Nutrastar Intl Inc (OTC:NUIN)

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

On February 5, 2016, Mr. Robert Tick resigned as the Company’s Chief Financial Officer and Treasurer and from the Board of Directors (the "Board") of the Company, effective February 19, 2016. A copy of Mr. Tick’s resignation letter is hereby attached as Exhibit 99.1 and incorporated herein by reference in its entirety. It is expected that the Company will name a successor to fill the vacancies as soon as practicable.

On February 8, 2016, Ms. Virginia L. P’an resigned from the Board of the Company, effective February 19, 2016. At the time of her resignation, Ms. P’an was the Chairperson of the Board’s Compensation Committee and a member of each of the Audit and Governance and Nominating Committees. A copy of Ms. P’an’s resignation letter is hereby attached as Exhibit 99.2 and incorporated herein by reference in its entirety. It is expected that the Board will appoint a new director to fill the vacancy as soon as practicable.

On January 29, 2016, Nutrastar International Inc. (“the Company’) entered into a Note and Common Stock Purchase Agreement (the “Loan Agreement”) with (i) Accretive Capital Partners, LLC (“Accretive”), which together with its affiliates currently owns approximately 28.73% of the Company’s common stock, (ii) nine (9) other accredited investors who are unaffiliated with Accretive but known to and believed to be current shareholders of the Company, (iii) Mr. Richard Fearon, managing partner of the manager to Accretive and an independent director of the Company; and (iv) Mr. Robert Tick, the Company’s Chief Financial Officer and a director of the Company (collectively the “Investors”).

Pursuant to the Loan Agreement, the Company borrowed from Investors the aggregate sum of $1,100,000 (the “Loan”), which included $650,000 from Accretive and $50,000 from Mr. Fearon. $1,065,000 of the Loan was paid by the Investors in cash at the closing and the remaining $35,000 was paid by Mr. Tick through the release by Mr. Tick of certain outstanding payment obligations of the Company due to him. In connection with procurement of the Loan, the Company issued to the Investors: (a) the promissory notes (the “Promissory Notes”) in the aggregate principal amount of $1,100,000 and (b) 7,117,767 shares in the aggregate of the Company’s common stock. The Promissory Notes mature not later than October 29, 2016 and bear interest at 12% per annum, accruing and payable monthly.

The primary purposes of the Loan are to: (i) fund the engagement of dispute resolution counsel in the People’s Republic of China (the “PRC”) and Hong Kong to explore alternatives, review options, understand the steps, and to take necessary actions in order to obtain access to the Company’s assets in the PRC; (ii) facilitate the Company’s fulfillment of certain payment obligations with respect to amounts due and unpaid to the November 2015 bridge loan lenders, third party service providers and Mr. Tick; and (iii) fund the 2015 audit engagement fee for the Company’s independent registered accountants.

As disclosed on the Form 8-K dated as of November 20, 2015, the Company’s cash and operating assets are currently located in the PRC and are held by the Company’s wholly-owned subsidiaries and their affiliated operating entities. Under PRC law, authorization by the Company’s current Chief Executive Officer, Ms. Lianyun Han (the “CEO”), is currently required to access these liquid assets in order to, among other things, permit the Company to meet its outstanding payment obligations. The other executive officers of the Company and members of the Board of Directors (the “Board”) currently do not have access to these assets. Despite continuous efforts through multiple channels made by other Board members, Company officers, and the Company’s legal counsel over the course of the past six months, the Board has been unable to obtain the necessary authorization and access from the CEO as Ms. Han ceased direct communication with other Board members, Company officers and the Company’s legal counsel beginning October 1, 2015. As a result, the Board has had no other alternatives but to form a special committee consisting of independent directors with the authority to identify alternatives and to consider actionable legal steps necessary to access the Company’s liquid assets in the PRC and to permit the Company to meet its future payment obligations since, without Ms. Han’s authorization, the Company has minimum funds available in order to meet its current and future payment obligations and to fund the engagement of legal counsel on behalf of the Company for dispute resolution in the PRC.

The Company’s November 2015 bridge loan contained a covenant that the Company would commence a rights offering to the shareholders of the Company having an aggregate value of not less than $300,000 and not more than $750,000, not later than the first quarter of fiscal year 2016. Ultimately, the Company and Accretive agreed to: 1) waive the requirement of a rights offering given the uncertain timing and impractical expense of such an offering; 2) increase the upper limit of the offering to $1.3 million in order to fund additional expenses identified by the Company; 3) waive the anti-dilution protection contained in the November 2015 bridge loan agreement; and 4) propose a private placement offered to certain accredited shareholders who are unaffiliated to Accretive but known to and believed to be current shareholders of the Company, on a pari passu basis to Accretive’s investment, as set forth in the Loan Agreement.

The Loan Agreement contains customary representations and warranties, events of default and post-closing covenants. In addition, pursuant to the Loan Agreement, the Company covenants and agrees, among other things, that the Board will adopt resolutions to: (i) as promptly as practicable, remove and replace the CEO as Chairman of the Board and replace her with a non-executive chairman; (ii) not later than the first quarter of fiscal year 2016, cause the Company’s affiliated operating entity, Daqing Shuaiyi Biotech Co., Ltd, to make an intercompany term loan to the Company or to one or more of its subsidiaries resulting in US-dollar denominated proceeds being available to the Company of not less than one hundred percent (100%) of such affiliated entity’s available cash, subject to compliance with applicable PRC banking laws and regulations; and (iii) not later than February 3, 2016, remove the directors of each subsidiary of the Company and appoint replacements satisfactory to Accretive, who shall implement such inter-company loan. In addition, the Company is required to take all requisite action such that the size of the Board will be set at seven members among which two members will be designated by Accretive.

The Loan will be secured by a pledge of assets by the Company and certain of its subsidiaries and affiliated entities and guaranteed by such subsidiaries and affiliated entities of the Company, subject to applicable laws and regulations. Within sixty (60) days after the date of the Loan Agreement, the Company is required to execute and deliver a pledge and security agreement to the Investors, under which, as collateral to secure the Company’s obligations under the Promissory Notes, the Company will pledge 100% of the issued and outstanding equity of its indirect subsidiary, Oriental Global Holdings Limited (“Oriental Global”) to the Investors. In addition, Oriental Global will pledge 100% of the issued and outstanding equity of its direct subsidiary, Harbin Baixin Biotech Development Co., Ltd. to the Investors.

The shares of common stock of the Company issued to the Investors are granted certain anti-dilution protections in the event of future issuances of Company securities and “piggy-back” registration rights under the Loan Agreement. As further security for the Loan, in the event the Company defaults on the Loan, the Company would be required to issue as liquidated damages to the Investors all additional shares of common stock which are available for issuance by the Company.

The foregoing descriptions of the Loan Agreement and the transaction contemplated thereby do not purport to be complete and are qualified in their entirety by reference to the form of Loan Agreement which is filed as Exhibit 10.1 to this Current Report and is incorporated herein by reference.

Management Discussion and Analysis

Net Revenue. Our revenues are generated from the sale of our Cordyceps Militaris products, functional health beverages and organic and specialty food products. Net revenue decreased approximately $0.15 million, or 1.3%, to approximately $11.02 million for the three months ended September 30, 2015, from approximately $11.16 million for the same period in 2014. This slight decrease was mainly attributable to the decrease in the sale of Cordyceps Militaris, by approximately $0.12 million and a decrease in the sale of our beverage products by approximately $0.03 million compared with the same period in 2014. The Company is currently operating at the optimal capacity level, thus the quantity sold for our products remains fairly stable. However, since all of our sales are denominated in RMB, the foreign exchange rates fluctuation of approximately 1.6% for the three months ended September 30, 2015 from the same period in 2014 caused a slight decrease in the total revenue.

Net Income. Net income decreased by approximately $0.07 million, or 1.1% to approximately $5.99 million for the three months ended September 30, 2015 from approximately $6.06 million for the same period of 2014, as a result of the factors described above.

ITEM 1.01.     ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On November 16, 2015, Nutrastar International Inc. (“the Company’) entered into a Note and Common Stock Purchase Agreement (the “Loan Agreement”) with (i) Accretive Capital Partners, LLC (“Accretive”), which together with its affiliates currently owns approximately 14.46% of the Company’s common stock; (ii) Mr. Richard Fearon, managing partner of the manager to Accretive and an independent director of the Company; and (iii) Mr. Robert Tick, the Company’s Chief Financial Officer and director.

Pursuant to the Loan Agreement, the Company borrowed from Accretive, Mr. Fearon and Mr. Tick (collectively the “Investors”) the aggregate sum of $180,000 (the “Loan”). A portion of the Loan was paid by the Investors in cash at the closing and the remaining portion was paid by the Investors through the release by Mr. Fearon and Mr. Tick of certain outstanding payment obligations of the Company due to them. In connection with procurement of the Loan, the Company issued to the Investors: (a) the promissory notes (the “Promissory Notes”) in the aggregate principal amount of $180,000 and (b) 673,853 shares in the aggregate of the Company’s common stock. The Promissory Notes bear interest at 12% per annum, compounding monthly and payable at maturity not later than March 16, 2016.

The primary purpose of the Loan is to fund the Company’s partial fulfillment of certain payment obligations with respect to amounts due and unpaid to certain third party service providers and Mr. Tick. The Company’s cash and operating assets are currently located in the People’s Republic of China (“PRC”) and are held by the Company’s wholly-owned subsidiaries and their affiliated operating entities. Under PRC law, authorization by the Company’s current Chief Executive Officer, Ms. Lianyun Han (the “CEO”), is currently required to access these liquid assets in order to, among other things, permit the Company to meet its outstanding payment obligations. The other executive officers of the Company and members of the Board of Directors (the “Board”) currently do not have access to these assets. Despite multiple efforts made by other Board members and the Company’s legal counsel over the past four months, the Board has been unable to obtain the necessary authorization and access from the CEO. As a result, the Board formed a special committee consisting of independent directors with the authority to identify alternatives and to consider actionable steps necessary to access the Company’s liquid assets in the PRC or otherwise to permit the Company to meet its ongoing payment obligations.

The Company sought a number of alternative sources of financing to fulfill its payment obligations. Ultimately, the Company was unable to obtain an acceptable alternative source of funding from a third party investor. On November 10, 2015, the Company received a proposal from Accretive, pursuant to which Accretive would provide a cash loan to the Company, contingent upon a minimum pari passu investment participation from another party. Mr. Tick and Mr. Fearon subsequently offered to roll-over a portion of outstanding payments due to them, including salary payments that have been due and payable to Mr. Tick since the second quarter of 2015. The Company’s Audit Committee and Board in its review of the proposal identified and acknowledged that the transaction contemplated by the Loan Agreement would be related party transactions from the outset of discussions with Accretive. On November 16, 2015, the Audit Committee and the Board independently approved the Loan Agreement and the transactions contemplated thereby, with Mr. Fearon or Mr. Tick abstaining from such votes.

The Loan Agreement contains customary representations and warranties, events of default and post-closing covenants. In addition, pursuant to the Loan Agreement, the Company covenants and agrees, among other things, that the Board will adopt resolutions to: (i) as promptly as practicable, remove and replace the CEO as Chairman of the Board and replace her with a non-executive chairman; (ii) not later than the first quarter of fiscal year 2016, commence a rights offering to the shareholders of the Company having an aggregate value of not less than $300,000 and not more than $750,000; and (iii) not later than the first quarter of fiscal year 2016, cause the Company’s affiliated operating entity to make an intercompany term loan to the Company or to one or more of its subsidiaries resulting in US-dollar denominated proceeds being available to the Company of not less than fifty percent (50%) of such affiliated entity’s available cash, subject to compliance with applicable PRC banking laws and regulations.

The Loan will be secured by a pledge of assets by the Company and certain of its subsidiaries and affiliated entities and guaranteed by such subsidiaries and affiliated entities of the Company, subject to applicable laws and regulations. Within sixty (60) days after the date of the Loan Agreement, the Company is required to execute and deliver a pledge and security agreement to the Investors, under which, as collateral to secure the Company’s obligations under the Promissory Notes, the Company will pledge 100% of the issued and outstanding equity of its indirect subsidiary, Oriental Global Holdings Limited (“Oriental Global”) to the Investors. In addition, Oriental Global will pledge 100% of the issued and outstanding equity of its direct subsidiary, Harbin Baixin Biotech Development Co., Ltd. to the Investors.

The shares of common stock of the Company issued to the Investors are granted certain anti-dilution protections in the event of future issuances of Company securities (other than the contemplated rights offering) and “piggy-back” registration rights under the Loan Agreement. As further security for the Loan, in the event the Company defaults on the Loan, the Company would be required to issue as liquidated damages to the Investors all additional shares of common stock which are available for issuance by the Company.

• Net revenue was $13.24 million, representing an increase of $0.24 million or 1.8% from $13.00 million in the comparable 2014 three month period.

• Basic and diluted EPS were $0.41 and $0.40, respectively, with 16.99 million basic shares and 17.74 million diluted shares outstanding.

Ms. Lianyun Han, CEO of Nutrastar, commented, "For the first half of 2015, we performed in line with our expectations. Sales of our core premium consumer product Cordyceps came in at $17.29 million, up 3.1% year-over-year, functional health beverages contributed $1.83 million and organic and specialty foods segment, our third consumer product category, contributing $1.17 million to revenues.  Gross margin expanded in the first half of the year by 0.9% to 77.8% as a result of economics of scale and an attractive product mix. Overall, we're delighted with the outcome of the second quarter and first six months of the year -- both periods marked by continued strong margins and an overall increase in revenue thanks to continued Cordyceps demand."

Ms. Han continued, "As for the remainder of the year, we are confident in the continuation of our growth and expect to meet our full year 2015 revenue guidance. Demand for our premium consumer products remains steadfast and robust. We remain committed to growing our brand awareness, bringing more products into the hands of health-conscious consumers and expanding our market internationally."

"As far as composition of our Board of Directors, after the resignation of Mr. Zhang Chunming due to personal health reasons, the Board currently comprised of six members, four of whom are independent directors. I would like to thank Mr. Zhang for his service over the past few years and wish him well in his future endeavors. The Company has started the recruitment process of a new director to fulfill the vacancy. We expect bringing on someone who can assist the Company in areas of product development and market expansion," added Ms. Han.

Outlook for the Year Ending December 31, 2015

Based on management's current expectations, full year 2015 revenue remains in the range of $43 million to $45 million.

For more information regarding Nutrastar's financial performance during the three and six months ended June 30, 2015, please refer to the Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on or about August 13, 2015.

• Net revenue was $7.04 million, representing an increase of $0.17 million or 2.5% from $6.87 million in the comparable 2014 three month period.
• Basic and diluted EPS were $0.21 and $0.20, respectively, with weighted average 16.96 million basic shares and 17.74 million diluted shares outstanding.

Management Commentary

"Nutrastar continued to operate at full production capacity during the first quarter 2015 and benefit from established economies of scale. Top line revenue grew by $0.17 million over the comparable 2014 quarter driven primarily by a $0.11 million increase in sales in our core premium Cordyceps consumer product. Gross margins remained robust � experiencing a slight 1.2% improvement from 76.3% in Q1 2014 to 77.5% in Q1 2015 as a result of economies of scale and increased sales of our higher margin core Cordyceps products," commented, Ms. Lianyun Han, CEO of Nutrastar.

Ms. Han continued, "Nutrastar's core Cordyceps business has grown significantly over the last several years. Cordyceps, our highest margin product, continues to be our strongest revenue producing product line with the greatest market demand here in China. We continue to be the largest single producer of Cordyceps Militaris in China according to the Market Survey of Cordyceps Militaris 2014, published by Qianinfo Consulting, an independent market research firm, and are currently exploring opportunities to expand internationally starting with our "on-the-go" soluble form.

As mentioned on our prior earnings announcement, we are gradually taking appropriate measures for overseas expansion and surveying various market opportunities. This includes conducting and prototyping new product formats for select international markets and gauging possible receptivity and viability in the U.S. market. It is our 2015 goal to complete some of these measures which may play a pivotal role in the success of our Cordyceps products abroad. We will provide updates on our progress in these areas as soon as we are able to."

Ms. Han added, "While it is not our policy to discuss fluctuations in Nutrastar's common stock, we would like to allay any concerns about the recent market activity. The Company knows of no reason for the recent decrease in share price or trading activity in our shares.  To the knowledge of Nutrastar, there has been no material adverse development or circumstances with respect to the Company's business that would explain the decrease in share price or trading volumes.  We believe the Company's financial position and business are fundamentally sound, and that we remain well positioned in the Cordyceps consumer market with multiple product line offerings. We are currently in compliance with SEC reporting and disclosure rules, and are committed to transparency, full and fair disclosure as dictated by SEC laws and regulations."

Outlook for the Year Ending December 31, 2015

Based on management's current expectations, full year 2015 revenue remains in the range of $43 million to $45 million.

HARBIN, China, March 30, 2015 /PRNewswire/ -- Nutrastar International Inc. (OTCQB: NUIN) ("Nutrastar" or the "Company"), a leading producer and supplier of premium branded consumer products, including commercially cultivated Cordyceps Militaris ("Cordyceps"), functional health beverages and organic and specialty foods, today announced its results for the full year ended December 31, 2014.

Financial Highlights for the Full Year Ended December 31, 2014  

• Net revenue was $43.33 million, as compared to $43.35 million in full year 2013.
• Gross profit was $34.01 million, representing a gross margin of 78.5%.
• Net income was $22.72 million, representing a net margin of 52.4%.
• Basic and diluted EPS were $1.34 and $1.28, respectively, with 16.83 million basic shares and 17.70 million diluted shares outstanding.

Management Commentary

Ms. Lianyun Han, CEO of Nutrastar, commented, "Over the past few years, we have worked hard at expanding product offerings, increasing revenue and creating opportunities through product development and capacity expansion. Although revenue for 2014 came in slightly under our estimates, it was a successful year nonetheless marked by the expansion and realignment of our product offerings in order to better position ourselves to meet current and future market demand. For the full year 2014, we operated at full production capacity and with the benefit of these economies of scale, our gross margins improved to 78.5%, up from 77.8% in the prior year. We also experienced a sales increase of approximately 10% or $3.36 million in our core premium consumer product Cordyceps, which includes sales of our new soluble, on-the-go Cordyceps powder solution. As expected, due to the strategic product realignment implemented in early 2014, sales growth of our core Cordyceps product segment was partially offset by $3.47 million decrease in sales of our beverages product line, resulting in year-over-year flat revenue growth."

Ms. Han continued, "Currently, we expect to continue operating at full production capacity and thus anticipate minimum year-over-year revenue growth in the current year.  Since demand for our premium Cordyceps Militaris consumer products remains robust in our current markets, we will begin to evaluate avenues for future capacity expansion this year."

"One of our 2015 priorities will be exploring opportunities and securing the export of our products to markets abroad. Since receiving initial export approval from China's Ministry of Commerce as Foreign Trade Operator, we have been conducting and prototyping new product formats for select international markets such as South Korea and Hong Kong. We plan to evaluate and test our on-the-go soluble Cordyceps powder solution to determine its potential receptivity and viability in the U.S. market, and explore strategic packaging and distribution partners that will be integral to our international exportation approval and expansion efforts. It is our current intention to complete market testing, secure packaging and international distribution partners in 2015 and begin generating international sales revenue in 2016. We believe the international path is a vital part of the Company's future growth plan and we are committed to ensuring it happens as soon as possible beginning with our powder solution.  We will keep the public apprised as initiatives progress."

"In closing, we believe 2015, despite our flat revenue growth expectations, will be a significant year that sets the stage for increased and sustained growth for the Company going forward. On behalf of the entire Nutrastar team, we would like to thank our shareholders and supporters for their continued patience and support for our Company and belief in our unique value proposition within the growing consumer product market. We look forward to sharing in our successes moving forward."

Third Quarter 2014 Financial Results:

• Net revenue was $11.16 million, representing an increase of $0.22 million or 2.1% from $10.94 million in the comparable 2013 three month period.
• Non-GAAP diluted EPS was $0.34, compared to $0.34 in prior year.

Ms. Lianyun Han, CEO of Nutrastar, commented, "Nutrastar's results for the third quarter and nine months ended September 30, 2014 came in solid and in line with our expectations: an increase in top line revenue coupled with continued strong margins. Third quarter revenue benefited from an increase of 8.1% or $0.73 million in sales of our core premium consumer product Cordyceps, which includes sales of our new soluble, on-the-go Cordyceps powder solution, and an increase of 3.1% or $0.17 million in sales of our Organic and Specialty Foods product line. As expected, sales growth seen in our first two product lines was partially offset by $0.52 million decrease in sales of our third product line, Functional Health Beverages, resulting from the strategic product realignment conducted earlier in the year. Gross margins increased 0.2% to 80.5% from 80.3% in the comparable 2013 quarter."

Ms. Han continued, "We remained conservative in terms of expansion, and laser-focused on entering the international arena. In September, we announced the receipt of initial approval from China's Ministry of Commerce and achievement of Foreign Trade Operator status, which will allow for the export of our unique products to selected international markets. We are now in the midst of the second and final step in the approval process. Once received, we anticipate our new on-the-go soluble Cordyceps powder solution will be the first product to launch, followed by our other premium consumer products once demand in selected markets has been validated.

As for the remainder of 2014, we expect majority of revenue to continue to come from our core consumer product, Cordyceps, and gross margins to remain robust. Due to the introduction of our soluble Cordyceps powder product and the realignment of our beverage product line earlier in the year, however, we are adjusting our full year 2014 revenue guidance to a more conservative estimate – coming in between $45 million and $47 million. Gross margins are expected to stay at current levels. We will update our shareholders and the investment community on our development progress as it relates to our international expansion and in all other areas of our business as we are able to."

Ms. Han concluded, "Nutrastar's future looks very bright given our consistent product demand and revenue growth, strong and steady margins, robust and growing balance sheet, expanding consumer product portfolio, and defined strategy for international expansion. We're very excited about what 2015 and beyond holds for us in all of our initiatives and we look forward to the time when our goals are brought to fruition."

Business Outlook

Based on management's current expectations, full year 2014 revenue should be in the range of $45 million to $47 million.

HARBIN, China, Sept. 10, 2014 /PRNewswire/ -- Nutrastar International Inc. (OTCQB: NUIN; "Nutrastar" or the "Company"), a leading producer and supplier of premium branded consumer products, including commercially cultivated Cordyceps Militaris ("Cordyceps"), health beverages and organic and specialty foods, today is pleased to announced that the Company has received the initial approval from China's Ministry of Commerce and is now registered as a Foreign Trade Operator.

The Company is currently in the process of completing the second step of the registration process, which is the next step in the Company's initiative to qualify for and eligible to exporting its premium consumer products internationally. In accordance with China's Foreign Trade Operator Regulations, the Company must now complete the required procedures and obtain the necessary approval from the local customs, tax offices, foreign exchange and other authorities in order to conduct foreign trade business. Once all the necessary steps are completed and approved, the Company will then be able to export its premium Cordyceps consumer product portfolio abroad.

Ms. Lianyun Han, Nutrastar's Chief Executive Officer, commented, "The entire Nutrastar team and I are thrilled to have completed the first step in the Foreign Trade Operator status process and are aggressively pursuing the completion of the second step. Once the necessary steps are completed, most of our Cordyceps related premium consumer products will then be eligible for export. Taking our premium consumer products to new markets abroad has been part of our long-term strategic growth plan, so this is an exciting time for us to be this close to achieving our goal."

Ms. Han added, "While confident in the demand for our products, we will take a conservative approach to international expansion once this status is approved for export. We will keep investors and the investment community updated as these initiatives and milestones come to fruition in the future."

• Net revenue was $19.87 million, representing an increase of $0.59 million or 3% from $19.29 million in the comparable 2013 six month period.
• Basic and diluted EPS were $0.40 and $0.38, respectively, vs last years same quarter of $0.37 and $0.35.

Ms. Lianyun Han, CEO of Nutrastar, commented, "Our entire consumer product portfolio performed in line with expectations in the three month period ended June 30, 2014. Sales of our core premium consumer product Cordyceps came in at an impressive $10.69 million, up 21.5% year-over-year. This included approximately $1.0 million in sales of our new Cordyceps powder solution product, which was initially distributed within our current specialty nutraceuticals stores channels located in Harbin as a part of its testing phase. Sales of our 210ml and 310ml beverage offerings closed at $1.75 million, down 31.0% year-over-year due to the product line realignment to meet the market demand. Organic and specialty foods segment, our third consumer product category, experienced sales growth of 4.1%, contributing $0.56 million to revenues."

Ms. Han continued, "Overall, we're delighted with the outcome of the second quarter and first six months of the year � both periods marked by continued strong margins and an overall increase in revenue thanks to continued Cordyceps demand and the introduction of our new soluble, powder solution product. This synergistic soluble on-the-go Cordyceps product we believe has the potential to take Nutrastar to the next level - the international market � which we are extremely excited about. In terms of strategy, we were fortunate to bring on Beijing Meilitianhe Fortune Investment Management Co., Ltd. ("MLTH") as a strategic investor through a private share transaction in late June. This development not only further diversified management's holdings, but also aided us in expanding our reach and opportunity in China. MLTH has been instrumental in introducing and helping us secure our first distributor in Hubei for the new Cordyceps powder solution product, and are confident there will be more opportunities like this coming our way."

"As it stands now, we remain the single largest producer of commercially cultivated Cordyceps Militaris. Continued Cordyceps demand coupled with the introduction of exciting products and a broadening in our geographical reach will facilitate future expansion and allow us to achieve key milestones set forth in our long-term growth plan including extending our market presence well-beyond China. We will keep the public and shareholders apprised of our development progress with these initiatives and in all other areas of our business as we are able to, and encourage any interested party to reach out directly for more information on the Company and our innovative, premium consumer product portfolio," added Ms. Han.

Outlook for the Year Ending December 31, 2014

Based on management's current expectations, full year 2014 revenue should fall in the range of $47 million to $50 million, representing an approximate 8% to 15% year-over-year top line growth.

HARBIN, China, July 31, 2014 /PRNewswire/ -- Nutrastar International Inc. (OTCQB: NUIN; "Nutrastar" or the "Company"), a leading producer and supplier of premium branded consumer products, including commercially cultivated Cordyceps Militaris ("Cordyceps"), health beverages and organic and specialty foods, today announced the signing of its first distributor for its new Cordyceps powder solution product and its expansion to Hubei Province located in the eastern part of Central China.

The contract with the new distributor, Hubei Quandu Aiwan Health Industry Co., Ltd. ("Aiwan") was signed on July 16, 2014 and is for an initial period of one year (subject to additional extension or renewal thereafter) with a commitment of up to RMB 20 million per year (US $3.2 million) for the Cordyceps' powder solution product only. Introduced by Beijing MLTH Fortune Investment Management Co., Ltd. (MLTH), the strategic investor that participated in the Company's June 2014 private transaction, Aiwan distributes healthcare related products throughout the region.

Through the new distributor, Nutrastar's premium Cordyceps powder solution product will be distributed to targeted specialty nutraceuticals stores and supermarkets. The soluble Cordyceps product will come in a 140g per box size and will be used as a nutritional supplement for health-conscious consumers "on-the-go".

Hubei, a province with a 2010 population of approximately 57 million, is known to support industries that include automobiles, machinery, power generation, and high-tech commodities. Wuhan, the provincial capital and largest city with a 2010 population of approximately 9.8 million, is a major transportation thoroughfare and the political, cultural, and economic hub of Central China.

Ms. Lianyun Han, Nutrastar's Chief Executive Officer, commented, "The signing of this distributor is encouraging and exciting for the Company and for our shareholders for many reasons. First, it marks the completion and launch of our new exciting consumer product � our Cordyceps powder solution � which we hope will be the initial product to open Nutrastar up to consumers internationally including those located in the U.S. Second, it marks the Company's first entry into Central China, a regional market we feel has great growth potential for our entire product portfolio. And third, it solidifies the reasons why we brought on MLTH as a strategic investor. MLTH's introduction to Aiwan was pivotal in securing the initial distribution contract for our new soluble Cordyceps product, and for facilitating our entry into this large growing market."

Mr. Baiqing Su, General Partner of MLTH, stated, "As stated in the press release last month, Nutrastar's leading market position in the production and sale of commercial Cordyceps throughout China and continued ability to grow market share, while introducing new and exciting complementary products, is impressive. We were pleased to make the introduction to Aiwan, and are committed to doing all that we can to help Nutrastar continue to grow its market share moving forward."

HARBIN, China, June 26, 2014 /PRNewswire/ -- Nutrastar International Inc. (OTCQB: NUIN; "Nutrastar" or the "Company"), a leading producer and supplier of premium branded consumer products, including commercially cultivated Cordyceps Militaris ("Cordyceps"), health beverages, and organic and specialty foods, today announced that its CEO, Ms. Lianyun Han, has completed two strategic private share purchasetransactions for a total of 1.9 million shares, reducing her ownership and voting power in the Company from approximately 46.9% to approximately 36.0% on a fully diluted basis.

The first transaction of 300,000 restricted shares at a previously negotiated purchase price of $1.40 per share was completed with its long-term and value-added shareholder, Accretive Capital Partners ("Accretive Capital"), a private investment fund founded and managed by Richard Fearon, an active member of Nutrastar's Board of Directors. Founded in 2000, Accretive Capital targets undervalued small and micro-cap public companies that represent attractive take-private candidates. The fund has been nationally ranked by Morningstar, Barron's Magazine, Bloomberg, Lipper, and Barclay Managed Funds, was recipient of HFM Week Magazine's 2011 Best Single Manager Long-Term Performance award among all U.S. hedge funds under $250 million, and was named finalist for PAM Magazine's 2014 Best Wealth Manager Long-Term Performance award.

Post transaction, Accretive Capital's ownership increased from 10.4% to approximately 12.0% on a fully-diluted basis. The fund has grown its position in Nutrastar since first investing in January 2011 and has been a value-added partner for over three years. Richard Fearon, Founder and Managing Partner of Accretive Capital and member of Nutrastar's Board of Directors, commented, "We are pleased to increase our investment at this pivotal point in Nutrastar's evolution into a global nutraceutical supplier. Our team is focused on helping Nutrastar penetrate new markets internationally while sustaining its impressive expansion domestically, and we are committed to offering continued strategic and financial guidance."

The second transaction of 1.6 million restricted shares at a negotiated purchase price of $2.00 per share was completed with Beijing MLTH Fortune Investment Management Co., Ltd. (MLTH) for 1 million shares and with two affiliated investors for 600,000 shares. MLTH is a specialized fund management company with approximately RMB1.1 billion under management. The fund and its managing partner have developed key strategic relationships and partnerships with many pharmaceutical and nutraceutical companies in China, including Harbin Pharmaceutical Group, Dalian Hui-Li Biological Health Products Co., Ltd., and Heilongjiang Beiqishen High-tech Health Products Co., Ltd. MLTH offers professionally managed investment portfolios for investors throughout China, designed to meet the varying needs, risk profiles and time frames of each investor.

Post transaction, the combined ownership of MLTH and the affiliated investors equates to approximately 9.1% on a fully-diluted basis. Mr. Baiqing Su, General Partner of MLTH, stated, "After careful consideration and extensive due diligence, we approached the company to gauge their interest in accommodating a strategic investment from our fund. From the very beginning, and after meeting with management, we have been keenly interested in Nutrastar's growth opportunities. We are particularly impressed by the company's leading market position in the production and sale of commercial Cordyceps throughout China and its continued ability to grow market share while introducing new and exciting complementary products. We look forward to working with Nutrastar as they expand domestically and to supporting them as they enter western markets and begin competing internationally. We are thankful that Ms. Han shares our vision and has the confidence in us as a strategic partner to allow us to purchase a portion of her shares."

Ms. Lianyun Han, Nutrastar's Chief Executive Officer, commented, "In response to continued investor concerns over my voting power and the request for shares to purchase, we decided to further reduce my holdings in the Company. I am pleased to hand-over these shares to our long-time shareholder and partner, Accretive Capital, and to our new strategic shareholders, MLTH and their affiliated parties, both of which are highly devoted to seeing Nutrastar succeed domestically and internationally."

Ms. Han continued, "We would like to thank Accretive for its continued guidance, support, and belief in our Company and the enormous potential of our products as demonstrated, yet again, by their increased ownership in Nutrastar. Moreover, we would like to welcome MLTH to the group. Having several large players in the consumer, health, nutraceutical, and pharmaceutical space in China as clients and an active presence in those markets, MLTH will not only be a long-term investor key to our growth, but also a strategic partner to the Company, which will be instrumental in helping us to meet and expand upon our defined growth initiatives."

Fourth Quarter 2013 Results

• Net revenue was $43.35 million, an increase of 17.9% from $36.7 million in 2012.
• EPS was $0.41 compared to $0.34 for the same quarter 2012.

"We are pleased to report augmented sales in each of our consumer product categories for the full year 2013. Cordyceps product sales were up $5.94 million or 21.4% year-over-year. Functional health beverages containing Cordyceps and organic specialty foods, our ancillary consumer product categories, saw an 8.2% and 3.6% sales increase, respectively. As a whole, revenue was $43.35 million, up 17.9%, just short of our forecasted revenue of between $44 and $46 million due to a push out of the anticipated ramp up of our organic and specialty food business. As seen in past years, growing demand within China for our core consumer product Cordyceps was the primary driver of our overall increase in revenue.

As for our bottom line, we continue to operate at highly efficient and profitable levels, and see improvements in cost and operations. For the year ended December 31, 2013, gross profit and net income, as a percentage of revenue, increased to 77.8% and 51.1%, from 76.2% and 46.9%, respectively. Aiding in this improvement was the Q1 2013 completion of our multi-phase, multi-year production capacity expansion project. For the year 2013, we were at approximately 91 tons capacity and expect to hit the upper 90's by the end of 2014," Ms. Lianyun Han, CEO of Nutrastar, commented.

Ms. Han continued, "Right now, while we are in an excellent position to capitalize on numerous opportunities with the Chinese consumer product market, our focus remains steadfast on growing our core consumer product offerings. As the largest producer of commercially cultivated Cordyceps Militaris, we are keenly aware of market demand and are confident in our ability to stay on top of the competition particularly within China. As mentioned in our third quarter 2013 results, we are actively working towards expanding into the international market with our in-development Cordyceps capsules and tablets, designed to complement our current premium consumer product offering and cater to our everyday customer looking for an on-the-go health supplement similar to other vitamin-type supplements. This is a huge milestone we expect to achieve in 2015."

On the subject of the Company's financial position and growth ahead, Ms. Han added, "We closed the year with a cash balance of approximately $102.6 million. This cash balance was vouched and verified by our independent auditor, and is earmarked the Company's future organic and inorganic growth initiatives such as continued capacity expansion, brand and product development, marketing & advertising, any potential strategic and synergistic acquisitions. With the proper, intelligent allocation of funds, we will continue building greater market awareness for our premium Cordyceps consumer products in China and ease our way into the international market with Cordyceps in tablet and capsule form."

Business Outlook

Based on management's current expectations, full year 2014 revenue should fall in the range of $47 million to $50 million, representing an approximate 8% to 15% top line increase year-over-year.

Third Quarter 2013 Financial Results

• Net revenue increased 44.4% to $10.94 million, up from $7.57 million in the three months ended September 30, 2012. 
• Basic and diluted EPS were $0.36 and $0.34, respectively vs. last years $0.24 and $0.23 with 15.92 million basic and 17.06 million diluted shares outstanding. 

"In the three and nine months ended September 20, 2013, our numbers reflected continued and significant growth in sales, gross profit, and income. Gross margin further improved to 80.3% in the third quarter thanks to our increased capacity as well as an attractive product mix comprised mainly of our high margin commercially cultivated Cordyceps. Cordyceps, functional health beverage and organic specialty food sales specifically were up 48.5%, 39.7% and 5.9%, respectively, in the third quarter of 2013 versus the comparable 2012 quarter. Increases in sales this quarter came from increased capacity as well as company-led marketing initiatives," stated, Ms. Lianyun Han, CEO of Nutrastar.

Ms. Han continued, "With the production means necessary to expand our market, we are focused on further extending our brand awareness and product offering to better and more comprehensively serve our customers. Prior launched marketing campaigns are working to promote the health benefits of our premium consumer products, especially our on-the-go functional health beverage and instant soluble drink. We also began testing sales of our instant soluble drink at the Bao Feng specialty drug store in Harbin for an initial trial period of up to six months that began this month. Bao Feng is a direct consumer specialty drug store that has approximately 1,000 stores nationwide. Depending on how sales do in the trial store, this may or may not be a channel for us moving forward. On the new product front, we have started developing Cordyceps capsules and tablets, designed to complement our current premium consumer product offering and cater to our everyday customer looking for an on-the-go health supplement similar to other vitamin-type supplements. It's estimated that the product development process for both capsules and tablets will take approximately 12 - 18 months to complete."

In closing, Ms. Han stated, "With consumer demand for our premium products remaining strong and persistent, particularly among the wealthier and aging population, we are quite confident in our ability to meet our full year revenue guidance and continue to grow thereafter. We look forward to updating our shareholders and the investment community on our progress in these areas and more in the time ahead."

Second Quarter 2013 Financial Results

• Net revenue increased 18.3% to $11.87 million, compared to $10.04 million in the three months ended June 30, 2012.
• Gross profit increased 20.9% to $9.14 million, up from $7.56 million in the comparable 2012 quarter.
• Gross margin was 77% compared with 75.4% in the second quarter 2012.
• Net income was $5.96 million, up 21.7% from $4.90 million recorded in Q2 2012.
• Basic and diluted EPS were $0.37 and $0.35, respectively, with 15.86 million basic and 16.99 million diluted shares outstanding.

Management Commentary

"In line with expectations, our financial results showed continued top-line growth, coupled with the robust progression of our bottom line. Gross margin expanded in the second quarter by 1.6% as a result of economics of scale due to increased capacity as well as an attractive product mix. The majority of revenues, roughly 74% in Q2, stemmed from our higher margin commercially cultivated Cordyceps, which saw sales hit $8.8 million, up 17.1% year-over-year. Premium functional health beverages contributed $2.5 million in the quarter, up 26.7% as a result of prior company-led marketing initiatives specifically designed to grow this market," stated, Ms. Lianyun Han, CEO of Nutrastar.

Ms. Han continued, "As for the remainder of the year, we are confident in the continuation of our growth and expect to meet our full year 2013 revenue guidance. Demand for our premium consumer products remains steadfast and robust, especially among the affluent and elderly population. We remain committed to expanding our market, growing our brand awareness and bringing more products into the hands of health-conscious consumers. To this end, we plan to embark on new, fresh campaigns geared towards better informing and promoting the health benefits of our premium consumer products, especially our on-the-go functional health beverages and instant soluble drinks, which we believe will be key market drivers in the future. We look forward to updating our shareholders and the investment community on our progress on these initiatives in the coming months. Nutrastar is committed to full disclosure, we encourage any interested investor to visit our Cordyceps production facilities and experience the company's products firsthand."

Financial Guidance

Based on management's current expectations, the Company maintains its expectation that 2013 revenue will be in the range of $44 million to $46 million, representing an approximate 19% to 25% top line increase over last year.

First Quarter 2013 Financial Results

• Net revenue increased 8.0% to $7.41 million, as compared to $6.86 million in the quarter ended March 31, 2012.
• Gross profit increased 11.0% to $5.64 million, up from $5.08 million in the comparable 2012 quarter, representing a gross margin of 76.1%.
• Net income was $3.41 million, as compared to $2.95 million in Q1 2012.
• Basic and diluted EPS were $0.21 and $0.20, respectively, with 15.86 million basic shares and 16.99 million diluted shares outstanding

Management Commentary

"Nutrastar's first quarter 2013 was marked by continued sales growth, increased profitability and a growing balance sheet. Commercially cultivated Cordyceps, our core consumer product business, saw a year-over-year sales increase of 11.4%. Our functional health beverages and organic specialty products businesses experienced a sales decrease of 7.9% and 1.1% in the quarter, respectively, due to the timing of the reorder cycle from the beverage distributors. As a percentage of revenue, gross profit increased by 2% year-over-year, reaching 76.1%. As expected, we saw a slight improvement in our cost of goods sold on a percentage basis resulting from our increased production capacity and utilization. Our cash balance at the end of the quarter remained at a strong $77.9 million or approximately $4.59 per diluted share, as seen and verified at the bank by our independent auditor," stated, Ms. Lianyun Han, CEO of Nutrastar.

Ms. Han continued, "Looking into Q2 and the remainder of 2013, we are confident in our ability to maintain our upward momentum and capitalize on rising demand stemming from China's young, increasing affluent and aging populations. Strategic advertising and marketing initiatives will remain steadfast and continue to be aimed at these consumer populations and others. We will continue to seek out and identify new and attractive markets within China for our premium consumer products as well as consider complementary acquisitions that are accretive to the company and our shareholders."

Outlook for the Year Ending December 31, 2013

Based on management's current expectations, the Company maintains its expectation that 2013 revenue will be in the range of $44 million to $46 million, representing an approximate 19% to 25% top line increase year-over-year.

Second Quarter 2012 Results

• Net revenue was $10.04 million, an increase of 30.6% from $7.68 million in the quarter ended June 30, 2011. 
• Gross profit increased 27.2% to $7.56 million, up from $5.95 million in the comparable 2011 quarter, representing a gross margin of 75.4%. 
• Net income was $4.90 million, up 25.6% from $3.90 million in Q2 2011.
• Basic and diluted EPS were $0.31 and $0.30, respectively compared to $.0.26 and $0.24 in prior year period.

"We are quite pleased with our progress in the second quarter and first six months of 2012. While tough macroeconomic conditions remained steadfast, we continued to execute on our growth strategy and yield lucrative results," Ms. Lianyun Han, CEO of Nutrastar, commented. "By focusing on growing our sales volume through existing distribution channels, we saw revenue from product sales reach $10.04 million in second quarter, up 30.6% year-over-year and $16.9 million in the first six months, up 25.3% year over year. Demand for both our core consumer product Cordyceps and functional health drinks stayed strong with second quarter sales up 23.8% and 76.8% from the comparable 2011 period, respectively. Moreover, net income rose 25.6% in the second quarter and 13.6% in the first six months, while gross margin came in at a robust 75.4%, good indications of a strong and growing business."

Commenting on the company's cash position, Ms. Han stated, "As noted in our filings with the Securities & Exchange Commission and verified by our independent auditor, we've had and continue to have an extremely solid balance sheet, comprised of very little debt and a substantial cash position. Amidst volatile financial markets and an uncertain future, our strong balance sheet and large cash position, roughly $3.90 per diluted share, puts us in a powerful position as a company and opens the doors of opportunity that might not otherwise be present. It's important that we continue to manage this cash wisely and conservatively and use it towards growing the business organically and through acquisition if the right opportunities present themselves."

Ms. Han added, "Looking ahead, in terms of production capacity, our Cordyceps expansion project is expected to stay on track throughout the rest of 2012 to meet our goal of 100 tons production capacity by end of year 2013, an increase of 14.9% from current levels. We are eagerly awaiting and excited for the completion of this final stage which will allow us to better meet growing demand of our Cordyceps-related consumer products and further strengthen our top and bottom line."

Outlook for the Year Ending December 31, 2012

Based on management's current expectations, it is still believed that revenue will be in the range of $40 million to $44 million, representing an approximate top line increase of 17% to 29% year over year.

Financial Highlights for the Quarter Ended March 31, 2012


• Net revenue increased 18.4% to $6.86 million, as compared to $5.80 million in the quarter ended March 31, 2011.
• Gross profit increased 14.8% to $5.08 million, up from $4.43 million in the comparable 2011 quarter, representing a gross margin of 74.1%.
• Net income was $2.95 million, as compared to $3.01 million in Q1 2011.
• Basic and diluted EPS were $0.19 and $0.18, respectively, with 15.36 million basic shares and 16.51 million diluted shares outstanding.

Ms. Lianyun Han, CEO of Nutrastar, commented, "We are pleased with our performance in the first quarter, ending it with improved sales across all of our product lines, a strong bottom line and a very robust balance sheet. Demand grew across all of our premium consumer product lines. Sales of Cordyceps increased 7.4%, beverages grew 271.5% and organic and specialty foods rose 13.4%, as over the comparable 2011 period. As expected, we saw a slight decline in the gross margin to 74.1% from 76.4% in the first quarter of 2011 due to an increase in sales from our beverage products which have a higher cost of production than our other consumer products."

Ms. Han continued, "Throughout Q1, we made progress further broadening our market presence via marketing initiatives, and expanding our production capacity. We also made headway growing our premium consumer product portfolio with the upcoming addition of a new Cordyceps instant soluble drink powder and an infused alcohol product. We expect to see revenue from these products upon their introduction to the market and are very excited about the potential opportunities these products will afford us and our shareholders down the road."

As for Q2 and remainder of 2012, Ms. Han stated, "Expansion in both capacity and product offering is expected to stay on track and at the forefront of our operational and business development initiatives." Ms. Han added, "We look forward to launching new premium products to the market which we expect, like our entire existing product lines, will be well received within China's growing mass consumer market."

Outlook for the Year Ending December 31, 2012


Based on management's current expectations, it is believed that revenue will be in the range of $40 million to $44 million, representing an approximate top line increase of 17% to 29% year over year.

For more information regarding Nutrastar's financial performance during the quarter ended March 31, 2012, please refer to the Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on or about May 15, 2012. Management is available to discuss the financial results with investors should they have any questions. To arrange a call with the management team, please contact Investor Relations at 305-918-7000.

Full Year 2011 Results

• Revenues increased 41.1% to $34.21 million compared to $24.24 million in the year ended December 31, 2010. 
• Gross profit increased 32.4% to $25.96 million, up from $19.6 million in the comparable 2010 year, representing a gross margin of 75.9%. 
• Net income rose 26.3% to $17.00 million, up from $13.44 million in 2010, representing a net margin of 49.7%. 
• Basic and diluted EPS were $1.12 and $1.04, respectively with 14.78 million basic shares and 16.34 million diluted shares outstanding. 

Ms. Lianyun Han, CEO of Nutrastar, commented, "2011 marked another year of record sales for Nutrastar. With Chinese consumer demand for our premium products remaining strong, we met our revenue guidance for the year with total revenues reaching $34.21 million, up 41% year-over-year. Orders for our core consumer product, Cordyceps remained robust, contributing $25.34 million to our top line, while our organic and specialty food business contributed roughly $2.02 million. As a result of our marketing and branding efforts, our functional health beverages saw sales grow to $6.85 million for 2011 with $3.38 million in sales recorded in the fourth quarter alone, up 60% from third quarter sales of $2.11 million. While still high, gross margins declined to 75.9% from 80.9% in 2010 due to the increased contribution of our beverage products which incur a higher cost of production than our core consumer product, Cordyceps."

"In addition to sales growth, Nutrastar was active in corporate and product development initiatives. In 2011, we adopted a share repurchase program in August and grew our internal Cordyceps production capacity to 72 tons representing an increase of 30%," stated Ms. Han. "We are also in the process of strategically diversifying our product offerings with the addition of an instant soluble drink powder as well as a forthcoming variety of organic products stemming from the sizeable expansion of our organic & specialty foods business that is currently underway. We expect to see a revenue stream from these products in the near future."

Commenting on 2012, Ms. Han stated, "We foresee a continuation of our production capacity expansion, solid sales of our core consumer product, Cordyceps, growing sales of both our functional health beverages and organic & specialty foods, and the introduction of new premium consumer products to the market such as our Cordyceps-infused alcohol product. We also expect, with market and regulatory conditions permitting, to continue to purchase additional shares under our share repurchase program. Armed with augmented capacity, in-demand consumer products and the expectation of new premium consumer products being introduced to the market, we are confident that 2012 will be an even better year for Nutrastar than the previous."

Outlook for the Year Ending December 31, 2012

Based on management's current expectations, the Company maintains its belief that revenue will be in the range of $40 million to $44 million, representing an approximate 17% to 29% top line increase year over year.

HARBIN, China, February 13, 2012 /PRNewswire-Asia-FirstCall/ -- Nutrastar International Inc. (OTCBB: NUIN; "Nutrastar" or the "Company"), a leading China based producer and supplier of premium branded consumer products including commercially cultivated Cordyceps Militaris and functional health beverages, today announced that the Company has recently expanded its consumer product portfolio with the addition of an instant soluble powder version of their premium beverage.

Ms. Lianyun Han, Founder and Chief Executive Officer of Nutrastar commented, "We are excited to bring this instant soluble powder Cordyceps drink to market. Being a leading provider of premium Cordyceps consumer products, we must continue to innovate and find new ways to attract and meet the demands of Chinese consumers while growing both our top and bottom line. We believe this instant soluble powder version falls in line with our goals and will complement our existing high-margin, premium consumer product portfolio."

The new instant soluble powder Cordyceps drink dissolves quickly in either hot, tepid or cold water. The initial distribution plan for the new instant soluble powder drink product will be to the Company's existing high-end channels with new channels currently being developed.

The product has undergone multiple consumer trial tests in a variety of markets and has seen encouraging receptivity in the those markets. Moreover, the product received testing report certification for agro-product safety and environment quality in September 2011. The Company expects to officially launch the product in select Chinese cities by the second quarter of 2012.

Third Quarter 2011 Results

HARBIN, China, May 4, 2011 /PRNewswire-Asia-FirstCall/ -- Nutrastar International Inc. (OTCBB: NUIN; "Nutrastar" or the "Company"), a leading producer and supplier of premium branded Traditional Chinese Medicine ("TCM") consumer products, today announced that it has expanded its distribution, signing new distribution contract for its value-oriented "Ban Ke Chong Cao" health drink and new entry-level "Yang Yang Ba" health drink. Beginning in May 2011, the drinks will be available in twenty-seven convenience stores located in Yancheng City.

Yancheng is located in northern Jiangsu with a population of approximately 8 million. With the distributor in place, Nutrastar beverage products are now available in 4 cities in Jiangsu.

The Yancheng contract is a milestone for the company in that it represents the first step in the national rollout of the Company's value and entry-level beverage products. These products add to the Company's existing portfolio of mid-range and high-end products available through Nutrastar's distribution network. All drink variations are also available in the company's specialty store located in Daqing City, Heilongjiang Province.

Ms. Lianyun Han, CEO and Founder of Nutrastar, commented, "The addition of Yancheng to our distribution network is an important step in our expansion into China's consumer functional drink market. The new channel will further increase our company's brand visibility and we are excited to use it to debut our entry-level and mid-range drink at an affordable price point. We will continue to build our distribution networks within Jiangsu and in other regions of China, and keep the investment community updated when such arrangements are finalized."

Year End Results and Guidance:

• Total revenue generated from sales of Nutrastar's consumer products was $24.24 million, an increase of $8.91 million or 58.1% from approximately $15.33 million for the same period in 2009
• Overall gross profit was $19.6 million, an increase of $8.84 million or 82% from approximately $10.77 million during the same period in 2009
• Net income was $13.44 million, an increase of $5.7 million or 73.7% from $7.74 million in the full year 2009.
• Basic and diluted EPS for the year ended December 31, 2010 was $0.80 and $0.79, based on 14.33 million and 14.48 million shares outstanding, respectively, an increase of $0.21 per basic and diluted share from the same period in 2009 when there were approximately 13.13 million basic and 13.34 million diluted shares outstanding.

Commenting on the annual results, Ms. Han stated, "2010 was a year of great strides and accomplishments for our Company. Having successfully completed a significant portion of our capacity expansion plan, we've now brought our annual capacity to 72 tons going into 2011. Capacity expansion will continue through 2011 and 2012 and upon completion of the current plan, we expect capacity to reach over 100 tons going into year 2013. Nutrastar saw the highest recorded sales of our core Cordyceps products, hitting $22.04 million for the year. Cordyceps products, especially our high-margin, small packaged products, have continued to see strong sales growth and steady order flow. Earnings per share have continued to rise significantly, resulting in increased value to our shareholders."

For the year ending December 31, 2011, based on management's current expectations, revenue will be in the range of $32.0 million to $36.0 million.  The company intends to utilize its existing cash position for capacity expansion, marketing and distribution of its new beverage products and general corporate purposes.

HARBIN, China, Feb. 8, 2011 /PRNewswire-Asia-FirstCall/ -- Nutrastar International Inc. announced today that it has expanded distribution for its functional health drink to include numerous hotels and restaurants in Changzhou, Jiangsu Province.

"The hospitality and restaurant industry has the potential to be a very lucrative market for our premium beverage product. The addition of these new distribution channels to include select hotels and restaurants not only gives our Ban Ke Chong Cao product access to more consumers on a daily basis, but also lays the groundwork for building the Ban Ke Chong Cao brand among one of our key target customer segments. We look forward to continuing to explore the hospitality and restaurant market as we expand our distribution channels in Jiangsu and across China," commented Ms. Lianyun Han, Founder and Chief Executive Officer of Nutrastar.

The new channels expand Nutrastar's "Ban Ke Chong Cao" drink presence to now over 90 Points of Sale ("POS") withinChangzhou, including more than 50 supermarkets and convenience stores, 29 hotels and 10 restaurants. Changzhou, the site of the drink's initial rollout in Q4 2010, is situated in China's affluent Yangtze Delta region about 160 kilometers west ofShanghai and has a population of roughly 4.5 million people.

In December 2010, Nutrastar signed agreements with key distributors in Wuxi and Nantong, major cities in China's affluent Jiangsu province, with populations of 4.6 million and 7.7 million, respectively. Through the agreements, Nutrastar's new 210ml functional Golden Grass health drink products under its Chinese brand name "Ban Ke Chong Cao" will be available in Parkson and other retail locations in Wuxi and in wholesale markets in Nantong.

"Wuxi and Nantong are fast growing metropolitan areas with robust economies and brand-conscious consumers," commented Ms. Lianyun Han, Founder and Chief Executive Officer of Nutrastar. "With approximately 12 million people between the two cities, this is a natural extension of our initial rollout of Ban Ke Chong Cao in Jiangsu Province. We are excited to be entering these burgeoning new markets and look forward to expanding our distribution to additional key regions and cities in 2011."

/PRNewswire-Asia/ -- Nutrastar International Inc. today announced that it has completed its 2010 expansion plans, increasing annual production capacity from 55 tons to 72 tons.

As disclosed in August 2010, in order to expand the Company's branded Chinese Golden Grass product offerings and to meet the raw material demand needed to effectively launch new functional health drink products, the Company planned to increase production capacity to 72 tons by the end of 2010 and to over 100 tons by the end of 2012. The 2010 expansion plans were successfully completed by bringing online three additional production facilities at the Company's production base in Heilongjiang, China.

Ms. Lianyun Han, Founder and Chief Executive Officer of Nutrastar commented, "We are thrilled to have completed this significant expansion project, which increases our annual production capacity by over 30%. This will allow us to continue to expand our product pipeline and market share in the TCM consumer products market."  She added, "Our new functional health drinks containing Chinese Golden Grass are now in more than 50 supermarkets and convenience stores in the city of Changzhou, Jiangsu Province. We are looking forward to further expanding distribution of our beverage and other consumer products in 2011."

Financial Highlights for the Three Months Ended September 30, 2010:

• Recorded revenues of $6.46 million, an 81.2% increase Year-Over-Year
• Gross profit of $5.28 million, an increase of $2.51 million or 90.6% Year-Over-Year
• Net income rises 100.4% Year-Over-Year to $4.07 million, representing a net margin of 62.9%
• Basic earnings per share ("EPS") increases to $0.28; Diluted EPS increases to $0.25 vs. $0.15.

Ms. Lianyun Han, President and Chief Executive Officer of Nutrastar commented, "We are very pleased by Nutrastar's most recent three month and nine month financial performance, posting record sales of our golden grass products and earnings for our shareholders. Chinese Golden Grass products, especially our high margin, small packaged products, have seen steady, healthy sales volume and order flow."

Ms. Han continued, "In the third quarter not only did the Company outperform financially, but we have continued to make strides growing our manufacturing capabilities, expanding our TCM consumer product line and geographical reach, and improving our investor relations and corporate governance efforts. As announced early in the quarter, we are in the midst of expanding our production capacity to 72 tons by the end of 2010. We believe we are well on the way to meeting this goal. We announced in July 2010 the signing of a product purchase agreement with Century Brighton Holdings, which will further expand our TCM customer base and penetration into the wealthy Hong Kong market. We have been well received in this market and look forward to continued growth on both the product side and customer side. The development of our Golden Grass wine and oral liquids are on track and is expected to commence trial production in Q1 2011."

Ms. Han further commented, "So far in the fourth quarter, we began the initial rollout of our functional health drink with the signing of a key distributor in Changzhou city. We are very excited to be bringing this TCM based health beverage to the public market and look forward to further expanding its presence in other key areas and cities in China. With our new TCM functional health drink product line and the continued growth of our commercially cultivated Golden Grass product line, we expect to further expand our market position as a leading producer and supplier of premium TCM consumer products."

Recent Events

On October 5, 2010, the Company elected Mr. Henry Ngan, Ms. Virginia P'an and Mr. Jianbing Zhong as independent directors.  As a result, the majority of the Company's board members are now independent.  Each newly elected independent director was also appointed to the newly established Audit Committee, Compensation Committee and Governance and Nominating Committee of the board of directors of the Company.  Mr. Ngan was appointed as the Chair of the Audit Committee, Ms. P'an was appointed as the Chair of the Compensation Committee and Mr. Zhong was appointed as the Chair of the Governance and Nominating Committee.

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.

Financial Highlights for the Three Months Ended June 30, 2010:

• Revenues increase 63.4%.
  
• Gross margin increases 19.1% to 83.7%.
  
• Net income was $3.42 million, an increase of $1.92 million, or 127.7%.
  
• Basic and diluted earnings per share for both quarters ended June 30, 2010 and 2009 was $0.12.

Ms. Lianyun Han, President and Chief Executive Officer of Nutrastar commented, "Nutrastar's performance in the second quarter was exceptional. We saw heightened consumer demand for our Golden Grass products, especially our high margin, small packaged products. This significant increase in sales suggests that consumer knowledge of the medicinal benefits of Chinese Golden Grass is gaining traction and the nutraceutical market in China is growing at a healthy rate. On a quarterly basis, revenues increased by roughly 63.4% and EPS reached $0.12, outstanding growth given the current volatile economic environment."

Ms. Han continued, "Since the second quarter ended, we announced a few important measures that will prepare the company for significant expansion and growth in the time ahead:

• We plan to expand our manufacturing capabilities by over 30%, increasing our production capacity to 72 tons by the end of 2010.
• In addition to expanding our production capacity, we are also continuously seeking to further our geographical footprint and diversify our Golden Grass product pipeline.
• We announced in July 2010 the signing of a product purchase agreement with Century Brighton Holdings, which will further expand our customer base and penetration into the lucrative Hong Kong market.
• We also announced the patent application of our Golden Grass wine and oral liquids which we anticipate will be in trial production in Q1 2011.

It's expected that with our increased production capabilities, continued efforts on the R&D side, as well as further expansion of distribution network, Nutrastar will show consistent growth on both the revenue side and product side going forward."

GeoTeam note:

It seems that the company may have inadvertently presented its EPS number incorrectly.  It appears that $0.12 is a GAAP number based on net income of $1,659,654, after subtracting a non-cash item (Beneficial conversion feature of convertible preferred stock 1,742,239.  $3.42 million is the cleaner number and would result in EPS of $0.24. Further, subtracting a warrant gain figure of $131 thousand equates to net income $3.3 million or EPS $0.23.

Also see message board note by Xantu.

The GeoTeam will be tracking the Nutrastar Intl story. The company just reported strong 2009 fourth quarter results:

There are still a few things to iron out:

• Make goods net income targets are not as strong as we would like
• The company needs to raise funds from foreign investors to comply with regulatory requirements surrounding its reverse merger.

Still, with strong commentary and shares trading at a P/E of only 7, we believe the story is worth monitoring for upside surprises.

During 2010, Nutrastar plans to further increase the percentage of total revenue generated through sales of Chinese Golden Grass, both through increased sales of product processed and packaged for the consumer marketplace as well as sales of raw material to the pharmaceutical industry. The Company expects that further product awareness, widespread availability and increased health awareness among Chinese consumers will drive consumer adoption and sales for the Company's Golden Grass.

A major initiative of Nutrastar's future growth strategy is the introduction of new, value-added products targeting multiple downstream markets, including mass consumer, nutraceutical and pharmaceutical markets. After successfully introducing the small package consumer cordyceps products, the Company's growth plan during 2010 will include introducing a new branded specialty beverage product known as "Golden Grass Energy Drink". Commercialization of Golden Grass Energy Drink is scheduled for the second quarter of 2010, targeting affluent, professional, athletic and elderly consumers.

In support of its growth strategies, Nutrastar plans to increase annual production capacity from its current capacity of 55 tons to 65 tons by the end of 2010. Nutrastar operates the world's largest Chinese Golden Grass planting base, and employs patented technology in the cultivation and commercialization of Chinese Golden Grass. The Company also has cutting edge research and development capabilities that drives technology innovation.

"Given our leadership position in a growing market with high barriers to entry, supported by a well known and certified product brand, we are very optimistic about our growth prospects for 2010 and beyond," added Mr. Daniel Lee, CFO. "We anticipate incremental revenue and earnings growth of our higher margin Chinese Golden Grass products. We are very pleased with our progress to grow sales through downstream market applications and look forward to the successful launch of our specialty consumer beverage. In addition, we will be expanding into new pharmaceutical, nutraceutical and mass consumer markets which will bring the Company additional distribution channels, technologies and licensing opportunities, as we aim to become a leading nutraceutical company in China."

The majority stockholder of the Company, New Zealand WAYNE’s Investment Holdings Co., Ltd. agreed to place a total of 1,000,000 shares of the Company’s common stock held by it into escrow to secure the make good obligations:

•  In the event that the Company’s consolidated financial statements reflect less than $9,000,000 of after-tax income for the fiscal year ending December 31, 2010, it will transfer to the Investors, on a pro rata basis, for no additional consideration, 500,000 shares of the Company common stock owned by it
  
• In the event that the Company’s consolidated financial statements reflect less than $11,000,000 of after-tax net income for the fiscal year ending December 31, 2011, it will transfer to the Investors, on a pro rata basis, for no additional consideration, 500,000 shares of the Company’s common stock owned by it.