of the Agreement.

Execution:

Licensor: Yu Changjun

Signature:

Licensee: the Company

Authorized Representative: Shi Jinglin

Date: 16 May 2008

EX-10.9

Exhibit 10.9

(English Summary)

Trademark License Agreement

Licensor: Mr. Yu Changjun

ID Number: 23028119720924043X

Licensee: the Company

Registered Address: No.3 Industry Area, High-Tech Zone, Daqing City, Heilongjiang

Telephone: 0459-4609466

Whereas,       

In accordance with Article 40 of PRC Trademark Law and Article 43 of the Implementation Rules of the PRC Trademark Law, the Parties through amicable negotiation entered into this Agreement on 16 May, 2008 at Daqing Heilongjiang, PRC concerning the trademark license issues:  

I. The Trademark To Be Licensed: “农珍之冠”

II. Specimen of the Trademark: (provided by the Assignor and certified with his seal)

III. Application/Register Number: 4772633

Country of Registry: PRC

IV. Effective Term of the Trademark: from 7 April 2008 to 6 April 2018  

V. Class of Goods:

Licensor shall grant the license to Licensee for using the Trademark on goods in class 32.

VI. License Term:

From April 7 2008 to the date when the Trademark Office approves the assignment of ownership applied by the parties.  

VII. Type of License: Exclusive License

VIII. License Fees: the Trademark is licensed to the Company for RMB one yuan.

IX. Rights and Obligations of the Parties:

1.

Licensee shall be entitled to exclusively use the Trademark under the Agreement;

2.

Licensor has right to supervise the quality of the Licensee’s products bearing the Trademark, and the Licensee shall guarantee the quality of such products;

3.

Licensee shall mark its company name and product origin on its products bearing the Trademark;

4.

Licensee shall not change the wording, image, or the combination thereof, of the Trademark, and nor shall it use the Trademark beyond the registered class for the Trademark;

5.

Without authorization of the Licensor, the Licensee shall not license the Trademark to any third party;

6.

The Licensor shall warrant that it is the legal registrant of the Trademark.

X. Breach of Agreement:

The breaching party shall be liable to any damages caused to the non-breaching party.

XI. Dispute Resolution:

Any dispute arising out of the Agreement shall be amicably negotiated between the Parties. If no settlement is reach by such negotiation, either Party is entitled to bring the dispute to the court with proper jurisdiction.  

XII. Miscellaneous:

The Agreement will be executed in five counterparts which are equally binding. The Licensee shall file the Agreement with the Trademark Office after the execution date of the Agreement.

Execution:

Licensor: Yu Changjun

Signature:

Licensee: the Company

Authorized Representative: Shi Jinglin

Date: 16 May 2008

EX-10.10

Exhibit 10.10

(English Summary)

Technology Cooperation Agreement

Date: 7 March 2008

Contractual Parties:

Party A: College of Food of Heilongjiang Ba Yi Land Reclamation University

Party B: Daqing Long He Da Food Co., Ltd

With regard to research for extracting rare fruits and relevant manufacturing technology, both Parties agree as follows through negotiation:

I.

Party A’s responsibilities:

1.

Upon Party B’s requirement, Party A shall conduct research on extracting beneficial materials from rare fruits, such as golden berries, blueberries, raspberries and malusasiatica.

2.

Party A shall be responsible for component analysis for rare fruits and conduct research for extracting active component. Any recommended manufacturing method based on the research results shall be economically reasonable, energy-saving and practical.

3.

Party A shall act as Party B’s long-term technology support to offer multifunctional technology cooperation with Party B, and shall be responsible for Party B’s long-term technology service to solve problems arising from Party B’s manufacturing process.

4.

Party A shall be responsible for providing technology and product quality criteria .The intellectual property in the research results shall belong to Party B.

II.

Party B’s responsibilities:

1.

If the research results have been adopted in the form of a manufacturing method, Party B shall establish production lines and purchase equipment in accordance with technology information provided by Party A. The supplier of the equipment shall install the equipment.

2.

Party B shall provide necessary budget and equipment for the development of a new manufacturing method.

3.

Party B shall strictly implement the technology specification, product quality criteria and examination method provided by Party A. It shall be liable for disputes or damages arising out of product quality resulted from Party B’s failure to comply with the above criteria.

4.

The research budget is RMB 180,000 Yuan (the research results shall pass the medium scale test and industrial performance test, and reach the requirement for industrialized production). Party B shall pay RMB 80,000 Yuan after the execution of the Agreement and shall pay another RMB 50,000 Yuan when the research results have passed the preliminary test and medium scale test. The remaining RMB 50,000 Yuan shall be paid off before the end of September 2009.

III.

Both Parties shall take responsibilities to ensure that the research will progress smoothly, to guarantee their creditworthiness and to achieve mutual development.

IV.

This Agreement shall be effective until September 30, 2009.

V.

Any issues not stipulated in this Agreement shall be separately negotiated by both Parties.

VI.

This Agreement is executed in four originals and each Party shall hold two originals. This Agreement shall become effective upon execution.

Execution:

Party A: Heilongjiang Ba Yi Nong Ken University Food Collage (seal)

Representative:

Party B: Daqing Long He Da Food Co., Ltd (seal)

Representative:

EX-10.11

Exhibit 10.11

(English Summary)

Counter-Guarantee Agreement

Ref: (2007) XinBaoZi(061)

Contractual Parties:

Party A: Daqing Long He Da Food Co., Ltd

Legal Address:

Legal Representative: YuChangjun

Bank Account: Yinhe Sub-branch of Daqing Industrial and Commercial Bank

Account Number: 03010120038000007

Telephone: 4617095

Post Code: 163311

Facsimile: 4617097

Party B: DaQing Industrial and Commercial Guarantee Co., Ltd

Legal Address:

Legal Representative: LiuXueli

Bank Account: Tongda Sub-branch of Industrial and Commercial Bank of China

Account Number: 2490155030

Telephone: 6621621

Post Code: 163311

Facsimile: 6621627

For the purpose of ensuring the performance of the contract numbered "(2007) Shang Yin Jie Zi No. 012" (hereinafter referred to as the "Main Contract" ), Party A is willing to set up collateral over the property which it has lawful rights to dispose, and Party B, after checking and reviewing the collateral property, is willing to accept the collateral. Based on friendly negotiation, Party A and Party B (hereinafter collectively referred to as the "Parties") hereby entered into the contract as follows:

Article I

The execution of this contract shall not affect Party B's legal right to recourse against the debtor under the Main Contract.

Article II

This Contract is entered to secure the right and interest of Party B for providing its guarantee to the creditor under the Main Contract. The total loan amount is RMB 20,000,000 with the loan term from August 24, 2007 to August 23, 2008.

Article III

The collateral property under this Contract provided by Party A is the production line of concentrated juice. Party A undertakes that the collateral property is free from any other third party's rights and/or encumbrances.

Article IV

The collateral property under this contract is evaluated at a price of [   ], the collateral rate is [   ], the actual collateral amount is RMB 20,000,000.

Article V

The scope of the contract covers all the liabilities and obligations assumed by Party B under the guarantee contract for repayment of the principal, and payment of interest (including default compound interest and additional interest) and liquidated damages. It shall also cover the costs and expenses occurred in realizing of the collateral right under this Contract.

Article VI

The measures and responsibilities for care and/or maintenance of the collateral property are as follows:

1.

The collateral property shall be kept by Party A after the registration process.

Party A shall maintain the production line (the collateral property) and shall bear the responsibility of repairing and maintaining the property. Party A shall accept Party B's examination and review from time to time.

2.

Where the properties under control of Party A is damaged or lost, Party A shall promptly inform Party B, and Party B is entitled to request Party A to provide additional properties for collateral. Normally, Party A shall inform Party B within three working days of the damage and/or losses and shall obtain Party B's written confirmation in this regard. The confirmation of Party B shall be signed by the legal representative of Party B and shall bear the company seal. Absent of the confirmation shall be regarded as no notice is made by Party A, in this case, Party A shall be liable for Party B's damages and losses for breach of covenant.

2

Article VII

At the request of Party B, Party A shall buy property insurance for the collateral property showing Party B as the third party beneficiary and shall present the insurance policy to Party B. The insurance term shall be longer than the loan term of the Main Contract. In case the loan term of the Main Contract is extended, the insurance period shall be extended accordingly. Where the property insured is damaged and compensation is paid by the insurance company to Party A, Party A shall put the compensation amount in custody of a notarization and inform Party B within three days.

Article VIII

During the contract term, where the value of the collateral property is reduced due to Party A's actions, Party A shall, within 10 days of such event, provide additional property to make up the reduced value.

Article IX

During the term of the Contract, without Party B's written consent, Party A shall not sell or donate any of the collateral property, or remove, lease, transfer or pledge the collateral properties.

Article X

During the collateral period, Party A may transfer the collateral property with Party B's written consent and shall be subject to the supervision of Party B. The proceeds of transfer shall only be used:

(1) to deposit into the account as designated by Party B, and shall not be used by Party A during the contract term, or

(2) to pay the loan in advance by Party A.

3

Article XI

All costs and expenses for notarization, verification, appraisal, insurance, registration, transportation, preservation and temporary keeping by the notarization institution under the Contract shall be borne by Party A.

Article XII

If merger and division of Party A have occurred during the contract term, the successor(s) shall bear the obligations under this Contract. If Party A is dissolved or goes bankrupt, Party B shall have the right to dispose Party A's collateral.

Article XIII

Under any one of the following circumstances, Party B shall have the right to dispose of the collateral property:

(1) the Main Contract expires, the borrower fails to pay the principal and interest or the borrower can not pay the principal and interest within an extended period.

(2) the borrower was dissolved or went bankrupt. If the proceeds acquired through the disposition of the collateral property is not enough for repayment of the principal and payment of the interest and the costs and expenses incurred, Party B is entitled to make further claims; where the proceeds exceeds the amount of the principal and interest, Party B shall refund the difference to Party A.

Article XIV

Under one of the following circumstances, Party A shall promptly inform Party B in writing:

(1) the operation system of Party A has changed, and there is subcontract, lease, joint venture, merger(acquisition), division, reorganization, cooperation with foreign investors, or increase or decrease of registered capital.

(2) Party A is involved in disputes or the property has been confiscated by the authorities.

(3) any dispute arising in connection with the collateral.

(4) insolvency, shutdown, dissolution, cease of business for reorganization, or revocation of business.

4

(5) change of legal address, telephone or legal representative.

(6) change of shareholders (if Party A is a limited liability company).

When under the circumstance (1) above, Party A shall give 30 days notice to Party B, when under any other circumstance of this article, Party A shall inform Party B within 7 days of the occurrence of such events.

Article XV Termination

When the borrower of the main contact pays the principal and interest in accordance with the loan contract or accelerate the payment, this Contract shall be terminated automatically, the property which is under control of Party B shall be returned to Party A and the insurance policy thereof shall be refunded to Party A.

Article XVI

After the contract becomes effective, any extension of the Main Contract by the lender and Party A shall be approved by Party B in writing. If such extension is not approved by Party B, Party B shall no longer be the guarantor. Party A shall register the extension of the Main Contract with competent government agencies.

Article XVII

After the Contract becomes effective, neither Party A nor Party B may modify or terminate this contract for no good reason. When it is necessary to modify or terminate this contract, the Parties to the contract shall consult each other to reach a written agreement. The provisions contained in this contract shall remain effective and valid until any written agreement to modify or terminate this contract is reached.

Article XVIII

During the contract term, Party A shall provide Party B its financial statements and report to Party B the use of the loan on a monthly basis. In case Party A fails to provide its financial statements to Party B for two continuous months, Party A will be considered in breach of the Contract.

5

Article XIX Breach of Contract

(1) In accordance with the provision of sub-clause one of Article 6 hereof, in case the collateral property is damaged as a result of Party A's actions, Party B is entitled to claim for recovery of the property or request Party A to provide additional property acceptable to Party B.

(2) In accordance with the provision of sub-clause two of Article 6 hereof, in case the collateral property is damaged as a result of Party B's actions, Party A is entitled to claim for recovery of the property or the damages and/or losses incurred.

(3) For any losses suffered by Party B because Party A has been hiding the following facts with regard to the collateral property: joint ownership with a third party, existing disputes, confiscation, or pledge, Party A shall be liable for Party B's economic losses.

(4) Any Party breaches the provision of Article 16, the breaching Party shall pay the non-breaching Party an amount equivalent of 0.05% of the total loan amount under the Main Contract.

(5) During the term of the contract, if Party B modifies the clauses or assigns its obligations under the Main Contract without obtaining consent from Party A, Party A may terminate this contract and demand Party B to return the collateral property which is under control by Party B.

(6) The default interest is agreed upon by both parties: [none].

(7) The disposition of securities by Party A without authorization shall be null and void, whereas Party B may, if necessary and reasonable, request Party A to recover the collateral property and may be entitled to a default interest of 0.05% of the total loan amounts.

Article XX

Other issues as may be agreed by the Parties: [none].

Article XXI Solution of Disputes

Any disputes arising out of the performance of this contract shall be settled through negotiation and/or intermediation. If disputes can not be settled through negotiation and/or intermediation, the Parties may bring the case to the court where the contract is signed.

Article XXII

The contract is signed by the legal representatives or the authorized representatives of both Parties and shall bear the seal of the company. It shall become effective as of the effective date of the Main Contract and shall expire upon the principal and interest under the Main Contract being paid off.

6

Article XXIII

The contract is executed in duplicate with each Party holding one copy of which.

Appendix to the contract: Schedule of the collateral property and the copy of the purchase invoice of the collateral property.

Execution:
Party A: Company seal	Party B: Company seal
Legal representative: Signature	Legal representative: Signature
(or authorized representative)	(or authorized representative)
Date: 27 August 2007	Date: 27 August 2007
Execution Place: at the office site of DaQing Industrial and Commercial Guarantee Co., Ltd

7

EX-10.12

Exhibit 10.12

(English Summary)

Renminbi Loan Agreement

Contractual Parties:

Party A: the Company

Party B: Daqing Commercial Bank  

Due to Party A’s needs as stated hereunder, Party A desires to obtain a loan from Party B and Party B agrees to offer Party A such a loan. The Parties entered into this Agreement through negotiation in accordance with Contract Law, General Provisions of Loans and other relevant laws and regulations:

Article I: Type of Loan

1.

The loan under this Agreement (the “Loan”) shall be a short-term working capital loan.

Article II: Purpose of Loan

1.

The Purpose of the Loan shall be for purchase of raw material.

2.

Party A shall not change the purpose of the Loan without Party B’s written consent.

Article III: Loan Amount and Term

1.

The amount of the Loan is Renminbi Twenty Million Yuan (RMB 20,000,000 Yuan).

2.

The term of the Loan shall be 12 months, starting from 24 August 2007 to 23 August 2008.

3.

The actual withdrawal date and repayment date of the Loan shall be subject to the dates on the receipt of the loan proceeds. Party B may transfer the Loan to Party A in one or more in installments during the term of the Loan according to Party A’s actual needs and operation situation.

Article IV Interest and Calculation

1.

The monthly interest rate is 7.02‰; the interest shall be calculated on daily basis as of the date of actual withdrawal, and shall be settled quarterly.

2.

Should Party A fails to timely pay the interest in accordance with the Agreement, Party B shall be entitled to collect compound interest against the due interest, i.e., to collect additional interest on the due interest which shall be treated as part of the principal, in accordance with the relevant regulations promulgated by the People’s Bank of China.

3.

If Party A fails to use the Loan for the purpose set forth in the Agreement, Party B shall be entitled to default interest calculated based on the amount and days of the misappropriation.

4.

During the term of the Agreement, if Party B’s interest policy is adjusted, the interest of the Agreement shall remain unchanged.

Article V Repayment and Source of Repayment Sum

1.

The Loan shall be repaid from revenues derived from (1) Party A’s sales revenue and (2) Party A’s other revenue.

2.

Even any other contract to which Party A is a party has stipulations on the foresaid repayment, such stipulation shall not affect Party A’s performance of its obligation of repayment under this Agreement. Under no circumstance shall Party A refuse performance of its repayment obligation hereunder based on the foresaid clause about repayment source.

3.

Party A shall timely and fully pay the interest and repay the principal of the loan on time.

4.

Party A shall ensure that on or before each of the interest settlement date and principal repayment date, Party A’s bank account opened with Party B shall be sufficient for the interest and principal to be transferred to Party B, and Party A shall authorize Party B to transfer such amount on the agreed interest settlement date and principal repayment date.

Article VI Security

1.

The type of security for the Loan is guarantee.

2.

Party A is obligated to actively assist Party B in the latter’s signing of a guarantee contract numbered “2007 Shang Yin Bao Zi No. 012” regarding the security for repayment under this Agreement.

3.

In case where the guarantor herein is confronted with any change adverse to Party B’s credit rights hereunder, Party A shall upon Party B’s request replace such a guarantor with a party eligible to act as a guarantor.

4.

the guarantee contract shall be an integral part of this Agreement.

Article VII The Parties’ Rights and Obligations

1.

Rights and Obligations of Party A:

(1)

Party A shall withdraw and use the loan in accordance with the Agreement.

(2)

Party A shall be responsible for the authenticity, accuracy and completion of the materials provided by Party A.

(3)

Party A shall accept Party B’s investigation and supervision with regard to the usage of the Loan;

(4)

Party A shall actively cooperate with Party B for the latter’s investigation and supervision on Party A’s production, operation and financial situation; Party A shall provide Party B with relevant periodical financial statements of balance statement and income sheet.  

(5)

Party A shall repay the principal and pay the interest under this Agreement.

(6)

Party A shall bear the expense occurred hereunder, including but not limited to, the expense in relation to notarization, verification, assessment, registration, litigation and attorney’s fees.

(7)

For any notice or other document send by Party B with respect to repayment or payment, Party A shall sign and send to Party B the return receipt within 3 days.

(8)

If Party A goes through subcontracting, reorganization, joint operation, business combination, merger, joint venture, division, decrease of registered capital, share transfer, assignment of substantial assets and any other events which will affect Party B’s rights and interest hereunder, Party A shall inform Party B 30 days prior to such events and obtain Party B’s written consent; otherwise Party A shall not take any of the above-mentioned corporate action before paying off the Loan.

(9)

Party A shall inform Party B in writing any changes in its registered address, mailing address, business scope or legal representative, within 7 days of such change.

(10)

Party A shall inform Party B in writing immediately after the occurrence of any event jeopardizing Party A’s ordinary operation, or substantially adverse to its performance of repayment obligation hereunder, including but not limited to substantial dispute, insolvency, or deterioration of its financial situation,.

(11)

If Party A experiences shutdown, dissolution, shutout for reorganization, revocation of business license, or deregistration, Party A shall inform Party B in writing within 5 days of the occurrence of such events, and shall guarantee immediate repayment of principal and payment of interest.    

2.

Rights and Obligations of Party B:

(1)

Party B shall have rights to request Party A to provide any material in relation to this Loan.

(2)

Party B shall transfer the principal, interest, compound interest, default interest or other expense which is due under this Agreement, in accordance with the Agreement or relevant laws.

(3)

In cases when Party A evades Party B’s supervision, delays principal repayment and interest payment, or any other serious breach of the Agreement, Party B shall be entitled to its default rights under the Loan Agreement, report to relevant authorities, or publicly urge the payment from Party A through media.

(4)

Party B shall be obligated to keep confidential the information provided by Party A with regard to its indebtedness, finance, production and operation, unless otherwise stipulated by this Agreement or by relevant laws and regulations.

Article VIII Breach of Agreement

1.

After this Agreement become effective, the Parties shall perform its obligations hereunder; the breaching party shall be liable for any damages arising out of the breach.

2.

Where Party A fails to withdraw the Loan in accordance with sub-clause 3 of Article III hereunder, Party B shall be entitled to liquidated damage calculated daily based on the interest rate hereunder.  

3.

Where Party B fails to provide the Loan in accordance with sub-clause 3 of Article III hereunder, Party A shall be entitled to liquidated damage calculated daily based on the interest rate hereunder.

4.

Should Party A repay the Loan in advance without Party B’s written consent, Party B shall be entitled to collect interest according to the term and interest rate of the Loan as stipulated in the Agreement.

5.

If Party A fails to timely repay the principal and pay the interest hereunder, Party B shall have rights to set a deadline for such payment, or set off the payment against the amount in Party A’s account opened with Party B, and Party B shall also be entitled to collect default interest against the unpaid principal based on a rate of 0.351‰ per day, and collect compound interest against the unpaid interest.

6.

Should Party A fail to use the Loan for the purpose set forth in the Agreement, Party B shall have rights to retract part or the total amount of the Loan before the maturity of the Loan, or even terminate the Agreement, and may at the mean time collect default interest against the misappropriated principal based on days of the misappropriation at a rate of 0.468‰ per day.

7.

In case where the circumstances stated in clause 4 and 5 occur to Party A concurrently, Party B shall resort to the more serious penalty against Party A, but shall not resort to both penalties under clauses 4 and 5.

8.

If any of the following events occurs, Party A shall take corrective measures satisfactory to Party B to remedy the damages within 7 days upon receipt of Party B’s notice; otherwise Party B is entitled to retract part or the total amount of the Loan before the maturity of the Loan. If such retraction cannot be conducted, Party B shall be entitled to liquidated damage based on the same interest rate as that applied to the unpaid principal, and Party B shall also be entitled to any losses in principal and interest:

(1)

Party A provides forged balanced sheet, income statement or other financial statement, or hides substantial facts regarding the content of such financial documents.

(2)

Party A fails to cooperate, or reject Party B’s supervision on Party A’s operation and financials with regard to the usage of the Loan.

(3)

Without Party B’s consent, Party A assigns or disposes, or threatens to assign or dispose any substantial part of its assets.

(4)

Substantial part or the whole of Party A’s assets has been possessed by other creditors, or been taken over by appointed trustee or similar party, or Party A’s property has been distained or frozen, under which circumstances Party B may suffer serious losses.

(5)

Without Party B’s consent, Party A conducts any activities such as subcontracting, reorganization to a limited liability company, joint operation, combination, merger, joint venture, division, decrease of registered capital, share transfer, assignment of substantial assets and any other activities which will affect Party B’s rights and interest.

(6)

Party A changes its registered address, mailing address, business scope or legal representative, or Party A makes substantial overseas investment, which affect or threaten to affect Party B’s rights and interest.

(7)

Party A has been involved in significant dispute or had financial problems, which affect or threaten to affect Party B’s rights and interest.

(8)

Any other event may affect Party B’s rights and interest or cause serious losses to Party B.

Article IX Effectiveness, Modification, Rescindment and Termination  

1.

This Agreement shall become effective upon both Parties’ signature and seal; in case there is a security contract attached hereof, this Agreement shall become effective upon the effectiveness of such security contract. This Agreement shall expire on the date when the principal, interest, compound interest, default interest, liquidated damage and any other expense have been paid off.

2.

Party B shall be entitled to terminate this Agreement upon any of the following events and request Party A to repay the Loan and pay the interest before the maturity of the Loan and any losses arising thereof :   

(1)

Party A is occurred any events of shutdown, dissolution, shutout for reorganization, revocation of business license, or deregistration.

(2)

Any change in guarantee adverse to Party B’s rights, and Party A fails to provide substitute guarantee upon Party B’s request.

(3)

Any other serious breach of the Agreement.

3.

If Party A requests to renew the Loan, it shall apply to Party B in writing 30 days prior to the expiration of this Agreement and provide the guarantor’s written consent for continued guarantee. The Loan shall be renewed upon Party B’s approval and execution of a renewal agreement. Before the execution of the renewal agreement this Agreement shall continue to be in effect.

4.

After this Agreement becomes effective, unless otherwise stipulated in this Agreement, no party shall modify or terminate this Agreement without the other party’s consent. If the modification or termination is necessary, a written agreement shall be reached through the Parties’ negotiation. Before such agreement is reached, this Agreement shall continue to be in effect.

Article X Solution of Disputes

1.

Any dispute arising from the performance of this Agreement shall be solved through the Parties’ negotiation. If no agreement is reached, the dispute shall be submitted to Party B’s local court for litigation.

Article XI Other Issues   

(none)

Article XII Miscellaneous

The attachment (if any) to the Agreement shall be an integral part of this Agreement and shall have the same legal effect as this Agreement.

Execution:

Party A: the Company (company seal)

Legal Representative (or Authorized Representative): Yu Changjun  

Party B: Daqing Commercial Bank (company seal)  

Legal Representative (or Authorized Representative):

Date: 24 August 2007

EX-10.13

 

Exhibit 10.13

(English Summary)

Guarantee Contract

Ref: (2007) SHANGYINBAOZIDI (012)

Guarantor (Party A): Daqing Industrial and Commercial Guarantee Co., Ltd.

Address:

Legal Representative: LiuXueli

Lender (Party B): Daqing Industrial and Commercial Bank

Address:

Legal Representative: GuanXihua

For the purpose of ensuring the performance of the (2007) ShangYinJieZiDi (012) loan contract (hereinafter referred to as the “main contract”) signed by and between Daqing Long He Da Food Co., Ltd and Daqing Industrial and Commercial Bank, the  guarantor, Daqing Industrial and Commercial Guarantee Co., Ltd (hereinafter referred to as “Party A”), at the request of the borrower, is willing to give Daqing Industrial and Commercial Bank (hereinafter referred to as “Party B) a guarantee for the loan. The currency and amount of the loan under the main contract is RMB 20,000,000 and the loan period of the main contract starts from August 24, 2007 to August 23, 2008. After check and review, Party B agrees Party A as the guarantor for the borrower’s repayment of the loan. In compliance with relevant laws and regulations and through friendly negotiation, Party A and Party B (hereinafter collectively referred to as “the Parties”), entered into the following ag reement:

Article I

Party A agrees to provide guarantee to the lender for the loan of RMB 20,000,000 borrowed by the borrower under the aforementioned main contract, as well as for the accrued interest, the costs and expenses, penalty, defaulting interest, damage compensation, legal fees, lawsuit fees, announcement fees, transportation fees and any other payables.

Article II

The type of guarantee hereof shall be of joint and several liability. When the borrower fails to pay the payables in accordance with the main contract (including payment upon loan accelaration), Party A shall unconditionally pay the payables for and on behalf of the borrower and shall permit Party B to debit directly from Party A’s bank account opened with Party B.

Article III

Party A undertakes that it has acquired all the relevant authorizations and approvals for this contract and that its liability of guarantee during the term of this contract will not be affected and exempted by the following circumstances:

(1) Changes in the borrower’s social or financial status; orders, demands and/or instructions from higher authorities;

(2) agreements entered into by and between the borrower and other entities;

(3) Party A’s reorganization or dissolution and the changes in its financial status; and

(4) debt restructuring under the main contract.

Article IV

Where there is any reorganization or dissolution, Party A shall inform Party B in writing 15 days prior to such events. The obligations under the guaranteed contract shall be assumed by the successor or Party A and the borrower shall elect a new guarantor acceptable to Party B.

Article V

Party A agree that, except any changes in the loan amount, the term of the Loan, the purpose of the Loan and the interest rate, the modification of other clauses under the main contract between Party B and the borrower do not need to obtain Party A’s prior written consent, nor will the liability of guarantee of Party A under the contract be affected.

The loan amount and the term of the Loan shall be changed in accordance with any such modification in the main contract. The loan interest shall be the interest rate specified in such modification.

Article VI

The guarantee period under the contract is five years.

Article VII

During the guarantee period, Party A shall provide periodic financial statements to Party B and shall be subject to Party B’s examination of its capability as a guarantor. Absent of the approval and consent of Party B, Party A shall not give guarantee to any third parties.

Article VIII

Under any one of the following circumstances, Party B shall have the right to request Party A to perform its responsibilities on an accelerated basis and Party A shall agree to perform such responsibilities if:

(1) Party A is in breach of Article 7, Article 8 and Article 9 hereof or in any other substantial default;

(2) Party B demands acceleration of the debt payment under the main contract.

Article IX

Other issues negotiated and agreed by the Parties:

(1) the contract shall become effective upon the receipt of Party B’s loan disbursement notice by Party A.

(2) Article 7 is not applicable;

Article X

Breach of Contract

When Party A violates the provisions of Article 2 and fails to pay the payables for and on behalf of the borrower, Party B shall have the right to debit such payment from the deposit account of Party A and may request the difference from Party A.

When Party A violates the provisions of Article 4, Party B shall be entitled to default interest equivalent to 0.5% of the guaranteed amount against the successor.

When Party A violates the provisions of Article 3 and Article 7 and makes inaccurate and untruthful statements or breaches the contract, Party B shall have the right to demand Party A to correct its behaviour and shall be entitled to default interest equivalent to 0.3% of the total guaranteed amount.

Article XI

Dispute(s) Resolution

Disputes arising from the performance of the contract shall be settled through friendly negotiation between the Parties. If no agreement is reached by such negotiation, the Parties shall bring the case to the Party B’s local court for litigation.

Article XII

The contract shall become effective upon execution by the legal representatives or authorized representatives of the Parties and with the company seal affixed.

Article XIII

The contract shall be executed in duplicate with each Party holding a copy of which.

Execution:

Party A (Company Seal)

Party B (Company Seal)

Legal Representative:

Legal Representative:

(or authorized representative)

(or authorized representative)

LiuXueli

Signing date: 27 August 2007

Signing date: 27 August 2007

EX-10.14

 

Exhibit 10.14

(English Summary)

License Agreement

Ref: SX-D-050912-0157

Contractual Parties:

Party A: Daqing Longheda Food Co., Ltd.

Address: Third Zone, Daqing High Tech Industrial Development Park, 163316

Party B: Shanghai Shanda Xin Hua Interactive Entertainment Co., Ltd  

Party A desires to use the brand and the image of the online game “the World of Legend” when producing functional beverage.  Party B has the rights to, and agrees to authorize Party A to use the brand and the image of the online game “the World of Legend” to produce functional beverage. The Parties reach agreement as follows through amicable negotiation:

I. Scope of License:

1.

Party B agrees to provide the brand and image of “the World of Legend” and authorize Party A to exclusively use such brand and image for production of functional beverage (“Licensed Products”); Party A is entitled to use the brand and image of “the World of Legend” on the package and design of advertising materials for the Licensed Products.

2.

Details about the Licensed Product are specified in Attachment 1 herein. If Party A desires to change or add to the list of the Licensed  Products, Party A shall provide to Party B relevant product development plan, and negotiate with Party B for signing a written addendum for such change or addition.

3.

Party A shall not use such brand and image for packaging, promotion or advertising for the Licensed  Product without Party B’s written consent;

4.

Party A’s use of such brand and image shall be limited to the Licensed Products. Party A shall not license the brand and image to any third party.

5.

Party A shall obtain any governmental approval for producing the Licensed Product.  Party A shall be responsible for the quality of the Licensed  Products and be liable for any related product liability. If Party A’s failure to fulfill its above-mentioned responsibilities or obligations subjected Party B to infringement or other claims, Party A shall use its best efforts to start solving any problems within seven business days at its own expense.  Party A shall indemnify Party B (including but not limited to Party B’s Licensor, shareholders, management team, employees, directors and agents). The expense borne by Party A shall include but not limited to litigation fees, arbitration fees, attorney fees, damages and any other related expense.    

II. Territory of License: within Mainland China (excluding Hong Kong, Macao and Taiwan)

III. Term of License:

1.

The term of the license shall be 3 years starting from September 15, 2005 to December 14, 2008; the period from September 15, 2005 to December 14, 2005 shall be the period of product planning.

2.

Party A shall enjoy a priority right to extend the Agreement upon the expiration of the Agreement if it has met the thresholds for sales amount for the three years as set in the Agreement. If the Parties do not reach an agreement on the extension of the Agreement one month before its expiration date, this Agreement shall automatically terminate upon the expiration date.

IV. Basic Fee and Commission for Extra Sales:

1.

the royalty to be paid by Party A to Party B consists of basic fee and commission for extra sales, which shall be calculated as follows:

(1)

Basic fee: Party A shall pay to Party B the basic fee in accordance with the following provisions, no matter whether Party A has accomplished the minimum sales amount or not:

A.

For the first year (September 15, 2005 –December 14, 2006): minimum sales amount is RMB 20,000,000, and the basis fee is RMB 1,000,000.

B.

For the second year (December 15, 2006 –December 14, 2007): minimum sales amount is RMB 24,000,000, and the basis fee is RMB 1,200,000.

C.

For the third year (December 15, 2007 –December 14, 2008): minimum sales amount is RMB 28,800,000, and the basis fee is RMB 1,440,000.

(2)

Commission for extra sales: if Party A’s sales amount of a certain year is over the set minimum amount for that year, Party A shall pay to Party B a sum equal to 3% of the extra sales revenue.

V. Payment Time and Amount of the Basic Fee and Commission for Extra Sales:

1.

Within 7 days upon the execution of the Agreement Party A shall pay 50% of the basic fee of RMB 500,000 for the first year;

2.

Before March 31, 2006, Party A shall pay the rest 50% basic fee of RMB 500,000 for the first year;

3.

Before September 30, 2006, Party A shall pay 50% of the basic fee of RMB 600,000 for the second year and plus the extra sale commission of the first year;

4.

Before March 31, 2007, Party A shall pay the rest 50% basic fee of RMB 600,000 for the second year plus the extra sale commission for the period from September 2006 to the end of February 2007;

5.

Before September 30, 2007, Party A shall pay 50% of the basic fee of RMB 720,000 for the third year and plus the extra sale commission for the period from 1 March 2007 to 31 August 2007;   

6.

Before March 31, 2008, Party A shall pay the rest 50% of the basic fee of RMB 720,000 for the third year and plus the extra sale commission for the period from September 1, 2007 to the end of February 2008;

7.

Before September 30, 2008, Party A shall pay the extra sale commission for the period from March 1, 2008 to August 31, 2008.

VI. Confirmation and Auditing of Sales Amount:

1.

After the Licensed Products have been put into market, Party A shall provide to Party B quarterly financial statements for the sales of the Licensed Products, which shall be complete and accurate.

2.

Party B has rights to conduct on-site auditing by itself or by a third party appointed by Party B for the financial statements provided by Party A, and request Party A to provide relevant invoices or other evidential documents; Party A shall cooperate with Party B. Any expense arising thereof shall be borne by Party B, unless the outcome of the audit is not consistent with the data provided by Party A, under which circumstance, the expense shall be borne by Party A. Party B shall send a written notice to Party A two days prior to the auditing.  

3.

If there is any underpayment or non-payment of commission by Party A, Party A shall promptly make the payment; if the amount regarding such underpayment or non-payment is greater than 5% of the total payment due for that period, Party A shall pay Party B double of the delinquent payment, plus the expense of auditing fees, and attorney fees for investigating and examining such underpayment or non-payment. If the amount regarding such underpayment or non-payment has reached 10% of the total due payment of that certain period, Party B shall be entitled to terminate this Agreement.       

VII. Copyright Acknowledgment:

Party A is required to mark on the Licensed Products the following content concerning the copyright of the brand and the image:

Copyright Owner: Shanghai Shanda Interactive Entertainment Limited;

Agent: Shanghai Shanda Xin Hua Interactive Entertainment Limited

Licensee: Daqing LongHeDa Food Co., Ltd

VIII. Product Examination:

1.

Before manufacturing the Licensed Products, Party A shall provide two samples of the Licensed Products for Party B’s examination and written approval. Party B shall respond to Party A within 2 weeks. If Party B has any suggestion for changes, Party A shall cooperate and make the changes accordingly and provide the revised sample for Party B’s examination. Any products produced and put into market without Party B’s written consent shall be deemed as non-conforming products and shall be called back by Party A within 7 days, under which circumstance Party A shall be liable for breach of the Agreement and infringement of Party B’s legitimate rights.   

2.

Before working on any advertisement and promotion material for the Licensed  Products, Party A shall send the relevant design draft or plan for Party B’s confirmation. Party B shall respond in writing within 1 week. If Party B has any suggestion for changes, Party A shall cooperate and make the changes accordingly and provide the revised material for Party B’s confirmation.

3.

At the same time when Party A provides Party B with samples of the Licensed Products, it shall inform Party B in writing of its relevant production plan.

4.

Within 10 days of the manufacture of the first batch of the Licensed Products, Party A shall send 10 finished products (including the advertising material) to Party B free of charge for Party B’s record. All finished products shall be in conformity with the sample approved by Party B; otherwise Party A shall not be allowed to sell such products.

IX. Confidentiality

1.

“Confidential Information” refers to information obtained, directly or indirectly, by any director, employee, staff, agent or counsel of one Party from the other Party or its counsel before or after the execution of this Agreement, which is of any nature (including commercial, financial, operational, management, legal information or other information); such information may be disclosed by any means, including but not limited to the ways of written document, oral form or telecommunication. Confidential Information includes but not limited to sales data, marketing plan, commercial schedule, financial information, client information, supplier information, employee information, know-how, commercial secret, and any other information of technological, scientific and commercial nature; Confidential Information shall also include any analysis report, list, research report or similar documents, which are formed based on the foresaid information, and any documents or materials prepared by the disclosing Party or its director, employee, staff, agent or counsel enclosing, reflecting or based on such information.

2.

Without disclosing Party’s prior written consent, the other Party shall keep confidential the Confidential Information and shall not use or divulge such Confidential Information to any third party, unless such usage or divulgence is necessary for normal performance of this Agreement.

3.

The Parties shall keep confidential the cooperation between them and the content herein; either Party shall not disclose to any third party any information about the cooperation between them and the content herein without the other Party’s prior written consent. However, Party A shall be entitled to disclose documents or reports in any form pursuant to requirements of the US Securities and Exchange Commission concerning such cooperation of the Parties, or disclose such cooperation to its investors by means of press conference or by any other method.

4.

The term of the confidentiality clauses herein shall start from the effective date of this Agreement and extend to three years after the termination date of the Parties’ business cooperation under this Agreement.

X. Infringement:

Unless otherwise stipulated in Article XI of this Agreement, the licensed territory, and the scope of the Licensed Products, Party A shall have obligations to independently act against any infringement to the licensed brand and image. Party B shall use its best efforts to cooperate and assist Party A in this regard.

XI. Licensor’s Purchase:

In case where Party B desires to purchase Party A’s Licensed Products, Party A shall offer the best price based on the cost of the products. Party A is entitled to be the sole supplier of the Licensed Products to Party B. The detailed purchase amount and sales territory for the specific products shall be negotiated by the Parties and a separate agreement shall be reached to that effect. Party B shall act as a special distributor of the Licensed Products and enjoy the rights of direct sales of such products.  

XII. Termination:

1.

To protect its rights in the brand “the World of Legend”, Party B is entitled to terminate the Agreement by giving written notice to Party A upon the occurrence of following events:

(1)

Any major quality problems with the Licensed Products lead to adverse penalty publicity by relevant consumer organization or the Licensed Products has evaluated by competent government agencies as nonconforming products;

(2)

Party A stops operation of its business for no good reason. Party A has been dissolved or changed to a business address unknown to Party B;

(3)

Party A has deteriorated credit record, goes bankrupt or experience negative events that have tarnished its creditworthiness (such as serious consumer dispute, or violation of state regulations).      

2.

Party B shall be liable to Party A if any of the following happens:

(1)

During the term of this Agreement, if Party B grants license to any third party to use the licensed brand and image to manufacture functional beverage similar to the Licensed Products, Party A is entitled to terminate the Agreement and request refund of any basic fee and commission for extra sales paid to Party B and any losses arising thereof.

(2)

If Party A has any evidence to prove that there occurs any force majeure event that has prevented Party A from performing its obligations under this Agreement, Party A is entitled to terminate the Agreement prior to the expiration date and Party B shall give its consent accordingly, provided, however, that Party A shall be obligated to pay the basic fee and commission for extra sales for any finished products.     

XIII. Inventory

If this Agreement is not renewed upon its expiration, Party A shall stop manufacturing any products using the brand and image of “the World of Legend”. Any unsold products manufactured before the expiration date may be sold within 6 months after the expiration date provided that the inventory has been examined by Party B and the commission for the sale of the inventory will be paid. The unsold inventory beyond the 6-month period can only be sold upon Party B’s written consent.    

XIV. Support on Advertisement

To support Party A’s marketing efforts for the Licensed Products, Party B agrees to advertise such products through Party B’s marketing channel 2 months before the Licensed Products will be put on market.

XV. Miscellaneous:

1.

Any issue not stipulated in this Agreement shall be separately negotiated by the parties and a supplemental agreement shall be reached accordingly.

2.

Any dispute arising hereof, which can not be solved by the parties’ negotiation and is to be brought for litigation, shall be submitted to Party B’s local court.

3.

The Agreement shall become effective upon the date when the first basic fee is paid in accordance with the Agreement.

4.

The Agreement is prepared in four counterparts and each Party shall hold two copies.

XVI.

The attachments to this Agreement shall be an indivisible part of this Agreement, and shall have the same legal effect as this Agreement. The attachments herein include: (1) specification of the Licensed Products; (2) copies of the Parties' business license.

Execution:

Party A: Daqing Longheda Food Co., Ltd.

Party B: Shanghai Shanda Xin Hua Interactive Entertainment Co., Ltd

EX-10.15

 

Exhibit 10.15

FEZDALE INVESTMENTS LIMITED

P.O. Box 957, Offshore Incorporations Centre,

Road Town, Tortola, British Virgin Islands

August 14, 2008

By Hand Delivery

Cheng Sing Kau, Colman

Dear Mr. Cheng Sing Kau, Colman:

The purpose of this letter agreement (the “Agreement”) is to confirm your employment arrangement with Fezdale Investments Limited, on the following terms and conditions:

1.

Duties. You will be employed as the Chief Financial Officer of FEZDALE INVESTMENTS LIMITED and its subsidiaries (collectively the “Group”), subject to the supervision of the board of directors.  Your duties will include, but not be limited to, management of the accounting and financial strategy of the Group, implementing the Group’s business plan as the most senior executive officer of the Group, and responsibility for (i) all financial management and accounting for the Group, (ii) compliance with local GAAP principles (and in a form that can be converted into US GAAP) and all applicable regulatory authorities, and (iii) supervising the Group’s compliance with any SEC reporting obligations, its internal controls and other corporate governance obligations, the Sarbanes-Oxley Act and other applicable securities laws.  You shall devote your entire business time, energies, attention and abilities to the business of the Gr oup unless otherwise authorized by the board of directors.  During your employment by the Group, you shall not engage in any activity or have any business interest which in any manner interferes with the proper performance of your duties, conflicts with the interest of the Group or brings into disrepute the business reputation of the Group.

2.

Salary.  Your salary will be at the rate of Six Hundred Thousand Renminbi (RMB 600,000) per year, to be paid in monthly installments or otherwise in accordance with the Group’s normal payroll practices.

3.

Bonus.  You shall be eligible for a bonus, which will be payable in the sole discretion of the Group based upon your performance and the Group’s performance during any year of your employment with the Group.

4.

Term of Employment.  Either you or the Group may end your employment with 2 months notices or two months salary in lieu of notice.

5.

Vacation.  You shall be entitled to accrue up to twenty paid vacation days per year.  You may not take more than 10 vacation days consecutively.  All vacation days will be taken at times mutually agreed by you and the Group and will be subject to the business needs of the Group.  Vacation days will not be carried over to future years of employment.

6.

Incentive and Other Plans.  You will be entitled to participate in such pension, major medical, life insurance and other plans and benefit programs as may be made available from time to time to employees of the Group having responsibilities comparable to yours and under the terms of which you are eligible to participate.

7.

Group Policies.  You shall at all times be subject to and comply with policies, rules and procedures of the Group then in effect, including without limitation with respect to hours of work, holidays, vacation and sick leave and pay, conflict of interest, improper payments, political contributions and payments to government officials.

8.

Patents.  You hereby assign to the Group all rights to any inventions, techniques, processes, concepts, ideas, programs, source codes, formulae, research and development and marketing plans, whether or not patentable or copyrightable, made, conceived or reduced to practice by you during the course of your employment by the Group.

9.

Covenants.  During your employment by the Group and at all times thereafter, you shall not (a) disrupt, disparage, impair or interfere with the business of the Group or (b) disclose to anyone else, directly or indirectly, any proprietary or business sensitive information concerning the business of the Group or use, or permit or assist, by acquiescence or otherwise, anyone else to use, directly or indirectly, any such information.  Such information shall include information not previously made generally available to the public or to the trade by the Group’s management, with respect to the Group’s or any of its affiliates’ products, facilities, applications and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information (including the revenues, costs or profits associated with any of the Group’s products), busine ss plans, prospects or opportunities, or other information to the extent not generally known to the public which, if released to unauthorized persons, could be detrimental to the reputation or business interests of the Group or parties with which the Group contracts or which would permit such person to benefit improperly.  Such information does not include any information which is or becomes generally available to the public or is generally known in the industry or industries in which the Group operates other than as a result of disclosure by you in violation of this agreement.

10.

Group Property.  Upon termination of your employment for any reason, you shall promptly deliver to the Group all property belonging to Group, in whatever form, and shall not retain any copies of any correspondence, reports, lists or other documents relating in any way to the affairs of the Group or its clients.

11.

Non-Solicitation.  During the term of your employment by the Group and for a period of two (2) years following the termination of your employment, whether voluntary or involuntary, you shall not, directly or indirectly:

(a)

solicit customers or business patronage of the Group or any of its affiliates, or

2

(b)

approach or attempt to induce any person who is then in the employ of the Group to leave the employ of the Group or employ or attempt to employ any person who was in the employ of Group at any time during the prior twelve months.

12.

Non-Competition. In addition, and not in lieu of, any other agreements of Employee not to compete with, solicit employees or customers of, or solicit others having a relationship with the Group, Employee agrees that for the duration of his employment with and for two (2) years after the termination of Employee’s employment with the Group (the “Non-Competition Period”): Employee shall not, directly or indirectly, engage in, or have any interest in, any person, firm, corporation, undertaking or business (whether as an executive, officer, director, employee, agent, security holder, consultant, investor or similar position) that engages in a fruit processing business (“Competitive Business”).

Notwithstanding the above, the Employee may own, as an investor, holdings as part of a portfolio investment through mutual funds or other funds pooling investments in different corporations (the stock of which is publicly traded) some of which may be engaging in a Competitive Business, in each case when any and all the investment and voting decisions with respect to such voting stock are made by an unaffiliated third party fund manager; and

The Employee may serve as a shareholder, director, employee or officer of any entity that is not engaged in a Competitive Business.

13.

Notices. All notices hereunder shall be to the parties’ addresses set forth above for the Group and on the Signature Page for you, in writing and given by registered or certified mail, return receipt requested, postage and registration fees prepaid, and shall be deemed given when so mailed.  The addresses set forth herein may be changed by notice given in the manner set forth in this Section.

 

3

14.

Miscellaneous.  This Agreement (a) shall be governed by, and construed in accordance with, the Chinese laws, without regard for the conflict of laws principles thereof, (b) shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, legal representatives and assigns, but neither this Agreement nor any rights hereunder will be assignable or otherwise subject to hypothecation by you, (c) may not be changed orally but only by an agreement in writing signed by the party against whom any waiver, change, amendment, notification or discharge is sought, and (d) contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, oral or written, between the parties hereto.  The invalidity of all or any part of any section of this Agreement shall not render invalid the remainder of this Agreement.  If any provision of this Agreement is so broad as to b e unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

Very truly yours,

Fezdale Investments Limited

By: /s/ Kung Yiu Fai

Name: Kung Yiu Fai

Title: Director

ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE

WRITTEN:

/s/ Cheng Sing Kau, Colman

Cheng Sing Kau, Colman

Address:  Room 2207, Block C, Kornhill,

    Quarry Bay, Hong Kong

4

EX-10.16

 

Exhibit 10.16

FEZDALE INVESTMENTS LIMITED

P.O. Box 957, Offshore Incorporations Centre,

Road Town, Tortola, British Virgin Islands

August 14, 2008

By Hand Delivery

Shi Jinglin

Dear Mr. Shi Jinglin

The purpose of this letter agreement (the “Agreement”) is to confirm your employment arrangement with Fezdale Investments Limited, on the following terms and conditions:

1.

Duties. You will be employed as the Chief Executive Officer of FEZDALE INVESTMENTS LIMITED (the “Company”) and its subsidiaries (collectively the “Group”), subject to the supervision of the board of directors.  You shall have such responsibilities and duties consistent with your position and as may from time to time be assigned to you by the Company, and shall have all of the powers and duties usually incident to such position.  You shall devote your entire business time, energies, attention and abilities to the business of the Group unless otherwise authorized by the board of directors.  You shall devote your entire business time, energies, attention and abilities to the business of the Group unless otherwise authorized by the board of directors.  During your employment by the Group, you shall not engage in any activity or have any business interest which in any manner interferes with the prop er performance of your duties, conflicts with the interest of the Group or brings into disrepute the business reputation of the Group.

2.

Salary.  Your salary will be at the rate of Six Hundred Thousand Renminbi (RMB 600,000) per year, to be paid in monthly installments or otherwise in accordance with the Group’s normal payroll practices.

3.

Bonus.  You shall be eligible for a bonus, which will be payable in the sole discretion of the Group based upon your performance and the Group’s performance during any year of your employment with the Group.

4.

Term of Employment.  Either you or the Group may end your employment with 2 months notices or two months salary in lieu of notice.

5.

Vacation.  You shall be entitled to accrue up to twenty paid vacation days per year.  You may not take more than 10 vacation days consecutively.  All vacation days will be taken at times mutually agreed by you and the Group and will be subject to the business needs of the Group.  Vacation days will not be carried over to future years of employment.

6.

Incentive and Other Plans.  You will be entitled to participate in such pension, major medical, life insurance and other plans and benefit programs as may be made available from time to time to employees of the Group having responsibilities comparable to yours and under the terms of which you are eligible to participate.

7.

Group Policies.  You shall at all times be subject to and comply with policies, rules and procedures of the Group then in effect, including without limitation with respect to hours of work, holidays, vacation and sick leave and pay, conflict of interest, improper payments, political contributions and payments to government officials.

8.

Patents.  You hereby assign to the Group all rights to any inventions, techniques, processes, concepts, ideas, programs, source codes, formulae, research and development and marketing plans, whether or not patentable or copyrightable, made, conceived or reduced to practice by you during the course of your employment by the Group.

9.

Covenants.  During your employment by the Group and at all times thereafter, you shall not (a) disrupt, disparage, impair or interfere with the business of the Group or (b) disclose to anyone else, directly or indirectly, any proprietary or business sensitive information concerning the business of the Group or use, or permit or assist, by acquiescence or otherwise, anyone else to use, directly or indirectly, any such information.  Such information shall include information not previously made generally available to the public or to the trade by the Group’s management, with respect to the Group’s or any of its affiliates’ products, facilities, applications and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information (including the revenues, costs or profits associated with any of the Group’s products), busine ss plans, prospects or opportunities, or other information to the extent not generally known to the public which, if released to unauthorized persons, could be detrimental to the reputation or business interests of the Group or parties with which the Group contracts or which would permit such person to benefit improperly.  Such information does not include any information which is or becomes generally available to the public or is generally known in the industry or industries in which the Group operates other than as a result of disclosure by you in violation of this agreement.

10.

Group Property.  Upon termination of your employment for any reason, you shall promptly deliver to the Group all property belonging to Group, in whatever form, and shall not retain any copies of any correspondence, reports, lists or other documents relating in any way to the affairs of the Group or its clients.

11.

Non-Solicitation.  During the term of your employment by the Group and for a period of two (2) years following the termination of your employment, whether voluntary or involuntary, you shall not, directly or indirectly:

(a)

solicit customers or business patronage of the Group or any of its affiliates, or

2

(b)

approach or attempt to induce any person who is then in the employ of the Group to leave the employ of the Group or employ or attempt to employ any person who was in the employ of Group at any time during the prior twelve months.

12.

Non-Competition. In addition, and not in lieu of, any other agreements of Employee not to compete with, solicit employees or customers of, or solicit others having a relationship with the Group, Employee agrees that for the duration of his employment with and for two (2) years after the termination of Employee’s employment with the Group (the “Non-Competition Period”): Employee shall not, directly or indirectly, engage in, or have any interest in, any person, firm, corporation, undertaking or business (whether as an executive, officer, director, employee, agent, security holder, consultant, investor or similar position) that engages in a fruit processing business (“Competitive Business”).

Notwithstanding the above, the Employee may own, as an investor, holdings as part of a portfolio investment through mutual funds or other funds pooling investments in different corporations (the stock of which is publicly traded) some of which may be engaging in a Competitive Business, in each case when any and all the investment and voting decisions with respect to such voting stock are made by an unaffiliated third party fund manager; and

The Employee may serve as a shareholder, director, employee or officer of any entity that is not engaged in a Competitive Business.

13.

Notices.  All notices hereunder shall be to the parties’ addresses set forth above for the Group and on the Signature Page for you, in writing and given by registered or certified mail, return receipt requested, postage and registration fees prepaid, and shall be deemed given when so mailed.  The addresses set forth herein may be changed by notice given in the manner set forth in this Section.

 

3

14.

Miscellaneous.  This Agreement (a) shall be governed by, and construed in accordance with, the Chinese laws, without regard for the conflict of laws principles thereof, (b) shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, legal representatives and assigns, but neither this Agreement nor any rights hereunder will be assignable or otherwise subject to hypothecation by you, (c) may not be changed orally but only by an agreement in writing signed by the party against whom any waiver, change, amendment, notification or discharge is sought, and (d) contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, oral or written, between the parties hereto.  The invalidity of all or any part of any section of this Agreement shall not render invalid the remainder of this Agreement.  If any provision of this Agreement is so broad as to b e unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

Very truly yours,

Fezdale Investments Limited

By: /s/ Kung Yiu Fai

Name: Kung Yiu Fai

Title: Director

ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE

WRITTEN:

/s/ Jinglin Shi

Jinglin Shi

Address: Room 302, Unit 24 Central Shopping Mall,

Dongfeng New Village, Daqing City

EX-10.17

 

Exhibit 10.17

FEZDALE INVESTMENTS LIMITED

P.O. Box 957, Offshore Incorporations Centre,

Road Town, Tortola, British Virgin Islands

August 14, 2008

By Hand Delivery

Yu Manjiang

Dear Mr. Yu Manjiang:

The purpose of this letter agreement (the “Agreement”) is to confirm your employment arrangement with Fezdale Investments Limited, on the following terms and conditions:

1.

Duties. You will be employed as the Vice President of Sales of FEZDALE INVESTMENTS LIMITED (the “Company”) and its subsidiaries (collectively the “Group”), subject to the supervision of the board of directors.  You shall have such responsibilities and duties consistent with your position and as may from time to time be assigned to you by the Company, and shall have all of the powers and duties usually incident to such position.  You shall devote your entire business time, energies, attention and abilities to the business of the Group unless otherwise authorized by the board of directors.  During your employment by the Group, you shall not engage in any activity or have any business interest which in any manner interferes with the proper performance of your duties, conflicts with the interest of the Group or brings into disrepute the business reputation of the Group.

2.

Salary.  Your salary will be at the rate of One Hundred and Eighty Thousand Renminbi (RMB 180,000) per year, to be paid in monthly installments or otherwise in accordance with the Group’s normal payroll practices.

3.

Bonus.  You shall be eligible for a bonus, which will be payable in the sole discretion of the Group based upon your performance and the Group’s performance during any year of your employment with the Group.

4.

Term of Employment.  Either you or the Group may end your employment with 2 months notices or two months salary in lieu of notice.

5.

Vacation.  You shall be entitled to accrue up to twenty paid vacation days per year.  You may not take more than 10 vacation days consecutively.  All vacation days will be taken at times mutually agreed by you and the Group and will be subject to the business needs of the Group.  Vacation days will not be carried over to future years of employment.

6.

Incentive and Other Plans.  You will be entitled to participate in such pension, major medical, life insurance and other plans and benefit programs as may be made available from time to time to employees of the Group having responsibilities comparable to yours and under the terms of which you are eligible to participate.

7.

Group Policies.  You shall at all times be subject to and comply with policies, rules and procedures of the Group then in effect, including without limitation with respect to hours of work, holidays, vacation and sick leave and pay, conflict of interest, improper payments, political contributions and payments to government officials.

8.

Patents.  You hereby assign to the Group all rights to any inventions, techniques, processes, concepts, ideas, programs, source codes, formulae, research and development and marketing plans, whether or not patentable or copyrightable, made, conceived or reduced to practice by you during the course of your employment by the Group.

9.

Covenants.  During your employment by the Group and at all times thereafter, you shall not (a) disrupt, disparage, impair or interfere with the business of the Group or (b) disclose to anyone else, directly or indirectly, any proprietary or business sensitive information concerning the business of the Group or use, or permit or assist, by acquiescence or otherwise, anyone else to use, directly or indirectly, any such information.  Such information shall include information not previously made generally available to the public or to the trade by the Group’s management, with respect to the Group’s or any of its affiliates’ products, facilities, applications and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information (including the revenues, costs or profits associated with any of the Group’s products), busine ss plans, prospects or opportunities, or other information to the extent not generally known to the public which, if released to unauthorized persons, could be detrimental to the reputation or business interests of the Group or parties with which the Group contracts or which would permit such person to benefit improperly.  Such information does not include any information which is or becomes generally available to the public or is generally known in the industry or industries in which the Group operates other than as a result of disclosure by you in violation of this agreement.

10.

Group Property.  Upon termination of your employment for any reason, you shall promptly deliver to the Group all property belonging to Group, in whatever form, and shall not retain any copies of any correspondence, reports, lists or other documents relating in any way to the affairs of the Group or its clients.

11.

Non-Solicitation.  During the term of your employment by the Group and for a period of two (2) years following the termination of your employment, whether voluntary or involuntary, you shall not, directly or indirectly:

(a)

solicit customers or business patronage of the Group or any of its affiliates, or

2

(b)

approach or attempt to induce any person who is then in the employ of the Group to leave the employ of the Group or employ or attempt to employ any person who was in the employ of Group at any time during the prior twelve months.

12.

Non-Competition. In addition, and not in lieu of, any other agreements of Employee not to compete with, solicit employees or customers of, or solicit others having a relationship with the Group, Employee agrees that for the duration of his employment with and for two (2) years after the termination of Employee’s employment with the Group (the “Non-Competition Period”): Employee shall not, directly or indirectly, engage in, or have any interest in, any person, firm, corporation, undertaking or business (whether as an executive, officer, director, employee, agent, security holder, consultant, investor or similar position) that engages in a fruit processing business (“Competitive Business”).

Notwithstanding the above, the Employee may own, as an investor, holdings as part of a portfolio investment through mutual funds or other funds pooling investments in different corporations (the stock of which is publicly traded) some of which may be engaging in a Competitive Business, in each case when any and all the investment and voting decisions with respect to such voting stock are made by an unaffiliated third party fund manager; and

The Employee may serve as a shareholder, director, employee or officer of any entity that is not engaged in a Competitive Business.

13.

Notices.  All notices hereunder shall be to the parties’ addresses set forth above for the Group and on the Signature Page for you, in writing and given by registered or certified mail, return receipt requested, postage and registration fees prepaid, and shall be deemed given when so mailed.  The addresses set forth herein may be changed by notice given in the manner set forth in this Section.

3

14.

Miscellaneous.  This Agreement (a) shall be governed by, and construed in accordance with, the Chinese laws, without regard for the conflict of laws principles thereof, (b) shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, legal representatives and assigns, but neither this Agreement nor any rights hereunder will be assignable or otherwise subject to hypothecation by you, (c) may not be changed orally but only by an agreement in writing signed by the party against whom any waiver, change, amendment, notification or discharge is sought, and (d) contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, oral or written, between the parties hereto.  The invalidity of all or any part of any section of this Agreement shall not render invalid the remainder of this Agreement.  If any provision of this Agreement is so broad as to b e unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

Very truly yours,

Fezdale Investments Limited

By: /s/ Kung Yiu Fai

Name: Kung Yiu Fai

Title: Director

ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE

WRITTEN:

/s/ Yu Manjiang

Yu Manjiang

Address:  Room 201, Unit 2 Wanbao Distrcit 2-32,

Daqing City

4

EX-10.18

Exhibit 10.18

FEZDALE INVESTMENTS LIMITED

P.O. Box 957, Offshore Incorporations Centre,

Road Town, Tortola, British Virgin Islands

August 14, 2008

By Hand Delivery

Yu Changjun

Dear Mr. Yu Changjun:

The purpose of this letter agreement (the “Agreement”) is to confirm your employment arrangement with Fezdale Investments Limited, on the following terms and conditions:

1.

Duties. You will be employed as the President of FEZDALE INVESTMENTS LIMITED (the “Company”) and its subsidiaries (collectively the “Group”).  You shall have such responsibilities and duties consistent with your position and as may from time to time be assigned to you by the Company, and shall have all of the powers and duties usually incident to such position.  You shall devote your entire business time, energies, attention and abilities to the business of the Group unless otherwise authorized by the board of directors.  During your employment by the Group, you shall not engage in any activity or have any business interest which in any manner interferes with the proper performance of your duties, conflicts with the interest of the Group or brings into disrepute the business reputation of the Group.

2.

Salary.  Your salary will be at the rate of Six Hundred Thousand Renminbi (RMB 600,000) per year, to be paid in monthly installments or otherwise in accordance with the Group’s normal payroll practices.

3.

Bonus.  You shall be eligible for a bonus, which will be payable in the sole discretion of the Group based upon your performance and the Group’s performance during any year of your employment with the Group.

4.

Term of Employment.  Either you or the Group may end your employment with 2 months notices or two months salary in lieu of notice.

5.

Vacation.  You shall be entitled to accrue up to twenty paid vacation days per year.  You may not take more than 10 vacation days consecutively.  All vacation days will be taken at times mutually agreed by you and the Group and will be subject to the business needs of the Group.  Vacation days will not be carried over to future years of employment.

6.

Incentive and Other Plans.  You will be entitled to participate in such pension, major medical, life insurance and other plans and benefit programs as may be made available from time to time to employees of the Group having responsibilities comparable to yours and under the terms of which you are eligible to participate.

7.

Group Policies.  You shall at all times be subject to and comply with policies, rules and procedures of the Group then in effect, including without limitation with respect to hours of work, holidays, vacation and sick leave and pay, conflict of interest, improper payments, political contributions and payments to government officials.

8.

Patents.  You hereby assign to the Group all rights to any inventions, techniques, processes, concepts, ideas, programs, source codes, formulae, research and development and marketing plans, whether or not patentable or copyrightable, made, conceived or reduced to practice by you during the course of your employment by the Group.

9.

Covenants.  During your employment by the Group and at all times thereafter, you shall not (a) disrupt, disparage, impair or interfere with the business of the Group or (b) disclose to anyone else, directly or indirectly, any proprietary or business sensitive information concerning the business of the Group or use, or permit or assist, by acquiescence or otherwise, anyone else to use, directly or indirectly, any such information.  Such information shall include information not previously made generally available to the public or to the trade by the Group’s management, with respect to the Group’s or any of its affiliates’ products, facilities, applications and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information (including the revenues, costs or profits associated with any of the Group’s products), busine ss plans, prospects or opportunities, or other information to the extent not generally known to the public which, if released to unauthorized persons, could be detrimental to the reputation or business interests of the Group or parties with which the Group contracts or which would permit such person to benefit improperly.  Such information does not include any information which is or becomes generally available to the public or is generally known in the industry or industries in which the Group operates other than as a result of disclosure by you in violation of this agreement.

10.

Group Property.  Upon termination of your employment for any reason, you shall promptly deliver to the Group all property belonging to Group, in whatever form, and shall not retain any copies of any correspondence, reports, lists or other documents relating in any way to the affairs of the Group or its clients.

11.

Non-Solicitation.  During the term of your employment by the Group and for a period of two (2) years following the termination of your employment, whether voluntary or involuntary, you shall not, directly or indirectly:

(a)

solicit customers or business patronage of the Group or any of its affiliates, or

(b)

approach or attempt to induce any person who is then in the employ of the Group to leave the employ of the Group or employ or attempt to employ any person who was in the employ of Group at any time during the prior twelve months.

12.

Non-Competition. In addition, and not in lieu of, any other agreements of Employee not to compete with, solicit employees or customers of, or solicit others having a relationship with the Group, Employee agrees that for the duration of his employment with and for two (2) years after the termination of Employee’s employment with the Group (the “Non-Competition Period”): Employee shall not, directly or indirectly, engage in, or have any interest in, any person, firm, corporation, undertaking or business (whether as an executive, officer, director, employee, agent, security holder, consultant, investor or similar position) that engages in a fruit processing business (“Competitive Business”).

Notwithstanding the above, the Employee may own, as an investor, holdings as part of a portfolio investment through mutual funds or other funds pooling investments in different corporations (the stock of which is publicly traded) some of which may be engaging in a Competitive Business, in each case when any and all the investment and voting decisions with respect to such voting stock are made by an unaffiliated third party fund manager; and

The Employee may serve as a shareholder, director, employee or officer of any entity that is not engaged in a Competitive Business.

13.

Notices.

All notices hereunder shall be to the parties’ addresses set forth above for the Group and on the Signature Page for you, in writing and given by registered or certified mail, return receipt requested, postage and registration fees prepaid, and shall be deemed given when so mailed.  The addresses set forth herein may be changed by notice given in the manner set forth in this Section.

14.

Miscellaneous.  This Agreement (a) shall be governed by, and construed in accordance with, the laws of the People Republic of China, without regard for the conflict of laws principles thereof, (b) shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, legal representatives and assigns, but neither this Agreement nor any rights hereunder will be assignable or otherwise subject to hypothecation by you, (c) may not be changed orally but only by an agreement in writing signed by the party against whom any waiver, change, amendment, notification or discharge is sought, and (d) contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, oral or written, between the parties hereto.  The invalidity of all or any part of any section of this Agreement shall not render invalid the remainder of this Agreement.  If any provision of this Agree ment is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

Very truly yours,

Fezdale Investments Limited

By:/s/ KUNG Yiu Fai

Name: KUNG Yiu Fai

Title: Director

ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE

WRITTEN:

/s/ YU Changjun

YU Changjun

Address: Room 801, Unit 4 #F Yigeng District

Dongfeng New Village, Daqing City

EX-16

Exhibit 16

August 14, 2008

Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549

Ladies and Gentlemen:

We have read the statements of Fashion Tech International, Inc. pertaining to our firm included under Item 4.01 of Form 8-K, to be filed on or about August 14, 2008 and agree with such statements as they pertain to our firm. We have no basis to agree or disagree with other statements of the registrant contained therein.

Sincerely,

/s/ Pritchett, Siler & Hardy, P.C.

PRITCHETT, SILER & HARDY, P.C.

EX-21

Exhibit 21

Subsidiaries of Fashion Tech International, Inc.

Name of Subsidiary	Jurisdiction of Organization	% Owned
Fezdale Investments Limited	BVI	100%
Solar Sun Holdings Limited	Hong Kong	100%
Daqing Longheda Food Company Limited	PRC	100%