China Biopharma (CBPC) 10-K/A 2007 FY Annual report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10−K/A

(Amendment No.1 to Form 10-KSB)

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2007

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: __________ to ____________

Commission File No.: 000-50005

CHINA BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	04-3703334
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

75 Shuguang Rd., Bldg. B, Hangzhou, China	310007
(Address of Principal Executive Offices)	(Zip Code)

(609) 651-8588

(Registrant's telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE EXCHANGE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, PAR VALUE $0.0001 PER SHARE 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer oSmaller reporting company x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity as of the last business day or registrant’s most recently completed second fiscal quarter. As of June 30, 2007, the value was approximately $3,335,198.

State the number of shares outstanding of each of the issuer’s classes of common equity: 159,377,774 as of March 14, 2008. 

EXPLANATORY NOTE

This report on Form 10-K/A is filed to amend and restate the following items of our Form 10-KSB filed on March 25, 2008 (the “Initial Report”) and includes the complete text of each amended and restated item:

· Part II, Item 8 (“Financial Statements And Supplementary Data”). We have amended the financial statements as of and for the fiscal year ended December 31, 2007 and the notes thereto:

(i) Revised balance sheet, statement of changes in stockholders’ equity and statements of cash flows to reclassify the $698,658 "Due from related parties" and the related Note 7;

(ii) Revised the statement of operations to add a separate line to present “Loss on disposal of investments”;

(iii) Revised the statement of shareholders’ equity to cover the period from September 13, 2000, the date of inception, to December 31, 2007;

(iv) Revised Note 2 - IMPAIRMENT LOSS OF GOODWILL to expand our disclosure as per SFAS 142 and SFAS 144;

(v) Revised Note 2 - INCOME TAXES to expand our disclosure in accordance with SFAS 109;

(vi) Revised Note 6 - EQUITY COMPENSATION PLAN to expand our disclosure in accordance with SFAS 123R;

(vii) Revised Note 10 to provide an update on the status of the event of default;

(viii) Added a schedule to reflect the effect of restatements in Note 11

and;

· Part III, Item 15 (“Exhibits and Financial Statement Schedules”) to provide updated certifications.

TABLE OF CONTENTS

PART II
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1
PART III
ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
SIGNATURES	S-1

PART II

ITEM 8.  FINANCAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

China Biopharma, Inc.:

We have audited the accompanying consolidated balance sheets of China Biopharma, Inc. (a Delaware corporation in the development stage) and subsidiaries (the “Company”) for the years ended December 31, 2007 and 2006, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the years then ended These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the 2007 financial statements referred to above present fairly, in all material respects, the financial position of China Biopharma, Inc. and subsidiaries as of December 31, 2007, and the results of its operations and cash flows for each of the two years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations and is in a working capital deficit position that raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Patrizio & Zhao, LLC

Parsippany, New Jersey

March 5, 2008

(Except Note 2, 6, 7, 10 and 11 as to

which the date is November 10, 2008)

F-1

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEET

	December 31, 2007			December 31, 2006
	(Restated)			(Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,317,556		$	2,307,799
Accounts receivable, net of allowance for doubtful accounts of $1,699 and $53,620 at December 31, 2007 and 2006, respectively		393,171			941,556
Inventory		344			-
Due from related parties		-			151,534
Other receivables		2,865,088			292,578
Deferred compensation cost		160,944			141,900
Advance payments		2,500			2,129,530
Total Current Assets		4,739,603			5,964,897
PROPERTY AND EQUIPMENT, NET		49,432			90,069
INTANGIBLES - GOODWILL		1,456,957			1,761,050
Total Assets	$	6,245,992		$	7,816,016
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,910,670		$	2,722,816
Current portion of long-term debt		-			1,428,572
Loans payable		2,032,216			-
Other Liabilities		1,322,418			43,110
Due to officers		631,488			956,717
Total Current Liabilities		5,896,792			5,151,215
LONG TERM DEBT		-			1,571,429
MINORITY INTEREST		2,083,760			2,229,949
Total Liabilities		7,980,552			8,952,593
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT)				��
Common stock, stated value $.0001, 200,000,000 shares authorized; 159,377,774 and 85,520,000 shares issued and Outstanding at December 31, 2007 and 2006		15,938			8,552
Additional paid-in capital		11,655,858			11,037,136
Deficit accumulated during the development stage		(13,928,196	)		(12,275,115	)
Accumulated other comprehensive income		521,840			92,850
Total Stockholders' Equity (Deficit)		(1,734,560	)		(1,136,577	)
Total Liabilities and Stockholders' Equity (Deficit)	$	6,245,992		$	7,816,016

The accompanying notes are an integral part of these consolidated financial statements.

F-2

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

							For the Period From
	For the Years Ended						September 13, 2000
	December 31,						(Date of Inception) to
	2007			2006			December 31, 2007
	(Restated)			(Restated)			(Restated)
REVENUE	$	688,705		$	1,202,763		$	3,429,426
COST OF GOODS SOLD		615,129			1,074,864			2,454,734
GROSS PROFIT		73,576			127,899			974,692
OPERATING EXPENSES
Research and development		-			-			2,274,698
Selling, general and administrative (including stock-based compensation of $178,052, $2,897,459 and $3,089,122 respectively)		1,379,996			3,752,182			11,403,798
Depreciation and amortization		42,193			38,811			422,377
Impairment loss of goodwill		304,094			-			304,094
Total Operating Expenses		1,726,283			3,790,993			14,404,967
LOSS FROM OPERATIONS		(1,652,707	)		(3,663,094	)		(13,430,275	)
OTHER INCOME (EXPENSE)
Loss from unconsolidated subsidiary		-			-			(60,134	)
Sale of net operating loss carryforwards		-			-			216,247
Gain on foreign currency		-			-			660
Interest income (expense), net		(205,278	)		-			(170,979	)
Loss on disposal of investments		-			(48,142	)		(48,142	)
Non operating income (expenses)		99,164			(316,310	)		(217,146	)
Total Other Income (Expense)		(106,114	)		(364,452	)		(279,494	)
LOSS BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE		(1,758,821	)		(4,027,546	)		(13,709,769	)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX		-			-			(324,167	)
LOSS BEFORE MINORITY INTEREST		(1,758,821	)		(4,027,546	)		(14,033,936	)
MINORITY INTEREST		105,740			-			105,740
NET LOSS		(1,653,081	)		(4,027,546	)		(13,928,196	)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		428,990			40,649			521,840
COMPREHENSIVE LOSS	$	(1,224,091	)	$	(3,986,897	)	$	(13,406,356	)
LOSS PER COMMON SHARE, BASIC	$	(0.01	)	$	(0.05	)
LOSS PER COMMON SHARE, DILUTED	$	(0.01	)	$	(0.05	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC		111,854,932			85,520,000
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, DILUTED		111,854,932			85,520,000

The accompanying notes are an integral part of these consolidated financial statements.

F-3

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

	Preferred Series A Stock						Common Stock									(Deficit)						Accumulated
				$.0001						$.0001			Additional			During			Other			Stockholders’
				Stated						Stated			Paid-In			Development			Comprehensive			Equity
	Shares			Value			Shares			Value			Capital			Stage			Income			(Deficit)
	(Restated)			(Restated)			(Restated)			(Restated)			(Restated)			(Restated)			(Restated)			(Restated)
BALANCE - September 13, 2000 (date of inception)		-		$	-			-		$	-		$	-		$	-		$	-		$	-
Common stock issued in private placement		-			-			63,619,200			6,362			-			(1,562	)		-			4,800
Net loss		-			-			-			-			-			(93,837	)		-			(93,837	)
BALANCE - DECEMBER 31, 2000		-		$	-			63,619,200			6,362			-			(95,399	)		-			(89,037	)
Preferred stock issued in private placement		5,301,600			530			-			-			3,999,470			-			-			4,000,000
Foreign currency translation					-			-			-			-			-			(825	)		(825	)
Net loss		-			-			-			-			-			(1,251,210	)		-			(1,251,210	)
BALANCE - DECEMBER 31, 2001		5,301,600		$	530			63,619,200			6,362			3,999,470			(1,346,609	)		(825	)		2,658,928
Issuance of common stock in consideration
for all of the assets of WCG Communications
LLC		-			-			3,976,200			398			111,465			-			-			111,863
Issuance of preferred stock in consideration for
100% ownership of Zhejiang VSAT Satellite
Communication Co., Ltd.		1,325,400			133			-			-			226,395			-			-			226,528
Foreign currency translation		-			-			-			-			-			-			3,716			3,716
Net loss		-			-			-			-			-			(1,550,180	)		-			(1,550,180	)
BALANCE - DECEMBER 31, 2002		6,627,000		$	663			67,595,400		$	6,760			4,337,330			(2,896,789	)		2,891			1,450,855
Stock issued for services		18,025			2			144,204			14			13,595			-			-			13,611
Foreign currency translation		-			-			-			-			-			(3,155	)		(3,155	)		-
Net loss		-			-			-			-			-			(1,063,842	)		-			(1,063,842	)
BALANCE - DECEMBER 31, 2003		6,645,025		$	665			67,739,604		$	6,774			4,350,925			(3,963,786	)		(264	)		397,469
Repurchase and cancellation of common stock		-			-			(5,725,728	)		(573	)		141			-			-			(432	)
Common stock issued in private placement		-			-			3,340,008			334			503,666			-			-			504,000
Effect of merger and recapitalization		(6,645,025	)		(665	)		14,646,116			1,465			(800	)		-			-			-
Foreign currency translation		-			-			-			-			-			-			(3,262	)		(3,262	)
Net loss		-			-			-			-			-			(1,445,622	)		-			(1,445,622	)
BALANCE - DECEMBER 31, 2004		-		$	-			80,000,000		$	8,000		$	4,853,932		$	(5,406,253	)	$	( 3,526	)	$	( 547,847	)
Common stock issued in private placement		-			-			2,455,000			246			1,669,905			-			-			1,670,151
Foreign currency translation		-			-			-			-			-			-			55,727			55,727
Net loss		-			-			-			-			-			(2,841,316	)		-			(2,841,316	)
BALANCE - DECEMBER 31, 2005		-		$	-			82,455,000		$	8,246		$	6,523,837		$	(8,247,569	)	$	52,201		$	(1,663,285	)
Common stock issued in private placement		-			-			3,065,000			306			4,513,299			-			-			4,513,605
Foreign currency translation		-			-			-			-			-			-			40,649			40,649
Net loss		-			-			-			-			-			(4,027,546	)		-			(4,027,546	)
BALANCE - DECEMBER 31, 2006		-		$	-			85,520,000		$	8,552		$	11,037,136		$	(12,275,115	)	$	92,850		$	(1,136,577	)
Common stock issued in private placement		-			-			73,857,774			7,386			1,317,380			-			-			1,324,766
Reclassification of due from disposed subsidiary														(698,658	)								(698,658	)
Foreign currency translation		-			-			-			-			-			-			428,990			428,990
Net loss		-			-			-			-			-			(1,653,081	)		-			(1,653,081	)
BALANCE - DECEMBER 31, 2007		-		$	-			159,377,774		$	15,938		$	11,655,858		$	(13,928,196	)	$	521,840		$	(1,734,560	)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

							For the Period From
	For the Years Ended						September 13, 2000
	December 31,						(Date of Inception) to
	2007			2006			December 31, 2007
	(Restated)			(Restated)			(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,653,081	)	$	(4,027,546	)	$	(13,928,196	)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation and amortization		42,193			38,811			568,377
Minority interest		(105,740	)		2,229,950			(105,740	)
Impairment loss of goodwill		304,093			-			304,093
Cumulative effect of change in accounting principle		-			-			324,167
Loss on disposal of fixed assets		14,808			-			14,808
Loss on unconsolidated subsidiary		-			-			60,134
Provision for doubtful accounts		-			-			14,326
Loss on foreign currency translation		-			-			(3,526	)
Loss on disposal of investments, net of tax		-			48,142			48,142
Share based interest payment		154,826			-			154,826
Deferred compensation cost		178,052			2,897,459			3,089,122
Bad debt expense		(27,255	)		-			(27,255	)
Changes in assets and liabilities:
Accounts receivable		575,640			(860,731	)		(365,916	)
Inventory		(344	)		-			(344	)
Due from related parties		151,534			108,209			-
Other receivables		(2,572,510	)		(292,578	)		(2,572,510	)
Advance payments		2,127,030			(2,129,530	)		2,127,030
Prepaid expenses and other current assets		-			48,207			-
Other assets		-			45,028			-
Accounts payable and accrued expenses		(812,146	)		1,568,880			1,910,670
Other liabilities		1,279,368			(199,739	)		1,322,478
Total Adjustments		1,309,549			3,502,108			6,862,882
Net Cash Used By Operating Activities		(343,532	)		(525,438	)		(7,065,314	)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in unconsolidated subsidiary		-			-			(409,832	)
Purchase of property and equipment		(16,364	)		(18,349	)		(278,476	)
Net Cash Used In Investing Activities		(16,364	)		(18,349	)		(688,308	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from private placement of common stock		-			932			5,898,583
Repurchase of treasury stock		-			-			(432	)
Net proceeds from convertible debt		-			3,000,000			3,000,000
Reclassification of due from disposed subsidiary		(698,658	)		-			(698,658	)
Net proceeds from exercise of stock options		5,000			-			5,000
Proceeds from officers’ advances		(325,229	)		82,275			549,213
Net Cash Provided (Used) By Financing Activities		(1,018,887	)		3,083,207			8,753,706
EFFECT OF FOREIGN CURRENCY CONVERSION
ON CASH		388,540			(295,229	)		317,472
NET INCEASE (DECREASE) IN CASH		(990,243	)		2,244,191			1,317,556
CASH AND CASH EQUIVALENTS – BEGINNING		2,307,799			63,608			-
CASH AND CASH EQUIVALENTS – ENDING	$	1,317,556		$	2,307,799		$	1,317,556

The accompanying notes are an integral part of these consolidated financial statements.

F-5

CHINA BIOPHARMA, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

China Biopharma, Inc. (“CBI” or “the Company”) is a provider of bio-pharmaceutical products with its focus mainly on the development and marketing of human vaccines and other pharmaceutical products. In 2006, CBI re-focused its business from telecommunications to bio-pharmaceuticals. Currently, CBI develops and distributes its products in China. The Company has established its distribution and development platform in China as a result of its acquisition of its interest in its majority owned subsidiary, Hainan CITIC Bio-pharmaceutical Development Co., Ltd. (“HCBD”) and, as a result of its joint venture with Zhejiang Tianyuan Bio-pharmaceutical Co., Ltd.

The Company was incorporated as Techedge, Inc. (“Techedge”) in Delaware in July 2002 to serve as the successor to the business and interests of BSD Development Partners, LTD. BSD was a Delaware limited partnership formed in 1997 for the purpose of investing in the intellectual property of emerging and established companies BSD merged with Techedge in September 2002. From September 2002 until June 2004, Techedge endeavored to continue the business of BSD and sought to enhance the liquidity of the securities owned by its investors by becoming subject to the reporting requirements of the Exchange Act and by seeking to have its common stock quoted on the OTC Bulletin Board, or OTCBB.

China Quantum Communications, Ltd. ("CQ") was organized on October 4, 2000. The primary business of China Quantum Communications, Ltd. is to provide wireless, VoIP, and value-added communication services to commercial and residential users in the U.S. and China.

On December 29, 2000, CQ purchased 100% of the common stock of China Quantum Communications, Inc., which was formed on September 13, 2000, and China Quantum Communications, Inc. became a wholly owned subsidiary. Based on its controlling interest in China Quantum Communications, Inc., the operating results of China Quantum Communications, Inc. are included in the consolidated results of the Company since December 29, 2000.

On January 21, 2001, CQ formed China Quantum Communications, Ltd. (China), a wholly owned subsidiary. Based on its controlling interest in China Quantum Communications Ltd. (China), the operating results of China Quantum Communications, Ltd. (China) are included in the consolidated results of the Company since January 21, 2001.

In January 2001, CQ purchased 100% ownership of Zhejiang VSAT Satellite Communications Co., Ltd., owned in the majority by the Company's CEO. In September 2002, the Board of Directors authorized the issuance of 1,325,400 shares of Series A preferred stock as final consideration for the transaction. This transaction was accounted for as a purchase pursuant to SFAS Statement No. 141, “Business Combinations". The total purchase price of approximately $226,528, which was based on the fair market value of the assets purchased, was allocated among the various assets purchased in the acquisition.

On June 9, 2004, Techedge, Inc., acquired all of the issued and outstanding stock of China Quantum Communications, Ltd., a Cayman Islands company ("CQ"), pursuant to a Share Exchange Agreement (the "Exchange Agreement"), by and among the Company, the shareholders of the Company, CQ and the shareholders of CQ.

Pursuant to the Exchange Agreement, CQ became a wholly-owned subsidiary of the Company, and in exchange for the CQ shares, the Company issued 72,000,000 shares of its common stock to the shareholders of CQ, representing approximately 90% of the Company's outstanding stock at the time.

F-6

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS (continued)

For accounting purposes, because the Company had become a shell company prior to the share exchange, the share exchange was treated as a recapitalization of the Company. As such, the historical financial information prior to the share exchange is that of CQ and its subsidiaries. Historical share amounts have been restated to reflect the effect of the share exchange.

On January 26, 2006, the Company announced its plans to re-position itself for bio-pharmaceutical and other high growth opportunities in China, while continuing its commercialization of its high potential Mobile Voice over IP solutions.

In conjunction with the Company’s re-positioning plans, on February 27, 2006 the Company entered into an agreement to transfer ownership of its Chinese subsidiary Zheiiang Guang Tong Wang Luo Co., Ltd to third parties. On January 1, 2006, the Company also entered into an agreement to transfer ownership of its U.S. subsidiary China Quantum Communications, Inc. to a former employee.

During the quarter ended June 30, 2006, the Company entered into a Share Exchange Agreement for the purpose of acquiring 100% of the outstanding capital stock of China Biopharma Limited (“CBL”), a Cayman Islands Company, which has rights to invest in Tianyuan Bio-Pharmaceuticals Company, Ltd. and Zhejiang Tianyuan Biotech Co., Ltd. (“ZTBC”). In exchange for 100% of the outstanding capital of CBL, the Company issued a total of 3,000,000 shares of restricted common stock.

On July 14, 2006, Techedge and China Biopharma, Inc. (“CBI”), a Delaware corporation and a wholly-owned subsidiary of Techedge, executed and delivered a Plan and Agreement of Merger whereby the parties agreed to merge CBI with and into Techedge, with Techedge being the surviving corporation. By virtue of, and effective upon the consummation of the Merger, the Certificate of Incorporation of the Company was amended to change its name from “Techedge, Inc.” to “China Biopharma, Inc.” The Merger became effective on August 10, 2006.

Zhejiang Tianyuan Biotech Co., Ltd. (“ZTBC”) is a Sino-US joint Venture between China Biopharma Limited and Zhejiang Tianyuan Bio-pharmaceutical Co., Ltd. (“Zhejiang Tianyuan”). The Company owns 65% of ZTBC and Zhejiang Tianyuan owns 35% of ZTBC. ZTBC was formed on June 24, 2006 and was funded on December 22, 2006. Of the total $3,000,000 initial capitalization of ZTBC, CBL invested $1,950,000 and Zhejiang invested $1,050,000 in cash.

In April 2006, ZTBC acquired 20% of the outstanding stock of HCBD from three individuals in consideration for a payment of $600,000; In August 2006, ZTBC acquired an additional 40% of the outstanding stock of HCBD from CITIC Pharmaceutical and China Biological Engineering Corporation in consideration for a payment of $1,200,000. In December 2006, ZTBC acquired another 10% of the outstanding stock of HCBD from one individual in consideration for a payment of $300,000. The remaining 30% of HCBD is owned by Zhejiang Tianyuan Bio-pharmaceutical Co., Ltd. (20%) and by one of its original owners (10%).

The Company’s products consist of vaccines for preventing and treating various diseases and illnesses in humans, and other pharmaceutical products. Currently, the Company provides and distributes its products in China.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of China Biopharma, Inc. and it’s wholly and majority owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.

REVENUE RECOGNITION

The Company recognizes revenue for its products and services at the time the products and the services are sold and provided to the end user.

F-7

CASH AND CASH EQUIVALENTS

For the purposes of the statements of cash flows, the Company considers cash and cash equivalents to include cash on hand, deposits in banks, and all highly liquid investments with a maturity of three months or less.

ACCOUNTS RECEIVABLE AND BAD DEBT RESERVES

The Company provides credit in the normal course of business. The Company continuously performs credit evaluations of its customers, considering numerous inputs including past payment history, financial condition, and other information. While the Company believes that adequate allowances for doubtful accounts have been provided in the financial statements, it is possible that the Company could experience unexpected credit losses.

The Company provides for an allowance for doubtful accounts equal to the estimated losses that will be incurred in the collection of all receivables. Estimated losses are based on a review of the current status of the existing receivables. The bad debt reserve was $1,699 at December 31, 2007.

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost. Depreciation is provided on the straight-line method over the estimated useful lives of five years. Repairs and maintenance expenditures, which do not extend the useful lives of the related assets, are expensed as incurred.

Under SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets", the Company's long-lived assets are evaluated for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company also assesses these assets for impairment based on their estimated future cash flows. The Company has not incurred any losses in connection with the adoption of this statement.

IMPAIRMENT LOSS OF GOODWILL

The changes in the carrying amount of goodwill for the year ended December 31, 2007, are as follows:

($000s)	Goodwill
Balance as of January 1, 2007	$	1,761
Goodwill acquired during year		—
Impairment losses		(304	)
Balance as of December 31, 2007	$	1,457

The balance as of January 1, 2007 represented goodwill related to acquisition of CBL by CBI, and acquisition of HCBD in China by ZTBC. The goodwill was tested for impairment in the fourth quarter of 2007. Due to the changing environment for vaccine and biopharmaceutical business in China, sales revenue, operating profits and cash flow from vaccine and pharmaceutical distribution business carried out by HCBD were lower than expected in the year of 2007, and such trend leads to a revision of the earnings and cash flow forecast for the next five years. In December 2007, an impairment loss of $304,093 was recognized related to the goodwill from the acquisition of HCBD in China.

The goodwill impairment is determined using a two-step process. First, it requires a comparison of the book value of net assets with the fair value of a reporting unit that has goodwill assigned to it. The Company estimates the fair values of the reporting unit using discounted cash flows. The cash flow forecasts are adjusted by an appropriate discount rate derived from the average capital market risk premium over the risk free rate plus a company specific risk premium at the date of evaluation. If the fair value is determined to be less than book value, a second step is performed to compute the amount of the impairment. In this process, a fair value for goodwill is estimated, based in part on the fair value of the operations used in the first step, and is compared to its carrying value. The shortfall of the fair value below carrying value represents the amount of goodwill impairment. SFAS No. 142 requires goodwill to be tested for impairment annually at the same time every year, and when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. The Company selected December 31 as its annual testing date.

F-8

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

INCOME TAXES

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

For Corporate Income tax purposes, the Company incurred recurring operating losses, and, was not subject to income tax liability pursuant to Chinese tax law. Therefore, no provision for income taxes was made in the consolidated financial statements.

FINANCIAL INSTRUMENTS

The carrying amounts reported in the consolidated balance sheet for China Biopharma, Inc.'s cash, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to the short maturities of these financial instruments.

The carrying amounts reported in the consolidated balance sheets for China Biopharma, Inc.'s amounts recorded as other liabilities and due to officers approximate their values based on current rates at which the Company could borrow funds with similar maturities.

ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising expense was $-0-, $-0- and $159,731 for the years ended December 31, 2007 and 2006 and for the period from September 13, 2000 (date of inception) to December 31, 2007, respectively.

COMPREHENSIVE INCOME (LOSS)

The Company adopted SFAS No. 130, Reporting Comprehensive Income, which establishes rules for the reporting of comprehensive income and its components. In addition to net loss, comprehensive income (loss) includes all changes in equity during a period, except those resulting from investments by and distributions to owners. Items of comprehensive income include foreign currency translation adjustment.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are charged to operations as incurred and amounted to $-0-, $-0-, and $2,274,698 for the years ended December 31, 2007 and 2006 and for the period from September 13, 2000 (date of inception) to December 31, 2007, respectively. Costs consist primarily of salaries and related costs of employees engaged in research, design and development activities, the cost of parts for prototypes and equipment depreciation.

FOREIGN CURRENCY TRANSLATION

Substantially all of the Company's operations are conducted in China and the financial statements are translated from China's Renminbi, the functional currency, into U.S. Dollars in accordance with SFAS No. 52, "Foreign Currency Translation." Accordingly, all foreign currency assets and liabilities are translated at the period-end exchange rate and all revenues and expenses are translated at the average exchange rate for the period.

The effects of translating the financial statements of foreign subsidiaries into U.S. Dollars are reported as a cumulative translation adjustment, a separate component of comprehensive income in stockholder's equity. Foreign currency transaction gains and losses are reported in earnings and consisted of $-0- of gains in 2007, $-0- of gains in 2006 and $660 of gains for the period from September 13, 2000 (date of inception) to December 31, 2007.

F-9

LOSS PER COMMON SHARE, BASIC AND DILUTED

China Biopharma, Inc. accounts for net loss per common share in accordance with the provisions of SFAS No. 128, "Earnings per Share" ("EPS"). SFAS No. 128 requires the disclosure of the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Certain common equivalent shares have been excluded from the computation of diluted EPS since their effect would be anti-dilutive.

CONCENTRATIONS OF BUSINESS AND CREDIT RISK

FINANCIAL RISKS

At times throughout the year, the Company may maintain certain bank account balances in excess of FDIC insured limits.

GEOGRAPHICAL RISKS

For the year ended December 31, 2007, substantially all of the Company's assets and operations were based in China. Therefore, the Company's business, financial condition and results of operations may be adversely affected by significant political, economical and social uncertainties in China.

SEGMENT REPORTING

In accordance with SFAS No. 131 “disclosures about segments of Enterprises and related information”, the Company is considered to be a single reporting segment.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB Statement No. 51.” SFAS No. 160 amends Accounting Research Bulletin (ARB) No. 51, “Consolidated Financial Statements,” to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as a minority interest, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, SFAS No. 160 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and the noncontrolling interest. SFAS No. 160 is effective for the Company on January 1, 2009, and is not expected to have a significant impact on the Company’s financial condition or results of operations.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations (Revised))”, (SFAS No. 141(R)), to replace SFAS No. 141, “Business Combinations. SFAS No. 141(R) requires the use of the acquisition method of accounting, defines the acquirer, establishes the acquisition date and broadens the scope to all transactions and other events in which one entity obtains control over one or more other businesses. This statement is effective for business combinations or transactions entered into for fiscal years beginning on or after December 15, 2008. The Company is evaluating the impact of SFAS No. 141 (R).

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. This standard permits entities to measure many financial instruments and certain other items at fair value. The purpose is to improve financial reporting by providing entities with the opportunity to mitigate volatility. SFAS No. 159 provides companies with an option to report selected financial assets and liabilities at fair value. The objective of SFAS No.159 is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies and choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for the Company on January 1, 2008. It is expected that the adoption of SFAS No. 159 will not have a material impact on the Company’s financial condition or results of operations.

F-10

RECENT ACCOUNTING PRONOUNCEMENTS (continued)

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 defines fair value, establishes a consistent framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 is effective for the Company on January 1, 2008. The adoption of SFAS No. 157 is not expected to have a material impact on the Company’s financial condition or results of operations.

In July 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting and reporting for uncertainties in income taxes and prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. FIN 48 prescribes a two-step evaluation process for tax positions. The first step is recognition based on a determination of whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is to measure a tax position that meets the more-likely-than-not threshold. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. FIN 48 is effective as of the beginning of the Company’s 2007 fiscal year. The cumulative effect, if any, of applying FIN 48 is to be reported as an adjustment to the opening balance of retained earnings in the year of adoption. The Company’s policy is to charge any interest and penalties associated with past due income tax assessments to interest expense in the statement of operations. The Company does not have any significant uncertain contingent tax liabilities at December 31, 2007 and 2006 and as a result, the adoption of FIN No. 48 does not have a significant impact on the Company’s financial statements.

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” (“FIN 48’). FIN 48 establishes a single model to address accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition requirements. FIN 48 was effective for the Company on January 1, 2007. The adoption of FIN 48 did not have a material impact on the Company’s financial condition or results of operations.

In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets”. This statement amends SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, with respect to the accounting for separately recognized servicing assets and servicing liabilities, SFAS No. 156 requires companies to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a service contract. The statement permits a company to choose either the amortized cost or fair value measurement method for each class of separately recognized servicing assets. ”This statement was effective for the Company on January 1, 2007. The adoption of SFAS No. 156 did not have a material impact on the Company’s financial condition or results of operations.

In February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments - an Amendment of FASB Statements No. 133 and 140 (“SFAS No. 155”). SFAS No. 155 allows financial instruments that contain an embedded derivative and that otherwise would require bifurcation to be remeasured and accounted for as a whole on a fair value basis, at the holders’ election. SFAS No. 155 also clarifies and amends certain other provisions of SFAS No. 133 and SFAS No. 140. SFAS No. 155 is effective for fiscal years ending after September 15, 2006. The adoption of this pronouncement did not have a significant impact on the Company’s consolidated financial statements.

F-11

NOTE 3 - LOSSES DURING THE DEVELOPMENT STAGE AND MANAGEMENT'S PLANS

Through December 31, 2007 the Company had incurred development stage losses totaling $13,928,196 and net cash used in operation activities of $7,763,972. At December 31, 2007, the Company had $1,317,556 of cash and cash equivalents and $393,171 of net trade receivables to fund short-term working capital requirements.

The Company's ability to continue as a going concern and its future success is dependent upon its ability to raise capital in the near term to: (1) satisfy its current obligations, and (2) continue it’s planned strategy to reposition itself for bio-pharmaceutical opportunities in China.

The Company believes that it will be successful in completing the necessary steps to meet its cash flow requirements throughout fiscal 2008. Management's plans include, but are not limited to, re-focusing its business from telecommunications to biopharmaceuticals. However, there can be no assurance that CBI will generate sufficient revenues to provide positive net cash flows from operations or that sufficient capital will be available, when required, to permit the Company to realize its plans. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

					For the period from
					September 13, 2000
	December 31,				(date of inception) to
	2007		2006		December 31, 2007
Interest paid	$	-	$	-	$	-
Income taxes paid	$	-	$	800	$	3,773

Income Taxes Paid in 2006 and from the date of inception are solely attributed to its wholly-owned subsidiary, China Quantum Communications, Inc., which was disposed of by the Company in 2006.

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment, at cost, consists of the following at December 31, 2007:

Equipment	$	27,544
Office furniture and equipment	$	111,742
		139,286
Less: Accumulated depreciation		(89,854	)
	$	49,432

Depreciation expense for the years ended December 31, 2007 and 2006 and for the period from September 13, 2000 (date of inception) to December 31, 2007, was $42,193, $38,811 and $568,377, respectively, of which $-0-, $-0- and $146,000 respectively, was included in research and development expense.

NOTE 6 - STOCKHOLDERS' EQUITY

In February 2005, the company completed a private placement of 260,000 shares of common stock at a purchase price of $1.00 per share, or gross proceeds of $260,000.

During the quarter ended, March 31, 2005, the Company granted 402,000 fully vested, nonforfeitable warrants to purchase shares of common stock to two consultants for services in addition to cash payments. Those warrants expired without being exercised. During the quarter ended, March 31, 2005, the Company granted 100,000 fully vested, nonforfeitable shares of common stock to a consultant for services.

In April 2005, the company completed a private placement of 95,000 shares of common stock at a purchase price of $1.00 per share, or gross proceeds of $95,000, and, for no additional consideration, a cashless 2-year warrant to purchase additional 95,000 shares at an exercise price of $1.50 per share. A value of $36,770 of the proceeds has been allocated to the warrant. Those warrants have expired without being exercised.

F-12

In May 2005, the Company completed a private placement of 500,000 shares of common stock at a purchase price of $0.50 per share, or gross proceeds of $250,000, and for no additional consideration, a cashless 5-year warrant to purchase an additional 147,059 shares at an exercise price of $0.75 per share. A value of $71,470 of the proceeds has been allocated to the warrant.

Also in May 2005 the Company completed a private placement of 500,000 shares of common stock at a purchase price of $0.50 per share, or gross proceeds of $250,000, and for no additional consideration, a cashless 5-year warrant to purchase an additional 147,059 shares at an exercise price of $0.75 per share. A value of $68,240 of the proceeds has been allocated to the warrant.

In July 2005, the Company completed a private placement of 1,000,00,000 shares of common stock at a purchase price of $0.50 per share, or gross proceeds of $500,000, and for no additional consideration, a cashless 5-year warrant to purchase an additional 400,000 shares at an exercise price of $0.75 per share. A value of $168,000 of the proceeds has been allocated to the warrant.

In July 2005, the Company entered into a service agreement pursuant to which the Company agreed to issue warrants to purchase up to an aggregate of 200,000 shares (the “Service Warrant Shares”) of the Company's common stock in exchange for investor relations services. The Company had the right to terminate the service agreement at any time on or after October 5, 2005, upon 30 days prior written notice. The Service Warrant Shares were scheduled to vest in accordance with the following schedule and are purchasable at the following exercise prices:

50,000 Warrant Shares are immediately vested and may be purchased at an exercise price of $0.90 per share;

50,000 Warrant Shares will vest on the 91st day following the date of service agreement and may be purchased at an exercise price of $1.10 per share;

50,000 Warrant Shares will vest on the 181st day following the date of service agreement and may be purchased at an exercise price of $1.30 per share;

50,000 Warrant Shares will vest on the 271st day following the date of service agreement and may be purchased at an exercise price of $1.50 per share;

The warrants shall terminate on the 24-month anniversary of the effective date of a registration statement filed by the Company to register the resale of the Service Warrant Shares; provided, however, in the event that the Company elects to terminate the service agreement early as described above, the warrants will immediately terminate as to any Service Warrant Shares that are not then vested. By October 5, 2005, the Company terminated such service, resulting in only 50,000 Service Warrant Shares vested with an exercise price of $0.90 per share. Those warrants have expired without being exercised.

On November 29, 2005, the Company made a modification to the exercise price of the warrants in conjunction with a private placement completed in May and July, 2005 from the original exercise price of $1.10 per share to an amended exercise price of $0.40 per share.

On January 24, 2006, the Company granted 2,701,000 options, of which all are fully vested, to purchase shares of common stock at an excise price of $0.52 to officers, employees and consultants of the Company.

On January 26, 2006, the Company announced its plans to re-position itself for bio-pharmaceutical and other high growth opportunities in China, while continuing its commercialization of its high potential mobile VoIP solutions. In conjunction with the Company’s re-positioning plans, on February 27, 2006 the Company entered into an agreement to transfer ownership of its Chinese subsidiary Zhejiang Guang Tong Wang Luo Co., Ltd (ZJQC) to third parties. On January 1, 2006, the Company also entered into an agreement to transfer ownership of its U.S. subsidiary China Quantum Communications, Inc. to a former employee.

On April 7, 2006, the Company entered into a Share Exchange Agreement for the purpose of acquiring 100% of the outstanding capital stock of CBL, which has rights to invest in Tianyuan Bio-Pharmaceuticals Company, Ltd. and Zhejiang Tianyuan Biotech Co., Ltd. (“ZTBC”). The Company issued a total of 3,000,000 shares of restricted common stock in exchange for 100% of the outstanding capital of CBL.

In December 2006, the Company amended its Certificate of Incorporation to increase the number of authorized shares of its common stock from 100,000,000 to 200,000,000.

F-13

SECURED CONVERTIBLE PROMISSORY NOTES

On December 13, 2006, the Company entered into a Subscription Agreement with respect to the issuance and sale of $3,000,000 aggregate principal amount of its Secured Convertible Promissory Notes due December 13, 2008. The Notes are convertible at the option of the holders at any time into shares of the Company’s common stock. Prior to the occurrence of an Event of Default (as defined in the Notes), the Notes are convertible at a per share conversion price equal to $0.25 per share. Following the occurrence of an Event of Default (as defined in the Notes), the Notes are convertible at the lesser of $0.25 per share and 75% of the average of the closing bid prices for the common stock for the five trading days prior to the date of conversion.(see Note 11)

The Notes bear interest at a rate of eight percent (8%) per annum. Monthly payments, consisting of principal and accrued interest on the Notes shall commence March 13, 2007. The Company may, at its option pay the monthly payments in the form of either cash or shares of common stock. In the event that the Company elects to pay the monthly amount in cash, the Company shall be obligated to pay 115% of the principal amount component of the monthly amount and 100% of all other components of the monthly amount. In the event that the Company elects to pay the monthly amount in shares of common stock, the stock shall be valued at an applicable conversion rate equal to the lesser of $0.25 per share or seventy five percent (75%) of the average of the closing bid price of the common stock on the principal market on which the common stock is then traded or included for quotation for the five trading days preceding the applicable repayment date.

Provided that an Event of Default has not occurred, the Company may, at its option, prepay the outstanding principal amount of the Notes, in whole or in part, at any time upon 30 days written notice to the holders by paying 120% of the principal amount to be repaid together with accrued interest plus any other sums due thereon to the date of redemption. The Notes are secured by a Security Agreement entered into by and among the Company, CQCL, CBL, and QCCN and Barbara R. Mittman, as collateral agent for the purchasers of the Notes. The obligations of the Company under the Subscription Agreement with respect to the Notes and the Notes are guaranteed by the CQCL, CBL and QCCN pursuant to a Guaranty, dated as of December 13, 2006, entered into by the CQCL, CBL and QCCN, for the benefit of the purchasers of the Notes.

In connection with the sale of the Notes, the Company also issued to the purchasers of the Notes, Class A Warrants to purchase up to an aggregate of 6,000,000 shares of common stock and Class B Warrants to purchase up to an aggregate of 6,000,000 shares of common stock (each a “Warrant” and collectively, the “Warrants”). One Class A Warrant and one Class B Warrant were issued for each two shares of common stock that would have been issuable on the closing date assuming the complete conversion of the Notes on such date. The Class A Warrants have an exercise price of $0.30 per share and the Class B Warrants have an exercise price of $0.40.

Melton Management Ltd. acted as the finder with respect to the issuance and sale of the Notes and received a warrant to purchase 2,400,000 shares of our common stock at an exercise price of $0.30 per share.

In January 2007, one employee of the Company exercised stock options to purchase 25,000 shares of the common stock of the Company at exercise price of $0.20 per share. The Company received total net proceeds of $4,985.

On April 12, 2007, the Company granted 3,199,405 options to purchase shares of common stock at an excise price of $0.14 to officers, employees and consultants of the Company. Such options have a ten-year life and are vested within 5 years.

In 2007, the Company issued an aggregate of 25,041,747 shares of common stock to the holders of the Secured Convertible Promissory Notes in payment of principal and accrued interest on the Notes of $1,122,609.26 at an average conversion price of $0.045 per share, which was equal to 75% of the average of the closing bid prices for the common stock for the five trading days prior to the date of conversion.

F-14

SECURED CONVERTIBLE PROMISSORY NOTES (continued)

In 2007, the Company issued an aggregate of 48,791,027 shares of common stock to two investors pursuant to Section 12(c), “Favored Nations Provision,” of the Securities Purchase Agreement dated April 29, 2005, as amended, between the investors and the Company. According to this Favored Nations Provision, if at any time shares are held by such investors until three years after the Actual Effective Date, the Company shall offer, issue or agree to issue any Common Stock or securities convertible into or exercisable for shares of Common Stock (or modify any of the foregoing which may be outstanding) to any person or entity at a price per share of Common Stock or exercise price per share of Common Stock which shall be less than the per share Purchase Price of the Shares, or less than the exercise price per Warrant Share, respectively, without the consent of each of such investors holding Shares, Warrants, or Warrant Shares, then the Company shall issue, for each such occasion, additional shares of Common Stock to each of such investors so that the average per share purchase price of the shares of Common Stock issued to the investors (of only the Shares or Warrant Shares still owned by the investors) is equal to such other lower price per share and the Warrant Exercise Price shall automatically be reduced to such other lower price per share.

This “Favored Nations Provision” was triggered by the issuance of stock in payment of the principal and interest on the Notes.

EQUITY COMPENSATION PLAN

On December 29, 2000, China Quantum Communications, Ltd. established its Stock Option Plan (the "Plan"), in which incentive stock options and nonqualified stock options may be granted to officers, employees and consultants of the Company. The vesting of such options is four years and the options expire in ten years. On August 4, 2004, Techedge, Inc. adopted the 2001 Stock Option Plan established by China Quantum Communications, Ltd. under an Option Exchange agreement approved by the board of directors. Pursuant to the agreement, the Company exchanged an option to purchase 1.3254 shares of Techedge common stock for each option to purchase one ordinary share of China Quantum Communications, Ltd. All other terms and conditions of existing stock option agreements remain unchanged as to exercise price and vesting. The amounts presented in the table below have been restated to reflect the change.

On May 20, 2005 the Company's stockholders approved the 2005 Equity Compensation Plan (the 2005 Plan) and no additional options to purchase shares of common stock will be granted under the 2001 Stock Option Plan. Under the 2005 Plan, the Company may grant options to purchase shares of the Company's common stock, stock purchase rights and restricted or unrestricted stock awards of shares of common stock to eligible employees, directors and consultants, determine the terms and conditions of each option, stock purchase right or award and adopt, amend and rescind rules and regulations for the administration of the 2005 Plan.

The 2005 Plan is administered by a duly authorized committee appointed by the Board of Directors. The aggregate number of shares of common stock available for issuance in connection with options granted under the 2005 Plan is 8,500,000, subject to customary adjustments for stock splits, stock dividends or similar transactions.

The Committee determines the exercise price of options granted under the 2005 Plan, however the exercise price must be at least equal to the fair market value per share of common stock (or 110% of fair market value in the case of incentive options granted to a ten-percent stockholder) issuable upon exercise of the option at the time the incentive option was granted. No options may be exercisable for more than ten years (five years in the case of an incentive option granted to a ten-percent stockholder) from the date of the grant.

(i) Pursuant to the 2005 Plan, the Company issued 2,701,000 options with an exercise price of $0.52 per share on January 24, 2006. The options on average become vested within fifteen months after the grant.

The Company accounts for stock-based compensation in accordance with SFAS No. 123 Revised, “Share-Based Payment.” The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses the assumptions noted in the following table.

F-15

Dividend Yield		0.00	%
Expected Volatility		20.69	%
Risk-Free Interest Rate		4.68	%
Contractual Term		10 years
Stock Price at Date of Grant	$	0.52
Exercise Price	$	0.52

Total deferred stock-based compensation expenses related to the 2,701,000 stock options granted amounted to $551,907.  This amount is amortized over fifteen months in a manner consistent with Financial Accounting Standards Board Interpretation No. 123 (R). The amortization of deferred stock-based compensation for these equity arrangements was $141,900 and $410,007 for the fiscal year ended December 31, 2007 and 2006, respectively.

(ii) Subject to all the terms and provisions of the 2005 Plan, on April 12, 2007, the Company granted to its officers, employees and consultants options to purchase 3,199,405 shares of its common stocks with an exercise price of $0.14 per share. The options have a ten-year life and are vested within 5 years.

The Company accounts for stock-based compensation in accordance with SFAS No. 123 Revised, “Share-Based Payment.” The fair value of each warrant is estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses the assumptions noted in the following table.

Dividend Yield		0.00	%
Expected Volatility		25.44	%
Risk-Free Interest Rate		4.74	%
Contractual Term		10 years
Stock Price at Date of Grant	$	0.14
Exercise Price	$	0.14

Total deferred stock-based compensation expenses related to the 3,199,405 stock options granted amounted to $197,096.  This amount is amortized over the options vesting period in a manner consistent with Financial Accounting Standards Board Interpretation No. 123 (R). The amortization of deferred stock-based compensation for these equity arrangements was $36,152 for the fiscal year ended December 31, 2007.

A summary of the stock option activity for the years ended December 31, 2007 and 2006 pursuant to the terms of the Plan, which include incentive stock options and non-qualified stock options, is set forth below:

			Weighted
	Number of		Average
	Options		Exercise Price
Outstanding at December 31, 2005		4,266,685	$	0.20
Granted		2,701,000		0.52
Exercised		-		-
Canceled / Expired		-		-
Outstanding at December 31, 2006		6,967,085	$	0.32
Granted		3,199,405		0.14
Exercised		25,000		0.20
Canceled / Expired		769,769		0.20
Outstanding at December 31, 2007		9,372,321	$	0.27
Exercisable at December 31, 2007		6,752,372	$	0.32

The per share weighted average remaining life of the options outstanding at December 31, 2007 and 2006 is 5.2 and 3.6 years, respectively.

F-16

NOTE 7 - RELATED PARTY TRANSACTIONS

The Company records all related party transactions. Those charges are included in general and administrative expenses.

The Company occasionally engages in advances to and advances from related parties. The advances have no stated terms of repayment and carry no interest.

Following is a summary of transactions and balances with affiliated entities and related parties for 2007 and 2006:

					For the period from
					September 13, 2000
	December 31,				(date of inception) to
	2007		2006		December 31, 2007
Revenues from related parties	$	-	$	24,100	$	93,546
Purchases and expenses to
related parties	$	-	$	74,765	$	214,541
Due from related parties	$	-	$	151,534	$	-
Due to officers	$	631,488	$	956,717	$	631,488

Amounts due to officers consist of advances from the Company's CEO to fund the Company's operations. It also includes compensation deferred by the Company's CEO and former CFO. No written repayment agreements exist with either officer. Amounts are unsecured, non-interest bearing and due upon demand.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

OPERATING LEASE COMMITMENTS

The Company leases office equipment and certain office space in New Jersey, and the Peoples’ Republic of China under operating leases. Lease agreements vary from one to four-year lease agreements with a renewal option for New Jersey for two additional years. The following is a schedule of future minimum rental payments (exclusive of common area charges) required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2007.

Year ending December 31,
2008		14,400
2009		14,400
2010		14,400
Total minimum payments required	$	43,200

The leases also contain provisions for contingent rental payments based upon increases in taxes and common area maintenance expense.

OPERATING LEASE COMMITMENTS (continued)

Following is a summary of rental expenses under all operating leases:

	December 31,
	2007		2006
Minimum rentals	$	19,796	$	133,000
Contingent rentals		-		2,352
Total rent expense	$	19,796	$	135,352

F-17

NOTE 9- SEGMENT REPORTING

The company intends to distribute biopharmaceutical products. In 2006 substantially all of the Company’s operations are based in China. In accordance with SFAS No. 131 “Disclosures about Segments of an Enterprises and Related Information”, the Company is considered a single reportable segment. The Company is required to disclose certain information about revenues, information about geographic areas, information about major customers, and information about long-lived assets.

	Year Ended December 31, 2007
	United States		China		Total
Revenues	$	-	$	688,705	$	688,705
Long-lived assets	$	-	$	49,432	$	49,432
	Year Ended December 31, 2006
		United States		China		Total
Revenues	$	-	$	1,202,763	$	1,202,763
Long-lived assets	$	-	$	90,069	$	90,069

For the years ended December 31, 2007 and 2006, the Company did not have any major customers.

NOTE 10- EVENT OF DEFAULT

On October 15, 2007, an “event of default” occurred and is continuing under the Notes in that we failed to make our monthly amortization payment due on that date in registered shares of common stock or in cash. This event of default has not been waived by the investors and is continuing. We intend to endeavor to satisfy our past and future amortization payments due under the Notes by delivery of shares of our common stock. However, there can be no assurance that this will be possible as the investors have the right to request payment in cash following an event of default. We have communicated with our investors and they have verbally agreed to continue to accept unregistered shares in payment of amounts due to date. However, we cannot assure you that the investors will continue to permit us to make monthly payments due on the Notes in the future in shares of our common stock. We do not currently have sufficient cash flow to make the payments due on the Notes in cash. Accordingly if the investors do not continue to permit us to make the monthly payments due on the Notes by issuing shares of our common stock we may not be able to continue as a going concern and may be forced to wind up our affairs or seek protection under the bankruptcy laws. Other than as stated above, the Company has no specific plans, arrangements or understandings, either written or oral, to issue any of the additional authorized shares of Common Stock.

F-18

NOTE 11- RESTATEMENT TO RECLASSIFY RELATED PARTY TRANSATIONS

The effect of restatement is as follows:

CONSOLIDATED BALANCE SHEETS

	As Reported			As Restated			Effect of
	December 31,2007			December 31,2007			Change
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,317,556		$	1,317,556		$	-
Accounts receivable, net of allowance for
doubtful accounts of $1,699 and $53,620 at		393,171			393,171			-
December 31, 2007 and 2006, respectively
Inventory		344			344			-
Due from related parties		698,658			-			(698,658	)
Other receivables		2,865,088			2,865,088			-
Deferred compensation cost		160,944			160,944			-
Advance payments		2,500			2,500			-
Total Current Assets		5,438,261			4,739,603			(698,658	)
PROPERTY AND EQUIPMENT, NET		49,432			49,432			-
INTANGIBLES - GOODWILL		1,456,957			1,456,957			-
Total Assets	$	6,944,650		$	6,245,992		$	(698,658	)
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,910,670		$	1,910,670		$	-
Current portion of long-term debt		-			-			-
Loans payable		2,032,216			2,032,216			-
Other Liabilities		1,322,418			1,322,418			-
Due to officers		631,488			631,488			-
Total Current Liabilities		5,896,792			5,896,792			-
LONG TERM DEBT		-			-			-
MINORITY INTEREST		2,083,760			2,083,760			-
Total Liabilities		7,980,552			7,980,552			-
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, stated value $.0001, 200,000,000
shares authorized; 159,377,774 and 85,520,000
shares issued and Outstanding at December 31,		15,938			15,938			-
2007 and 2006
Additional paid-in capital		12,354,516			11,655,858			(698,658	)
Deficit accumulated during the development stage		(13,928,196	)		(13,928,196	)		-
Accumulated other comprehensive income		521,840			521,840			-
Total Stockholders' Equity (Deficit)		(1,035,902	)		(1,734,560	)		(698,658	)
Total Liabilities and Stockholders' Equity (Deficit)	$	6,944,650		$	6,245,992		$	(698,658	)

F-19

NOTE 11- RESTATEMENT TO RECLASSIFY RELATED PARTY TRANSATIONS (continued)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	As Reported			As Restated			Effect of
	December 31,2007			December 31,2007			Change
REVENUE	$	688,705		$	688,705		$	-
COST OF GOODS SOLD		615,129			615,129			-
GROSS PROFIT		73,576			73,576			-
OPERATING EXPENSES
Research and development		-			-			-
Selling, general and administrative (including stock-
based compensation of $178,052, $2,897,459
and $3,089,122 respectively)		1,379,996			1,379,996			-
Depreciation and amortization		42,193			42,193			-
Impairment loss of goodwill		304,094			304,094			-
Total Operating Expenses		1,726,283			1,726,283			-
LOSS FROM OPERATIONS		(1,652,707	)		(1,652,707	)		-
OTHER INCOME (EXPENSE)
Loss from unconsolidated subsidiary		-			-			-
Sale of net operating loss carryforwards		-			-			-
Gain on foreign currency		-			-			-
Interest income (expense), net		(205,278	)		(205,278	)		-
Loss on disposal of investments		-			-			-
Non operating income (expenses)		99,164			99,164			-
Total Other Income (Expense)		(106,114	)		(106,114	)		-
LOSS BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE		(1,758,821	)		(1,758,821	)		-
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX		-			-			-
LOSS BEFORE MINORITY INTEREST		(1,758,821	)		(1,758,821	)		-
MINORITY INTEREST		105,740			105,740			-
NET LOSS		(1,653,081	)		(1,653,081	)		-
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		428,990			428,990			-
COMPREHENSIVE LOSS	$	(1,224,091	)	$	(1,224,091	)	$	-

F-20

NOTE 11- RESTATEMENT TO RECLASSIFY RELATED PARTY TRANSATIONS (continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	As Reported			As Restated			Effect of
	December 31,2007			December 31,2007			Change
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,653,081	)	$	(1,653,081	)	$	-
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation and amortization		42,193			42,193			-
Minority interest		(105,740	)		(105,740	)		-
Impairment loss of goodwill		304,093			304,093			-
Cumulative effect of change in accounting principle		-			-			-
Loss on disposal of fixed assets		14,808			14,808			-
Loss on unconsolidated subsidiary		-			-			-
Provision for doubtful accounts		-			-			-
Loss on foreign currency translation		-			-			-
Loss on disposal of investments, net of tax		-			-			-
Share based interest payment		154,826			154,826			-
Deferred compensation cost		178,052			178,052			-
Bad debt expense		(27,255	)		(27,255	)		-
Changes in assets and liabilities:
Accounts receivable		575,640			575,640			-
Inventory		(344	)		(344	)		-
Due from related parties		(547,124	)		151,534			698,658
Other receivables		(2,572,510	)		(2,572,510	)
Advance payments		2,127,030			2,127,030			-
Prepaid expenses and other current assets		-			-			-
Other assets		-			-			-
Accounts payable and accrued expenses		(812,146	)		(812,146	)		-
Other liabilities		1,279,368			1,279,368			-
Total Adjustments		610,891			1,309,549			698,658
Net Cash Used In Operating Activities		(1,042,190	)		(343,532	)		698,658
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in unconsolidated subsidiary		-			-			-
Purchase of property and equipment		(16,364	)		(16,364	)		-
Net Cash Used In Investing Activities		(16,364	)		(16,364	)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from private placement of common stock		-			-			-
Repurchase of treasury stock		-			-			-
Net proceeds from convertible debt		-			-			-
Reclassification of due from disposed subsidiary		-			(698,658	)		(698,658	)
Net proceeds from exercise of stock options		5,000			5,000			-
Proceeds from officers’ advances		(325,229	)		(325,229	)		-
Net Cash Used In Financing Activities		(320,229	)		(1,018,887	)		(698,658	)
EFFECT OF FOREIGN CURRENCY CONVERSION
ON CASH		388,540			388,540			-
NET INCEASE (DECREASE) IN CASH		(990,243	)		(990,243	)		-
CASH AND CASH EQUIVALENTS – BEGINNING		2,307,799			2,307,799			-
CASH AND CASH EQUIVALENTS – ENDING	$	1,317,556		$	1,317,556		$	-

NOTE 12- SUBSEQUENT EVENTS

In January and February 2008, the Company issued an aggregate of 9,918,942 shares of common stock to the holders of the Secured Convertible Promissory Notes as conversion of the principal and interest of the Notes worth approximately $46,000 at the average conversion price of $0.005 per share.

F-21

PART III

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibit No.	Description of Exhibit
2.1	Share Exchange Agreement, dated June 9, 2004 (incorporated by reference to Exhibit 2.1 to the Company’s current report on Form 8-K filed with the SEC on August 8, 2004)
3.1.1	Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(a) to the Company’s registration statement on Form 10-SB filed with the SEC on September 17, 2002)
3.1.2	Certificate of Amendment of Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1.1 to the Company’s quarterly report on Form 10-QSB filed with the SEC in November 12, 2004)
3.2	Bylaws of the Company (incorporated by reference to Exhibit 3(a) to the Company’s registration statement on Form 10-SB filed with the SEC on September 17, 2002.
4.1	Specimen of Common Stock Certificate of Registrant (incorporated by reference to Exhibit 4(b) to the Company’s registration statement on Form 10-SB filed with the SEC on September 17, 2002)
4.2	Techedge, Inc. ("Techedge"), 2005 Equity Compensation Plan and forms of agreement there under (incorporated by reference to Exhibit 4.5 to the Company’s registration statement on Form S-8 (Registration No. 333-125742) filed on June 10, 2005)
4.3	Form of Secured Convertible Promissory Note (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the SEC on December 13, 2006)
4.4	Form of Class A Warrant (incorporated by reference to Exhibit 4.2 to the Company’s current report on Form 8-K filed with the SEC on December 13, 2006)
4.5	Form of Class B Warrant (incorporated by reference to Exhibit 4.3 to the Company’s current report on Form 8-K filed with the SEC on December 13, 2006)
4.6	Form of Finder Warrant (incorporated by reference to Exhibit 4.4 to the Company’s current report on Form 8-K filed with the SEC on December 13, 2006)
10.1	Joint Venture Contract of Zhejiang Tianyuan Biotech Co., Ltd. cated as of April 6, 2006 between China BioPharma Limited and Zhejiang Tianyuan Biopharmaceutical Co. Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s annual report on Form 10-KSB filed with the SEC on March 29, 2007)
10.2	Amendment to Joint Venture Contract of Zhejiang Tianyuan Biotech Co., Ltd. (incorporated by reference to Exhibit 10.2 to the Company’s annual report on Form 10-KSB filed with the SEC on March 29, 2007)
10.3	Techedge 2003 Non-Statutory Stock Option Plan (incorporated by reference to Exhibit 4 to the Company’s registration statement on Form S-8 (File No. 333-105885) filed with the SEC on June 6, 2003)

S-1

10.4	China Quantum Communications, Ltd. 2001 Stock Plan and forms of agreement thereunder (incorporated by reference to Exhibit 10.6 to the Company’s annual report on Form 10-KSB filed with the SEC on March 31, 2005)
10.5	Stock Purchase Agreement, dated as of February 8, 2005, between Techedge, Inc. and Pacific Century Fund LLC (incorporated by reference to Exhibit 10.6 to the Company’s current report on Form 8K filed on February 14, 2005)
10.6	Techedge Inc. 2005 Equity Compensation Plan (incorporated by reference to Appendix A to the Company’s Proxy Statement filed with the SEC on April 15, 2005)
10.7	Stock Purchase Agreement, dated as of April 26, 2005, between Techedge and Pacific Century Fund LLC (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on April 29, 2005)
10.8	Warrant dated April 26, 2005 issued to Pacific Century Fund LLC (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed on April 29, 2005)
10.9	Subscription Agreement, dated as of April 29, 2005, between Techedge, Whalehaven Capital Fund Limited and Alpha Capital Aktiengesellschaft (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on May 5, 2005)
10.10	Warrant dated April 29, 2005 issued to Whalehaven Capital Fund Limited (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed on May 2, 2005)
10.11	Funds Escrow Agreement dated as of April 29, 2005 by and among Techedge, Whalehaven Capital Fund Limited and Alpha Capital Aktiengesellschaft, among other parties (incorporated by reference to Exhibit 10.3 to the Company’s current report on Form 8-K filed on May 5, 2005)
10.12	Warrant dated May 4, 2005 issued to Alpha Capital Aktiengesellschaft (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed on May 5, 2005)
10.13	Amendment to Subscription Agreement, dated as of May 27, 2005, by and among Techedge, Whalehaven Capital Fund Limited and Alpha Capital Aktiengesellschaft (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on June 3, 2005)
10.14	Subscription Agreement, dated December 13, 2006, by and among the Company and the subscribers identified on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed with the SEC on December 13, 2006)
10.15	Security Agreement, dated December 13, 2006, by and between the Company, China Quantum Communications Ltd., China Biopharma Ltd., Guang Tong Wang Luo (China) Co. Ltd., and Barbara R. Mittman, as collateral agent for the Subscribers (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed with the SEC on December 13, 2006)

S-2

10.16	Guaranty, dated as of December 13, 2006, entered into by the Subsidiaries, for the benefit of the Subscribers (incorporated by reference to Exhibit 10.3 to the Company’s current report on Form 8-K filed with the SEC on December 13, 2006)
21.1	List of subsidiaries of the Company, filed herewith (incorporated by reference to Exhibit 21.1 to the Company’s annual report on Form 10-KSB filed with the SEC on March 29, 2007)
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended, with respect to the Form 10-K/A, filed herewith.
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended, with respect to the Form 10-K/A, filed herewith.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

S-3

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHINA BIOPHARMA, INC.
Date: November 11, 2008	By:	/s/ Peter Wang
	Name: Peter Wang
	Title: Chief Executive Officer, Director
	and Chairman of the Board (Principal Executive Officer)
Date: November 11, 2008	By:	/s/ Chunhui Shu
	Name: Chunhui Shu
	Title: Chief Financial Officer (Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: November 11, 2008	By:	/s/ Charles Xue
	Name: Charles Xue
	Title: Director

Date: November 11, 2008	By:	/s/ Ya Li
	Name: Ya Li
	Title: Director

S-4