China Nutrifruit Group (NYSE AMEX:CNGL)

On December 20, 2010, we filed a registration statement on Form S-1 to register 73,000,000 units of Taiwan Depositary Receipts (“TDRs”), representing 7,300,000 shares of our common stock, consisting 5,000,000 shares to be issued by our company and 2,300,000 shares of our common stock owned by a selling stockholder. We plan to apply for listing the TDRs on the Taiwan Stock Exchange upon the consummation of the proposed TDR offering. We intend to use the net proceeds from the proposed TDR offering to construct a new fruit and vegetable production line in Daqing and a new factory facility with a new multi-purpose concentrate juice/pulp production line in Mu Dan Jiang.

We believe that our currently available working capital should be adequate to sustain our operations at our current levels through at least the next twelve months. As stated above, we plan to expand our production capacities through the proposed TDR offering. We cannot assure that the proposed TDR offering will succeed and we may require additional cash resources due to changed business conditions or other investments or acquisitions we may decide to pursue. If the proposed TDR offering does not materialize or result in sufficient fund to support our planned capacity expansion, and 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, or we may have to abandon our capacity expansion plan.