Kun Run Biotech (PINK:KURU)

In July 2010, Kun Run Biotechnology, Inc. received a notice from the Hainan Food and Drug Administration that the agency would investigate certain products of the Company due to production procedure concerns and at the same time the GMP license of the Company would be suspended until the investigation is concluded. As result of the notice, the Company ceased its production of all products. The Company at the time believed that the investigation would end shortly and would not have an adverse impact on the results of its operations due to the then existing inventories. However, as of the date of this report, the agency has not concluded its investigation. The Company believes that due to the prolonged investigation, it is unlikely that its production will resume any time soon and its results of operations will be adversely impacted.