SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE
   Mail Stop 7010
October 28, 2008

By U.S. Mail and facsimile
 Mr. Yongke Xue Chief Executive Officer SkyPeople Fruit Juice, Inc.  16F, National Development Bank Tower Gaoxin 2
nd Road
Xi’an, People’s Republic of China 710075
Re: SkyPeople Fruit Juice, Inc.
  Amendment No. 2 to Registra tion Statement on Form S-1
Filed October 6, 2008
  File No. 333-149896
Dear Mr. Xue:

We have reviewed your filing and have the following comments. Where
indicated, we think you should re vise your documents in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.
 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

General

1. You will expedite the review proces s if you address each portion of every
numbered comment that appears in this letter.  Provide complete responses and,
where disclosure has changed, indicate precisely where in the marked version of the amendment we will find your responsive changes.  Similarly, to minimize the
likelihood that we will reissue comment s, please make corresponding changes
where applicable throughout your document .  For example, we might comment on

Mr. Yongke Xue
SkyPeople Fruit Juice, Inc.
October 28, 2008 Page 2
one section or example in the document,  but our silence on similar or related
disclosure elsewhere does not relieve you of  the need to make similar revisions
elsewhere as appropriate.

Prospectus Summary – The Company – Registration Righ ts Agreement, page 11

2. We note your liquidated damages due a nd proposed accounting for those damages
on page F-10.  Please quantify the estimated  damages that will incurred under this
registration rights agreement as of the date of your filing.

Prospectus Summary - Our Co rporate Structure, page 15
3. We note that in the organizational char t of the company’s structure, you have
added a footnote about a minority 8.85% e quity interest held by Xi’an Qinmei
Food Co., Ltd. in a subsidiary of the compa ny.  The footnote states that it relates
to “such company”; however, we do not see an asterisk in the chart or any other
mark in the chart to indicate which compa ny is being referenced in the footnote.
Please revise and make corresponding re visions to the other places in the
document where the organizational chart ap pears, such as page 36 and page F-6.
 Risk Factors

 General

4. We note your response to our prior comment  9 and reissue it.  Specifically, we
note that in your Risk Factors you have not  included a discussion of the covenant
in the Stock Purchase Agreement, discu ssed on pages 7 and 43 of the Prospectus,
pursuant to which you are not permitted to issue any preferred stock or
convertible debt for three years as long as Barron Partners LLP and Eos Holdings,
LLC continue to beneficially own 20% of  the Series B Preferred Stock issued
under the Stock Purchase Agreement.
“We may have inadvertently viol ated Section 402 …,” page 22
5. Please advise as to whether the recipien ts of the loans paid interest or other
consideration to the company for the time value of the money that was borrowed.

Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

Results of Operations and Business Outlook

Gross Margin, page 39

Mr. Yongke Xue
SkyPeople Fruit Juice, Inc.
October 28, 2008 Page 3  6. Please revise to disclose what factors contributed to your 100% gross margin from
kiwifruit seed sales for the six months ended June 30, 2008.

Business – Seasonality, page 54

7. We note your response to our prior comment  22 and reissue it.  For example, we
note that on page 54 you still refer to “the squeezing season from August through
February or March of the following year .”  Please revise as appropriate.
 Business – Industry and Principal Markets, pages 54-55

8. We note your response to our prior co mment 25.  Supplementally, please provide
us with independent support for your asse rtions about the following topics, which
were not covered in your res ponse to our prior comment 25:

●  The countries with the current larg est demand for concentrated apple juice
include the United States, EU members, Japan and Russia.

●  The United States is the largest concen trated apple juice co nsuming country in
the world, and the physical volume of trad e of concentrated apple juice in the
United States accounted for about 35% of the world’s total in 2006.
 ●  Concentrated apple juice from Ch ina accounted for approximately 47.7% of
total consumption of concentrated appl e juice in the Unite d States in 2005.
 ●  In 2005, 39% of concentrated apple ju ice consumed in the European market
was from China.  ●  In China, the output of fruit juice and drinks nationwide was approximately
4,816,824 tons in 2004, an increase of 27.95% compared with th at in 2003, and
output increased by 29.17% to 6,000,000 tons in 2005.  From January to October 2006, output was approximately 7,196,692 tons, an increase of 27.96% compared with that of the fi rst 10 months of 2005.
 ●  In 2006, the export volume of concen trated apple juice by Shaanxi Province
was approximately 2,910,000 tons with a value of $212 million, accounting for 44.9% and 46.3% of the total export volume and value, respectively, of
concentrated apple juice from all of the PRC.  ●  At present, the output, output value a nd export volume of concentrated juice of
Shaanxi Province all rank first among ot her provinces and ci ties in China.
If you provide us with third party docu ments in response to this comment, you
can expedite our review process by mark ing by highlighting or other means those

Mr. Yongke Xue
SkyPeople Fruit Juice, Inc.
October 28, 2008 Page 4
portions of the document(s) that support th e various assertions that appear in your
document.
9. We note your response to our prior comment  26.  We note that you did not state in
the Prospectus where investors may obtai n a copy of the data from the United
States Department of Agriculture.  Pleas e revise to include this information.
 Note 2. Summary of Significant Accounting Policies

Consolidation, page F-6

10. We note your analysis supporting your c onclusion that Huludao Wonder Fruit Co
(“Huludao”) is a variable in terest entity (“VIE”).  Please further explain how you
determined that you had a variable intere st in Huludao pursuant to the definition
in paragraph 2.c of FIN 46(R) upon form ation of Huludao.  Please clarify who
owned the equity investment at risk in Huludao at formation and clarify any
material changes in the equity investment  at risk up to June 10, 2008, the date you
acquired Huludao.  Clarify whether you held  an equity investment in Huludao,
i.e., an equity interest th at is required to be report ed as equity in Huludao’s
financial statements.  If Hede owned all or a majority of the equity in Huludao,
please explain why they would not conso lidate Huludao pursuant to SFAS 94.  In
this respect, explain how you determined  that Hede did not control Huludao.
 11. With respect to your analysis of FIN 46R, please further clarify the following:

• Explain how Shaanxi Tianren participated  significantly in the arrangement of
the transaction.
• Explain why Shaanxi Tianren would be required to provide additional
financial support to Hede.  Clarify wh ether Shaanxi would be required to
provide additional financial support to Hede based upon the contractual
provisions of the loan agreement.
• Explain in detail the terms that or the lease agreement between Shaanxi Tianren and Hede and how this agreemen t was evaluated in your analysis.
• Explain why you assumed that Shaanxi Ti anren would absorb the losses and
receive the expected return s of Huludao if Shaanxi Tianren did not have an
equity interest in Hulundao.  Pl ease provide your cash flow or other
substantive analysis whic h supports this conclusion.

Revenue Recognition, page F-8

12. We note your response to our prior comme nt 45 and that you have no history of
returned products.  Please revise your disclosure to be more specific on how many
days a customer has a contractual righ t of return and how management has
concluded no provision is necessary for returnable goods.

Mr. Yongke Xue
SkyPeople Fruit Juice, Inc.
October 28, 2008 Page 5

Property, Plant and Equipment, page F-9

13. Please clarify the nature of your $2.6 m illion construction in progress asset.
Explain what asset you are currently c onstructing and how you have determined
that it will have future economic benefit.

Minority Interest in Subsidiary, page F-10
 14.   We note your response to our prior comment 47.  Please provide further analysis
supporting your conclusion that it is appropriate to refl ect the equity of Huludao
as minority interest.  In this respect, we  understand your analysis with respect to
your initial measurement of Huludao, but it is not clear why you have presented
the equity as minority inte rest as of December 31, 2007.
 Note 4. Convertible Preferred Stock, page F-12

15. Your response to prior comment number 48 indicates that you first considered
whether the embedded conversion option a nd warrants issued in connection with
the Series A and B Convertible Preferred stock qualified as derivatives pursuant
to SFAS 133 and EITF 00-19.  Please cl arify how you evaluated the guidance in
paragraph 19 of EITF 00-19, which require s you to have sufficient authorized and
unissued shares available to settle th e contract when determining that the
contracts should be classified in stoc kholders’ equity pursu ant to paragraph
11.a(2) of SFAS 133.  In this respect, we note your response, which states, “the Company lacked a sufficient number of authorized and unissued common shares
to satisfy the negotiated share exchange transaction through the issuance of common stock.”
 16. We note your response to our prior comment  48 with respect to the valuation of
your common stock.  Please clarify why you believe that the purchase price of the
Series A or B preferred st ock less the amount allocated to the warrants provides a
reliable estimate of the fair value of  your common stock.  Explain how you
determined the value allocated to your warrants when preparing this valuation model.  Please clarify why you did not us e a valuation technique which uses an
estimate of future cash flows to estimate the fair value of your common stock.  In
this respect, please clarify how you c onsidered the guidance in the AICPA
Practice Aid “Valuation of Privately-Held -Company Equity Securities Issued as
Compensation” when determining the most appropriate valuation methodology
for your common stock.  As part of your re sponse, tell us the conversion price of
the Series A and B Preferred Stock and the value of your common stock as of
each issuance date.

Mr. Yongke Xue
SkyPeople Fruit Juice, Inc.
October 28, 2008 Page 6  Exhibits, page II-3

17. We note that in your list of Exhib its, you incorporate various documents by
reference to various Form 8-K filings, but you do not specify in each instance
which exhibit to the relevant Form 8-K f iling is being incorporated by reference.
Please revise in each instance to provide a specific reference to the number of the Form 8-K exhibit that is bei ng incorporated by reference.
18. We note that the documents that are inco rporated by reference as your Articles of
Incorporation do not indicat e that the company’s name has been changed to
SkyPeople Fruit Juice, Inc., which suggests that there may be an amendment to
the Articles of Incorporation that is not on file yet or is not on your exhibit list.
Please file any such amendment and update the exhibit list accordingly.
 Closing Comments

As appropriate, please amend your filings in response to these comments.  You
may wish to provide us with marked copies of the amendments to expedite our review.
Please furnish a cover letter with your amendments that keys your responses to our
comments and provides any requested supplemen tal information.  Detailed cover letters
greatly facilitate our review.  Please understand that we may have additional comments
after reviewing your amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
    Notwithstanding our comments, in the ev ent the company requests acceleration of
the effective date of the pending registration statement, it should furnish a letter, at the time of such request, acknowledging that
 ‚ should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any
action with respect to the filing;

‚ the action of the Commission or the staff,  acting pursuant to delegated authority,
in declaring the filing effective, does not relieve the company from its full
responsibility for the adequacy  and accuracy of the disclosure in the filing; and

‚ the company may not assert this action as  a defense in any proceeding initiated by
the Commission or any person under the fe deral securities laws of the United
States.

Mr. Yongke Xue
SkyPeople Fruit Juice, Inc. October 28, 2008 Page 7    In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Di vision of Corporation Finance in connection
with our review of your filing or in response to our comments on your filing.
We will consider a written request for acceleration of the effective date of the
registration statement as a confirmation of th e fact that those reque sting acceleration are
aware of their respective re sponsibilities under the S ecurities Act of 1933 and the
Securities Exchange Act of 1934 as they rela te to the proposed public offering of the
securities specified in the above registration statement.  We will act  on the request and,
pursuant to delegated authority, grant acce leration of the effective date.
  We direct your attention to Rules 460 and 461 regarding requesting acceleration of a registration statement.  Please allow adequa te time after the filing of an amendment for
further review before submitting a request for acceleration.  Please provide this request at
least two business days in advance of the requested effective date.    Please contact Bob Carroll at (202) 551- 3362, or in his absence, Chris White at
(202) 551-3461 if you have any questions regarding the accounting comments or financial statements.  Please contact Norm an Gholson, at (202) 551-3237 or, in his
absence, me at (202) 551-3611 with any other questions.

       S i n c e r e l y ,                  Anne Nguyen Parker        B r a n c h  C h i e f    cc:  Darren Ofsink, Esq. (by facsimile 212-688-7273)  B. Carroll  C. White
N. Gholson