Nutrastar Intl (OTC BB:NUIN)

Nutrastar switches from a foreign invested enterprise (FIE) to a variable interest entity (V(E)

On July 28, 2008, pursuant to a restructuring plan intended to ensure compliance with Chinese regulatory requirements, the Founders entered into an equity transfer agreement with New Resources, pursuant to which the Founders transferred all of their equity interests in Heilongjiang Shuaiyi to New Resources for a purchase price of RMB 60 million (approximately $8.8 million). As a result, New Resources became the 100% owner of Heilongjiang Shuaiyi. According to relevant Chinese laws, the equity interest transfer price should be paid by New Resources to the Founders in full within a certain period of time after Heilongjiang Shuaiyi obtained the new business license. Because New Resources will not be able to pay off the equity interest transfer price within such required time period, New Resources and the Founders have decided to transfer all of the equity interests in Heilongjiang Shuaiyi owned by New Resources back to the Founders.