Weikang Bio-tech 10-Q Quarterly report

U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

þ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2008

¨           Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

    For the transition period from to .

Commission File Number 000-1365354

WEIKANG BIO-TECHNOLOGY GROUP COMPANY, INC.

(Exact name of small business issuer as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	26-2816569 (I.R.S. employer identification number)
1Economic & Technology Development Zone Chengxu Village Shuangcheng Town, Shuangcheng City Heilongjiang Province, PRC (Address of principal executive offices and zip code) (86) 0451-88355530 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.00001 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 þ

Indicate by check mark whether the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes þ   No o

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 þ     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.  o

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 (Check one):

Large Accelerated Filer  o                                                                           Accelerated Filer  o

Non-accelerated filer  o                                                                Smaller reporting company  þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o   No þ

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of November 19, 2008, the Registrant had 25,229,800 shares of Common Stock outstanding.

WEIKANG BIO-TECHNOLOGY GROUP CO, INC.

FORM 10-Q

INDEX

		Page Number
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		3
PART I.  FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	F-1
	Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007	F-2
	Consolidated Statements of Income and Other Comprehensive Income for the Nine Months and Three Months Ended September 30, 2008	F-3
	Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2008	F-4
	Notes to the Consolidated Financial Statements as of September 30, 2008	F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4.	Controls and Procedures	12
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings	13
Item 1A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Submission of Matters to a Vote of Security Holders	13
Item 5.	Other Information	13
Item 6.	Exhibits	14
SIGNATURES		15

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements made by us in this Quarterly Report on Form 10-Q are forward-looking in nature, including but not limited to, statements relating to our future revenue, product development, demand, acceptance and market share, gross margins, levels of research and development, our management's plans and objectives for our current and future operations, and other statements that are not historical facts. Forward-looking statements include, but are not limited to, statements that are not historical facts, and statements including forms of the words "intend", "believe", "will", "may", "could", "expect", "anticipate", "plan", "possible", and similar terms. Actual results could differ materially from the results implied by the forward looking statements due to a variety of factors, many of which are discussed throughout this Quarterly Report. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly release any revisions to these forward-looking statements that may reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by us include, but are not limited to:

● our ability to finance our activities and maintain our financial liquidity;

● our ability to attract and retain qualified, knowledgeable employees;

● the impact of general economic conditions on our business;

● postponements, reductions, or cancellations in orders from new or existing customers;

● the limited number of potential customers for our products;

● the variability in gross margins on our products;

● our ability to develop and market new products successfully;

● our ability to acquire new customers in the future; and

● deterioration of business and economic conditions in our markets.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update this forward-looking information. Nonetheless, the Company reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this Report. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

In this document, the words "we," "our," "ours," "us," and “Company” refer to Weikang Bio-Technology Group Co, Inc. and our subsidiaries.

-3-

PART I.                      FINANCIAL INFORMATION

ITEM 1.                      FINANCIAL STATEMENTS.

WEIKANG BIO-TECHNOLOGY GROUP CO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	SEPTEMBER 30,			DECEMBER 31,
	2008			2007
	(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash & cash equivalents	$	1,135,997		$	117,240
Accounts receivable		1,032,768			25,711
Advance to suppliers		106,921			73,033
Inventory		236,976			199,160
Other receivables		12,091			66,082
Due from officer		485,268			2,818,265
Due from related party		157,607			135,777
Total current assets		3,167,628			3,435,268
NONCURRENT ASSETS
Property and equipment, net		11,010,024			3,771,188
Construction in progress		340,202			275,832
Intangible assets		12,294,820			538,355
Deferred tax asset		-			27,726
Total noncurrent assets		23,645,046			4,613,101
TOTAL ASSETS	$	26,812,674		$	8,048,369
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	38,555		$	24,417
Unearned revenue		4,811
Value added tax payable		914,241			-
Accrued liabilities and other payables		17,735,595			7,627,907
Advance from officer		650,000			650,000
Total current liabilities		19,343,202			8,302,324
CONTINGENCIES
DEFERRED TAX LIABILITY		3,597,520			-
STOCKHOLDERS' EQUITY
Common stock,  $.00001 par value;  authorized shares
100,000,000;  issued and outstanding 25,229,800 shares		252			252
Additional paid in capital		(1,514,370	)		(241,551	)
Statutory reserve		1,883,599			261,260
Accumulated other comprehensive income		829,945			196,432
Retained earnings		2,672,526			(470,348	)
Total stockholders' equity		3,871,952			(253,955	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	26,812,674		$	8,048,369

F-1

WEIKANG BIO-TECHNOLOGY GROUP CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
	FOR THE NINE MONTHS ENDED			FOR THE THREE MONTHS ENDED
	SEPTEMBER 30, 2008			SEPTEMBER 30, 2008
	(UNAUDITED)			(UNAUDITED)
Net sales	$	6,651,947		$	3,452,049
Cost of goods sold		2,214,935			1,048,897
Gross profit		4,437,012			2,403,152
Operating expenses
Selling expenses		18,242			12,683
General and administrative expenses		569,472			201,609
Total operating expenses		587,714			214,292
Income from operations		3,849,298			2,188,860
Non-operating income (expenses)
Interest income		198			31
Financial expense		(4,473	)		(3,868	)
Other income		343			343
Other expenses		(716	)		(8	)
Total non-operating expenses		(4,648	)		(3,502	)
Income before income tax		3,844,650			2,185,358
Income tax		352,255			352,255
Net income		3,492,395			1,833,103
Other comprehensive item
Foreign currency translation		633,512			76,268
Comprehensive Income	$	4,125,907		$	1,909,371
Basic and diluted weighted average shares outstanding		25,229,800			25,229,800
Basic and diluted net earnings per share	$	0.14		$	0.07

F-2

WEIKANG BIO-TECHNOLOGY GROUP CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,492,395
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		333,702
(Increase) decrease in current assets:
Accounts receivable		(612,712	)
Other receivables and advances to suppliers		14,097
Inventory		20,751
Increase (decrease) in current liabilities:
Accounts payable		12,138
Unearned revenue		4,697
Accrued liabilities and other payables		3,897
Value added tax payable		429,827
Net cash provided by operating activities		3,698,792
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of business		(4,868,967	)
Acquisition of property & equipment		(34,616	)
Construction in progress		(44,022	)
Cash acquired at purchase of business		10,176
Net cash used in investing activities		(4,937,429	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment from officer		2,459,922
Due from related party		(234,408	)
Net cash used in financing activities		2,225,514
EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS		31,880
INCREASE IN CASH & CASH EQUIVALENTS		1,018,757
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD		117,240
CASH & CASH EQUIVALENTS, END OF PERIOD	$	1,135,997
Supplemental Cash flow data:
Income tax paid	$	-
Interest paid	$	-

F-3

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Weikang Bio-Technology Group Co., Inc., a Nevada corporation (“Weikang” or “the Company) was originally incorporated on May 12, 2004 in the State of Florida as Expedition Leasing, Inc. (“Expedition”). The Company reincorporated to Nevada and changed to its present name on July 12, 2008, pursuant to a merger with Weikang, a wholly owned subsidiary, with Weikang as the surviving entity. The Company is engaged in the development, manufacture and distribution of health and nutritional supplements through its indirect wholly owned operating subsidiary, Heilongjiang Weikang Biotechnology Group Co., Ltd. (“Heilongjiang Weikang”) in the People’s Republic of China (“PRC” of “China”).  

On December 7, 2007, the Company (as Expedition) entered into an exchange agreement with Sinary Bio-Technology Holdings Group, Inc., a Nevada corporation (“Sinary”) and its sole shareholder (the “Sinary Stockholder”) on December 7, 2007, pursuant to which the Company issued 24,725,200 shares of its common stock to the Sinary Stockholder in exchange for all of the issued and outstanding common shares of Sinary. Concurrently, Sinary paid $650,000 to certain former shareholders of the Company, who surrendered an aggregate of 24,725,200 shares of the Company’s common stock held by them to the Company for cancellation. As a result, the Sinary Stockholder currently owns 98% shares of the Company. Since the Closing Date, Sinary has become a wholly owned subsidiary of the Company.

Prior to the acquisition of Sinary, the Company was a non-operating public shell corporation. Pursuant to Securities and Exchange Commission (“SEC”) rules, the merger or acquisition of a private operating company into a non-operating public shell corporation with nominal net assets is considered a capital transaction in substance, rather than a business combination. Accordingly, for accounting purposes, the transaction has been treated as a reverse acquisition and a recapitalization, and pro forma information is not presented. Transaction costs incurred in the reverse acquisition have been charged to expense.

Sinary was incorporated under the laws of the State of Nevada on August 31, 2007. On October 25, 2007, Sinary entered into an equity interests transfer agreement with the stockholders of Heilongjiang Weikang, a limited liability company in the PRC, to acquire 100% of the equity interests of Heilongjiang Weikang for the sum of 57 million Renminbi (“RMB”), or approximately 7.6 million US dollars.

Heilongjiang Weikang was incorporated in the Heilongjiang Province, PRC on March 29, 2005, and formerly known as Heilongjiang Province Weikang Bio-Engineering Co., Ltd. Heilongjiang Weikang is engaged in development, manufacture and distribution of health and nutritional supplements in the PRC.  

On July 22, 2008, Heilongjiang Weikang completed the acquisition of 100% of the issued and outstanding equity interests of Tianfang (Guizhou) Pharmaceutical Co., Ltd. (“Tianfang”), a Chinese limited liability company, for the aggregate purchase price of $15,000,000 (the “Consideration”), pursuant to a stock transfer agreement dated and entered into on June 30, 2008 by and among the Heilongjiang Weikang, Tianfang, and Tianfang’s two shareholders: Beijing Shiji Qisheng Trading Co., Ltd., a Chinese limited liability company (“Shiji Qisheng”) and Tri-H Trade (U.S.A.) Co., Ltd., a California corporation (“Tri-H”, and together with Shiji Qisheng collectively as the “Selling Shareholders”).

Tianfang was incorporated in the Guizhou Province, PRC in 1998. Tianfang is engaged in the development, manufacture and distribution of Chinese herbal extract products and GMP certified western prescriptive medicine.  

The unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s 2007 audited financial statements. The results for the nine and three months ended September 30, 2008 do not necessarily indicate the results for the full year ended December 31, 2008.

F-4

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principle of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Sinary, and the results of operations of Weikang, Sinary’s wholly-owned subsidiary, Tianfang, Weikang’s wholly-owned subsidiary from the date of acquisition. All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates

In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

Accounts Receivable

The Company’s policy is to maintain reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. There were no allowances for bad debts at September 30, 2008 and December 31, 2007.

Inventory

Inventories are valued at a lower cost or market with cost determined on a moving weighted average basis. Costs of work in progress and finished goods comprise direct material, direct production cost and an allocated portion of production overheads.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for all assets with salvage value of 10% and estimated lives ranging from 3 to 20 years as follows:

F-5

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

Building	20 years
Vehicle	5 years
Office Equipment	3-7 years
Production Equipment	3-10 years

Land Use Right

Right to use land is stated at cost less accumulated amortization. Amortization is provided using the straight-line method over 50 years.

Impairment of Long-Lived Assets

Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of long-lived assets to be held and used is measured by a comparison between the carrying amount of an asset and the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is the amount that the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined by the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of September 30, 2008 and December 31, 2007, there were no significant impairments of its long-lived assets.

Income Taxes

The Company uses Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are considered as the tax consequences in future years for differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007. Based on FIN 48, the Company made a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by FIN 48. Based on Interpretation 48, the Company recognized no material adjustments to liabilities or stockholders’ equity. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the positions taken or the amount of the positions that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely to be realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

F-6

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

Interests associated with unrecognized tax benefits are classified as interest expenses and penalties are classified in selling, general and administrative expenses in the statements of income. The adoption of FIN 48 did not have a material impact on the Company’s financial statements.

Heilongjiang Weikang is governed by the Income Tax Law of the PRC concerning the private enterprises that are generally subject to tax at a statutory rate of 25% (33% prior to 2008) on income reported in the statutory financial statements after appropriate tax adjustments. Heilongjiang Weikang is exempt from income tax for three years from 2006 to 2008.  Tianfang is subject to 25% income tax rate.

Revenue Recognition

The Company's revenue recognition policies are in compliance with SEC Staff Accounting Bulletin (“SAB”) 104.  Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all the relevant criteria for revenue recognition is met are recorded as unearned revenue.

Sales revenue represents the invoiced value of goods, which is subject to net of value-added tax (“VAT”). All of the Company’s products are sold in the PRC and are subject to Chinese value-added tax of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing their end product. The Company recorded VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables.

Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government.  VAT taxes are not affected by the income tax holiday.

Sales returns and allowances was $0 for the nine and three months ended September 30, 2008. The Company does not provide unconditional right of return, price protection or any other concessions to its dealers or other customers.

Cost of Goods Sold

Cost of goods sold consists primarily of material costs, employee compensation, depreciation and related expenses, which are directly attributable to the production of products. Write-down of inventory to lower cost or market is also recorded in cost of goods sold.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist primarily of accounts receivable and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of its clients' financial condition and customer payment practices to minimize collecting risk on accounts receivable.

The operations of the Company are located in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in the PRC, as well as by the overall performance of the PRC’s economy.

F-7

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

Statement of Cash Flows

In accordance with SFAS No. 95, “Statement of Cash Flows,” cash flows from the Company's operations are calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet. Cash flows from operating, investing and financing activities exclude the effect of the acquisition of Tianfang.

Fair Value of Financial Instruments

SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.

Foreign Currency Translation and Comprehensive Income (Loss)

The Company’s functional currency is the Renminbi (“RMB”). For financial reporting purposes, RMB has been translated into United States dollars ("USD") as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated other comprehensive income".

Gains and losses resulting from foreign currency transactions are included in income. There has been no significant fluctuation in exchange rate for the conversion of RMB to USD after the balance sheet date.

The Company uses SFAS No 130, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the nine and three months ended September 30, 2008 included net income and foreign currency translation adjustments.

Basic and Diluted Earning Per Share (EPS)

Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similarly to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted net earning per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

Segment Reporting

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" requires a use of the “management approach” model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manners in which management disaggregates a company.

F-8

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

SFAS 131 has no effect on the Company's financial statements as substantially all of the Company's operations are conducted in one industry segment. The Company has one reportable business segment. All of the Company's assets are located in the PRC.

Research and Development

Research and development costs are related primarily to the development of new nutritional and health supplements products. Research and development costs are expenses as incurred. For the nine and three months ended September 30, 2008 the research and development expense were $0.

Start-up Costs

In accordance with the American Institute of Certified Public Accountants Statement of Position 98-5, “Reporting on the Costs of Start-up Activities”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.

New Accounting Pronouncements 

Accounting for Financial Guarantee Insurance Contracts

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts, an interpretation of FASB Statement No. 60.”  The scope of this Statement is limited to financial guarantee insurance (and reinsurance) contracts, as described in this Statement, issued by enterprises included within the scope of Statement 60. Accordingly, this Statement does not apply to financial guarantee contracts issued by enterprises excluded from the scope of Statement 60 or to some insurance contracts that seem similar to financial guarantee insurance contracts issued by insurance enterprises (such as mortgage guaranty insurance or credit insurance on trade receivables). This Statement also does not apply to financial guarantee insurance contracts that are derivative instruments included within the scope of FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This Statement will not have an impact on the Company’s financial statements.

The Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This Statement will not have an impact on the Company’s financial statements.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133.” This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Based on current conditions, the Company does not believe that the adoption of SFAS 161 will have a significant impact on its results of operations or financial position.

F-9

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

Noncontrolling Interests in Consolidated Financial Statements – An Amendment of ARB No. 51

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51 (“SFAS 160”). SFAS 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements separated from the parent’s equity. The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement. SFAS 160 clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss will be measured by the fair value of the noncontrolling equity investment on the deconsolidation date. SFAS 160 also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Based on current conditions, the Company does not believe that the adoption of SFAS 160 will have a significant impact on its results of operations or financial position.

Business Combinations

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R will significantly change the accounting for business combinations. Under SFAS 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS 141R will change the accounting treatment for certain specific items, including:

● Acquisition costs will be generally expensed as incurred;

● Noncontrolling interests (formerly known as “minority interests” – see SFAS 160 discussion below) will be valued at fair value at the acquisition date;

● Acquired contingent liabilities will be recorded at fair value at the acquisition date and subsequently measured at either the higher of such amount or the amount determined under existing guidance for non-acquired contingencies;

● In-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date;

● Restructuring costs associated with a business combination will be generally expensed subsequent to the acquisition date; and

● Changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense.

SFAS 141R also includes a substantial number of new disclosure requirements. SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Earlier adoption is prohibited. Accordingly, since we are a calendar year-end company we will continue to record and disclose business combinations following existing GAAP until January 1, 2009. The Company believes that SFAS 141R will have an impact on accounting for business combinations once adopted but the effect depends on acquisitions at that time.

F-10

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an Amendment of FASB Statements No. 87, 88, 106, and 132R

In September 2006, the FASB, issued SFAS, No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an Amendment of FASB Statements No. 87, 88, 106, and 132R,” which requires employers to recognize the underfunded or overfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in the funded status in the year in which the changes occur through other accumulated comprehensive income. Additionally, SFAS No. 158 requires employers to measure the funded status of a plan as of the date of its year-end statement of financial position. The new reporting requirements and related new footnote disclosure rules of SFAS No. 158 are effective for fiscal years ending after December 15, 2006. The Company adopted the provisions of SFAS No. 158 for the year end 2006, and the effect of recognizing the funded status in other accumulated comprehensive income was not significant. The new measurement date requirement applies for fiscal years ending after December 15, 2008.

Accounting for Nonrefundable Advance Payments for Goods or Services Received for use in Future Research and Development Activities

In June 2007, the FASB issued FASB Staff Position No. EITF 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for use in Future Research and Development Activities” (“FSP EITF 07-3”), which addresses whether nonrefundable advance payments for goods or services that used or rendered for research and development activities should be expensed when the advance payment is made or when the research and development activity has been performed.  Management is currently evaluating the effect of this pronouncement on financial statements.

3. INVENTORY

Inventory at September 30, 2008 and December 31, 2007 was as follows: 

	September 30, 2008 (Unaudited)		December 31, 2007
Raw materials	$	75,891	$	136,010
packing materials		62,245		28,258
Finished Goods		98,840		34,892
Total	$	236,976	$	199,160

F-11

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

4. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following at September 30, 2008 and December 31, 2007:

	September 30, 2008 (Unaudited)			December 31, 2008
Building	$	7,869,899		$	2,736,841
Building improvements		913,681			508,184
Production equipment		2,272,332			482,062
Office furniture and equipment		180,103			24,193
Vehicles		118,736			63,894
		11,354,751			3,815,174
Less: Accumulated depreciation		(344,727	)		(43,986	)
	$	11,010,024		$	3,771,188

Depreciation expense for the nine and three months ended September 30, 2008 was $291,000 and $153,000, respectively.

5. CONSTRUCTION IN PROGRESS

Construction in progress mainly represented payment made for the construction of a new plant for Heilongjiang Weikang. 

6. OTHER RECEIVABLES

Other receivables represented cash advances to employees and sales representatives for normal business purposes such as advances for traveling expense.

7. RELATED PARTY TRANSACTIONS

Due from Officer

Due from officer represented funds provided to an officer of the Company who used the funds to pay for the partial payment on behalf of Heilongjiang Weikang in connection with the acquisition of Tianfang.

Due from Related Party  

Due from related party represented accounts receivable arising from sales made to a related company owned by the Company’s chief executive officer. As of September 30, 2008 and December 31, 2007, due from this related party was $157,607 and $135,777, respectively. Sales to this related party during the nine and three months ended September 30, 2008 was approximately $96,000 and $11,000, respectively.

Sales to Related Party

During the nine and three months ended September 30, 2008, sales were made to another related company owned by the Company’s chief executive officer in the amount of approximately $729,000 and $157,000, respectively. The receivables from this related party was $0 as of September 30, 2008 and December 31, 2007.

F-12

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

Advance from officer

Advance from officer represented the payment made by an officer of Heilongjiang Weikang on behalf of Sinary to certain former shareholders of the Company in connection with the reverse acquisition between the Company and Sinary on December 7, 2007.

8. INTANGIBLE ASSETS

Intangible assets consisted of the following at September 30, 2008 and December 31, 2007:

	September 30, 2008 (Unaudited)			December 31, 2008
Land use right	$	8,744,650		$	540,263
Goodwill arising from acquisition of Tianfang		3,587,072			-
Software		7,226			-
		12,338,948			540,263
Less: Accumulated amortization		(44,128	)		(1,908	)
	$	12,294,820		$	538,355

All land in the PRC is government owned and can not be sold to any individual or company. However, the government grants the user a “land use right” to use the land. The Company has the right to use the land for 50 years and is amortizing the right on a straight-line basis for 50 years.

Amortization expense for nine and three months ended September 30, 2008 was $41,100 and $35,100, respectively.  Amortization expense for the next five years is expected to be $203,500, $203,500, $203,500, $203,500 and $203,500 respectively.

9. MAJOR CUSTOMERS AND VENDORS

Five and three major customers who are dealers of the Company collectively accounted for 70% and 32% of the Company’s net revenue for the nine and three months ended September 30, 2008,    respectively.  These customers accounted for about 18%, 16%, 13%, 12% & 11% of the sales for the nine months ended September 30, 2008, respectively, including a related party owned by the Company's chief executive officer,  which accounted for about 11% of the total sales. Three customers accounted for about 11%, 11%, and 10% of the sales for the three months ended September 30, 2008, respectively. At September 30, 2008 and December 31, 2007, the total receivable balance due from these five customers was $0.

Five and one vendors collectively provided 57% and 10% of the Company’s purchase of raw materials for the nine and three months ended September 30, 2008, respectively. These vendors counted for about 13%, 12%, 11%, 11%, and 10% of the purchases for the nine months ended September 30, 2008, respectively. The Company did not have accounts payable to these vendors at September 30, 2008 and December 31, 2007.

 10. OTHER PAYABLES

Other payables mainly consisted of the purchase price of approximately $7,620,000 that Sinary was originally obligated to pay to Heilongjiang Weikang’s former owners within one year for the acquisition of Heilongjiang Weikang. This payable does not bear any interest.  On August 9, 2008, the State Administration for Industry and Commerce reissued Heilongjiang Weikang a "Foreign Invested Enterprise" business license to expire on February 9, 2009, effectively extending the payment date of the purchase price to the expiration date of the reissued license.

F-13

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

Other payables also consisted of the unpaid portion of the purchase price of approximately $10,104,000 that Heilongjiang Weikang obligated to pay to Tianfang’s former owners within one year from the acquisition date.  This payable does not bear any interest, and is payable in two installments, the first, in the amount of $2,000,000, is due 90 calendar days after the date of the stock transfer agreement, and the second, in the amount of $9,190,000, is due on the first anniversary of the agreement date.

11. DEFFERED TAX ASSET (LIABILITY), NET

Deferred tax represented differences between the tax bases and book bases of property, equipment and land.

At September 30, 2008 and December 31, 2007, deferred tax asset (liability) consisted of the following:

	September 30, 2008 (Unaudited)		December 31, 2007
Deferred tax asset arising from the acquisition of Heilongjiang Weikang	$	29,664	$	27,726
Deferred tax liability arising from the acquisition of Tianfang		(3,627,184)		-
Deferred tax asset (liability)	$	(3,597,520)	$	27,726

12. INCOME TAXES

Heilongjiang Weikang is exempt from income tax for three years from 2006 to 2008.  Net income for the nine and three months ended September 30, 2008 would have been lower by approximately $650,000 and $238,000, respectively if Heilongjiang Weikang was not subject an income tax holiday.

Sinary had net operating loss of approximately $650,000 at September 30, 2008 and December 31, 2007. A 100% valuation allowance has been established due to the uncertainty of its realization.

Tianfang is subject to normal PRC corporate income tax rate of 25%.

Heilongjiang Weikang is governed by the Income Tax Law of the PRC concerning the private enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments.  For the nine and three months ended September 30, 2008, the Company’s effective income tax rate differs from the US statutory rate  due to the effect of tax holiday.

13. STATUTORY RESERVES

Pursuant to the new corporate law of the PRC effective on January 1, 2006, the Company is now only required to maintain one statutory reserve by appropriating from its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings.

Surplus Reserve Fund

The Company is now only required to transfer 10% of its net income, as determined under the PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital.

F-14

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Common Welfare Fund

Common welfare fund is a voluntary fund that the Company can elect to transfer 5% to 10% of its net income to this fund. This fund can only be utilized on capital items for the collective benefit of the Company’s employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation.

14. CONTINGENCIES

The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in the North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’ s operations may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

The Company’s sales, purchases and expenses transactions are denominated in RMB and all of the Company’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be conducted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation in order to affect the remittance.

15. ACQUISITION OF TIANFANG AND PRO FORMA CONSOLIDATED STATEMENT OF INCOME

On October 25, 2007, Sinary entered into an equity interests transfer agreement with the owners of Heilongjiang Weikang to acquire 100% of the equity interests of Heilongjiang Weikang for the sum of 57 million RMB, or approximately 7.6 million US dollars.

On July 22, 2008, Heilongjiang Weikang completed the acquisition of 100% of the issued and outstanding equity interests of Tianfang for the aggregate purchase price of $15,000,000 (RMB 102,886,500).

The operating results of the Company for the nine months ended September 30, 2008 and Tianfang for the two months ended September 30, 2008 are included in the accompanying consolidated statements of operations from the acquisition date.  For convenience of reporting the acquisition for accounting purposes, August 1, 2008 has been designated as the acquisition date.

F-15

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

The following table summarizes the fair values of the assets acquired and liabilities assumed of Tianfang, at the date of acquisition.   The total consideration for acquisition exceeded fair value of the net assets acquired by $3,565,578. The excess was recorded as goodwill.

Cash	$	10,146
Accounts receivable		388,641
Other receivables		3,988
Inventory		45,161
Property and equipment		7,194,302
Land use right		8,117,686
Goodwill		3,565,578
Tax payable		(498,259	)
Advances from shareholder		(221,794	)
Deferred tax liability		(3,605,449	)
Purchase price	$	15,000,000

The following unaudited pro forma consolidated results of operations of the Company for the nine months ended September 30, 2008 and 2007 present the Company’s operations as if the acquisition of Sinary, Heilongjiang Weikang and Tianfang had occurred on January 1, 2008 and 2007, respectively.  The pro forma results are not necessarily indicative of the actual results that would have occurred had the acquisitions been completed as of the beginning of the periods presented, nor are they necessarily indicative of future consolidated results.

For the nine months ended September 30, 2008		Sinary	Heilongjiang Weikang			Tianfang			Pro forma Adjustments (a)			Pro forma Consolidated
Net Revenue	$		$	4,828,811		$	2,937,129		$			$	7,765,940
Cost of Revenue				1,737,747			951,097			144,193			2,833,037
Gross Profit				3,091,064			1,986,032			(144,193	)		4,932,903
Operating expenses:
Selling expenses				5,660			16,522						22,182
General and administrative expenses				467,592			196,287			216,289			880,168
Total operating expenses				473,252			212,809			216,289			902,350
Income from operations				2,617,812			1,773,223			(360,482	)		4,030,553
Total non-operating expenses				(4,989	)		(372	)					(5,361	)
Income (loss) before income tax				2,612,823			1,772,851			(360,482	)		4,025,192
Income tax							487,667			(90,120	)		397,547
Net income (loss)	$		$	2,612,823		$	1,285,184		$	(270,361	)	$	3,627,646

a) Pro forma adjustment is to record additional amortization of $132,023 for the land use right and increased depreciation of $228,459 for the fixed assets and related income tax effect of $90,120 as a result of the purchase of Tianfang.

F-16

WEIKANG BIO-TECHNOLOGY GROUP CO. INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

For the nine months ended September 30, 2007		Sinary	Heilongjiang Weikang			Tianfang		Pro forma Adjustments (b)			Pro forma Consolidated
Net Revenue	$		$	2,935,010		$	10,323,968	$			$	13,258,978
Cost of Revenue				1,474,004			4,707,287		89,375			6,270,666
Gross Profit				1,461,006			5,616,681		(89,375	)		6,988,312
Operating expenses:
Selling expenses				7,651			1,110,861					1,118,512
General and administrative expenses				230,816			243,586		177,811			652,213
Total operating expenses				238,467			1,354,447		177,811			1,770,725
Income from operations				1,222,539			4,262,234		(267,187	)		5,217,586
Total non-operating expenses				(1,849	)		7,689					5,840
Income (loss) before income tax				1,220,690			4,269,923		(267,187	)		5,223,426
Income tax							1,029,377		(106,800	)		922,577
Net income (loss)	$		$	1,220,690		$	3,240,546	$	(160,387	)	$	4,300,849

b) Pro forma adjustment is to record additional amortization of $123,495 for the land use right and increased depreciation of $143,692 for the fixed assets and related income tax effect of $106,800 as a result of the purchase of Heilongjiang Weikang and Tianfang.

16. RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform to the nine month periods ended September 30, 2008 presentation.

F-17

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the Securities and Exchange Commission (collectively called the "Filings") contain or may contain forward-looking statements and information that are based upon beliefs of and information currently available to, Company's management as well as estimates and assumptions made by Company's management. Readers are urged not to place undue reliance on these forward-looking statements, which are  only predictions and speak only as of the date hereof. When used in the filings, the words "anticipate", "believe", "estimate", "expect", "future", "intend", "plan", or the negative of these terms and similar expressions as they relate to Company or Company's management identify forward-looking statements. Such statements reflect the current view of Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors (including the risk contained in the section of operations and results of operations, and any businesses that Company may acquire.) Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although Company believes that the expectations reflected in the forward-looking statements are reasonable, Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform to these statements to actual results. Readers are urged to carefully review and consider the various disclosures made throughout the  entirety of this quarterly report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition,  results of operations, and prospects.

Our financial statements are prepared in US Dollars and in accordance with accounting principles generally accepted in the United States. See "Foreign Currency Translation and Comprehensive Income (Loss)" and "Foreign Exchange Rates" below for information concerning the exchange rates at the  Renminbi ("RMB") were translated into US Dollars ("USD") at various pertinent dates and for pertinent periods.

Overview

Weikang Bio-Technology Company, Inc. (“we”, “us”, the “Company”) was originally incorporated in Florida on May 12, 2004 under the name Expedition Leasing, Inc. On December 7, 2007, we acquired Sinary Bio-Technology Holdings Group, Inc. (“Sinary”), a Nevada corporation and, as a result, Sinary’s wholly owned subsidiary Heilongjiang Weikang Bio-Technology Group Co., Ltd. (“Heilongjiang Weikang”), a limited liability company in the People’s Republic of China (“China” or “PRC”), by way of the exchange of 24,725,200 shares of our common stock for 100% of the issued and outstanding common stock of Sinary. We accounted for this share exchange transaction as a reverse acquisition and recapitalization and, as a result, our consolidated financial statements include the historical assets and liabilities of Sinary in our capital structure. Please see Note 1 to our unaudited consolidated financial statements included in this report for further details of this stock exchange transaction.

Having no substantive operation of its own, Sinary, through Heilongjiang Weikang, engages in the research, development, manufacturing, marketing, and sales of health and nutritional supplements in China. Heilongjiang Weikang is located in Heilongjiang Province in Northeastern China, with our principal office and manufacturing facility located in the Economic and Technology Development Zone in the city of Shuangcheng, approximately 42 kilometers south of the provincial capital Harbin. All of our products are Chinese herbal-based health and nutritional supplements. We actively seek to maintain and improve the quality of its products, and since April 2006, Weikang has implemented the “GB/T19001-2000 idt ISO9001:2000” quality assurance management system to all of its manufacturing processes.

Through Heilongjiang Weikang, we currently manufacture and distribute in China a series of internally developed health supplements under a Chinese trade name which English transliteration is “Rongrun”. The “Rongrun”-line presently include seven products. We also developed two new products during the end of 2007, which have been approved by the Heilongjiang Department of Health.

On July 22, 2008, Heilongjiang Weikang completed the acquisition of 100% of the issued and outstanding equity interests of Tianfang (Guizhou) Pharmaceutical Co., Ltd. (“Tianfang”), a Chinese limited liability company, for the aggregate purchase price of $15,000,000, pursuant to a Stock Transfer Agreement dated and entered into on June 30, 2008 by and among the Heilongjiang Weikang, Tianfang, and Tianfang’s two shareholders, Beijing Shiji Qisheng Trading Co., Ltd. and Tri-H Trade (U.S.A.) Co., Ltd.

Tianfang was incorporated in the Guizhou Province, PRC in 1998.  Tianfang is engaged in the development, manufacture and distribution of Chinese herbal extract products and GMP certified western prescriptive medicine.  

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Recent Events

As reported on our current report on Form 8-K filed with the SEC on June 18, 2008, on June 10, 2008, the Company effected a merger, after stockholder approval by written consent, between the Company (as Expedition Leasing, Inc.) and its wholly-owned subsidiary, Weikang Bio-Technology Group Company, Inc., a Nevada corporation, by filing its Articles of Merger with the Secretary of State of Nevada, with the subsidiary as the surviving corporation. In connection with this merger, the Company has changed its name to “Weikang Bio-Technology Group Company, Inc.” to better reflect our business.

 On August 9, 2008, the Heilongjiang Office of the State Administration for Industry and Commerce (“SAIC”) reissued to Heilongjiang Weikang a business license to expire on February 9, 2009. When Sinary first acquired Heilongjiang Weikang in November 2007, SAIC issued a business license to Heilongjiang Weikang as a foreign invested enterprise. Under applicable PRC regulations, Sinary had three months from the issuance date of that license to remit the purchase price of Heilongjiang Weikang to the sellers, provided that Sinary may apply for an extension. The reissued license effectively extends the payment due date now to the expiration date of the reissued license.

Critical Accounting Policies and Estimates

Our management's discussion and analysis of our financial condition and results of operations are based on our combined financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are more fully described in Note 2 to our combined financial statements, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis:

Basis of Presentation on Principle of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Sinary, and the results of operations of Weikang, Sinary’s wholly-owned subsidiary, from the date of Sinary’s acquisition of Weikang, and Tianfang, Weikang’s wholly-owned subsidiary, from the date of Weikang’s acquisition of Tianfang. All significant inter-company accounts and transactions have been eliminated in consolidation.

Accounts Receivable

The Company’s policy is to maintain reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.

Inventories

Inventories are valued at the lower of cost or market with cost determined on a moving weighted average basis. Cost of work in progress and finished goods comprises direct material, direct production cost and an allocated portion of production overheads.

-5-

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for all assets with salvage value of 10% and estimated lives ranging from 3 to 20 years as follows:

Building	20 years
Vehicle	5 years
Office Equipment	3-7 years
Production Equipment	3-10 years

Revenue Recognition

The Company's revenue recognition policies are in compliance with Securities and Exchange Commission (SEC) Staff Accounting Bulletin (“SAB”) 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue.

Sales revenue represents the invoiced value of goods, net of value-added tax (“VAT”). All of the Company’s products that are sold in the PRC are subject to Chinese value-added tax of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing their finished product. The Company recorded VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables.

Foreign Currency Translation and Comprehensive Income (Loss)

The Company’s functional currency is the Renminbi (“RMB”). For financial reporting purposes, RMB has been translated into United States dollars ("USD") as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated other comprehensive income". Gains and losses resulting from foreign currency transactions are included in income. There has been no significant fluctuation in exchange rate for the conversion of RMB to USD after the balance sheet date.

The Company uses SFAS No 130, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders.

Recent Accounting Pronouncements

Accounting for Financial Guarantee Insurance Contracts

 In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts, an interpretation of FASB Statement No. 60.”  The scope of this Statement is limited to financial guarantee insurance (and reinsurance) contracts, as described in this Statement, issued by enterprises included within the scope of Statement 60. Accordingly, this Statement does not apply to financial guarantee contracts issued by enterprises excluded from the scope of Statement 60 or to some insurance contracts that seem similar to financial guarantee insurance contracts issued by insurance enterprises (such as mortgage guaranty insurance or credit insurance on trade receivables). This Statement also does not apply to financial guarantee insurance contracts that are derivative instruments included within the scope of FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This Statement will not have an impact on the Company’s financial statements.

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The Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.”  This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy).  This Statement will not have an impact on the Company’s financial statements.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133.”  This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.  Based on current conditions, the Company does not expect the adoption of SFAS 161 to have a significant impact on its results of operations or financial position.

Noncontrolling Interests in Consolidated Financial Statements – An Amendment of ARB No. 51

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51 (“SFAS 160”). SFAS 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the parent’s equity. The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement. SFAS 160 clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss will be measured using the fair value of the noncontrolling equity investment on the deconsolidation date. SFAS 160 also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Based on current conditions, the Company does not expect the adoption of SFAS 160 to have a significant impact on its results of operations or financial position.

Business Combinations

 In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R will significantly change the accounting for business combinations. Under SFAS 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS 141R will change the accounting treatment for certain specific items, including:

· Acquisition costs will be generally expensed as incurred;

· Noncontrolling interests (formerly known as “minority interests” – see SFAS 160 discussion below) will be valued at fair value at the acquisition date;

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· Acquired contingent liabilities will be recorded at fair value at the acquisition date and subsequently measured at either the higher of such amount or the amount determined under existing guidance for non-acquired contingencies;

· In-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date;

· Restructuring costs associated with a business combination will be generally expensed subsequent to the acquisition date; and

· Changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense.

 SFAS 141R also includes a substantial number of new disclosure requirements. SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Earlier adoption is prohibited. Accordingly, since we are a calendar year-end company we will continue to record and disclose business combinations following existing GAAP until January 1, 2009. The Company expects SFAS 141R will have an impact on accounting for business combinations once adopted but the effect is dependent upon acquisitions at that time.

Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an Amendment of FASB Statements No. 87, 88, 106, and 132R

In September 2006, the FASB, issued SFAS, No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an Amendment of FASB Statements No. 87, 88, 106, and 132R,” which requires employers to recognize the underfunded or overfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in the funded status in the year in which the changes occur through accumulated other comprehensive income. Additionally, SFAS No. 158 requires employers to measure the funded status of a plan as of the date of its year-end statement of financial position. The new reporting requirements and related new footnote disclosure rules of SFAS No. 158 are effective for fiscal years ending after December 15, 2006. The Company adopted the provisions of SFAS No. 158 for the year end 2006, and the effect of recognizing the funded status in accumulated other comprehensive income was not significant. The new measurement date requirement applies for fiscal years ending after December 15, 2008. 

Accounting for Nonrefundable Advance Payments for Goods or Services Received for use in Future Research and Development Activities

 In June 2007, the FASB issued FASB Staff Position No. EITF 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for use in Future Research and Development Activities” (“FSP EITF 07-3”), which addresses whether nonrefundable advance payments for goods or services that used or rendered for research and development activities should be expensed when the advance payment is made or when the research and development activity has been performed.  Management is currently evaluating the effect of this pronouncement on financial statements.

Results of Operations

Comparison of Three Months Ended September 30, 2008 and September 30, 2007.

On October 25, 2007, Sinary entered into an equity interests transfer agreement with the owners of Heilongjiang Weikang to acquire 100% of the equity interests of Heilongjiang Weikang for the sum of 57 million RMB, or approximately 7.6 million US dollars. The pro forma financial information of the consolidated statement of income of the Company as if the acquisition of Sinary and Heilongjiang Weikang had occurred as of the beginning of fiscal 2007 is presented in Note 15 to our unaudited consolidated financial statements included in this report.

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The following table summarizes our results of operations. The table and the discussion below should be read in conjunction with the unaudited financial statements and the notes thereto appearing elsewhere in this report. 

	Three Months Ended September 30,
	2008				2007 (pro forma)
	(in U.S. Dollars, except for percentages)
Sales	$	3,452,049	100	%	$	1,063,733	100	%
Cost of sales	$	1,048,897	30	%	$	568,172	53	%
Gross Profit	$	2,403,152	70	%	$	495,561	47	%
Operating Expense	$	214,292	6	%	$	79,622	7.5	%
Income From Operations	$	2,188,860	63	%	$	415,939	39	%
Other Expenses	$	3,502	0.1	%	$	1,792	0.17	%
Income tax expenses	$	352,255	10	%	$	-	-	%
Net Income	$	1,833,103	53	%	$	414,147	39	%

Revenues. During the three months ended September 30, 2008, we had revenues of $3.45 million as compared to revenues of $1.06 million for the three months ended September 30, 2007, an increase of approximately $2.39 million or 225%. This increase is attributable to increased demand of our products from our dealers and distributors and combined operations of Heilongjiang Weikang and Tianfang following the acquisition of 100% of Tianfang by Weikang on July 22, 2008. We believe that our sales will continue to grow as we continue to improve the quality of our existing products and to develop new products.

Cost of Revenues. Cost of revenues increased $480,725 or 85%, from $568,172 for the three months ended September 30, 2007 to $1,048,897 for the same period in 2008. The increase was mainly due to the increase of production and sales activities during the third fiscal quarter in 2008. We had decrease in cost of revenue as a percentage of net revenues for the three months ended September 30, 2008, approximately 30% as compared to approximately 53% for the three months ended June 30, 2007, which was attributable to increased production volume with decreased average production cost.

Gross Profits. Gross profit was $2.4 million for the three months ended September 30, 2008 as compared to $0.5 million for the same period in 2007, representing gross margins of approximately 70% and 47% of revenues, respectively. The increase in our gross profits was mainly due to decrease in cost of revenue as a percentage of net revenue.

Operating Expenses. Total operating expenses consists of selling, general and administrative expenses of $214,292 for the three months ended September 30, 2008 as compare to $79,622 for the three months ended September 30, 2007, an increase of $134,670 or 169%. This increase is in proportion with our increased sales and production activities.

Net Income. Our net income for the three months ended September 30, 2008 was $1.83 million as compared to $0.41 million for the same period in 2007. While this is in part due to increased sales volume with decreased average production cost, Heilongjiang Weikang also continued to benefit from our exemption from income tax. Our management believes that net income will continue to increase as we continue to offer better quality and more variety of products and to improve our manufacturing efficiency.

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Comparison of Nine Months Ended September 30, 2008 and September 30, 2007.

On October 25, 2007, Sinary entered into an equity interests transfer agreement with the owners of Heilongjiang Weikang to acquire 100% of the equity interests of Heilongjiang Weikang for the sum of 57 million RMB, or approximately 7.6 million US dollars. The pro forma financial information of the consolidated statement of income of the Company as if the acquisition of Sinary and Heilongjiang Weikang had occurred as of the beginning of fiscal 2007 is presented in Note 15 to our unaudited consolidated financial statements included in this report.

The following table summarizes our results of operations. The table and the discussion below should be read in conjunction with the unaudited financial statements and the notes thereto appearing elsewhere in this report.

	Nine Months Ended September 30,
	2008				2007 (pro forma)
	(in U.S. Dollars, except for percentages)
Sales	$	6,651,947	100	%	$	2,935,010	100	%
Cost of sales	$	2,214,935	33	%	$	1,474,004	50	%
Gross Profit	$	4,437,012	67	%	$	1,461,006	50	%
Operating Expense	$	587,714	9	%	$	238,467	8	%
Income From Operations	$	3,849,298	58	%	$	1,222,539	42	%
Other Expenses	$	4,648	0.07	%	$	1,849	0.06	%
Income tax expenses	$	352,255	5.3	%	$	-	-	%
Net Income	$	3,492,395	52.5	%	$	1,220,690	42	%

Revenues. During the nine months ended September 30, 2008, we had revenues of $6.65 million as compared to revenues of $2.94 million for the nine months ended September 30, 2007, an increase of approximately $3.72 million or 127%. This increase is attributable to increased demand from our dealers and distributors and combined operations of Heilongjiang Weikang and Tianfang following the acquisition of 100% of Tianfang by Weikang on July 22, 2008. We believe that our sales will continue to grow as we continue to improve the quality of our existing products and to develop new products.

Cost of Revenues. Cost of revenues increased $740,931 or 50%, from $1.47 million for the nine months ended September 30, 2007 to $2.21 million for the same period in 2008. The increase was mainly due to the increase of production and sales activities during the nine months ended September 30, 2008. We had decrease in cost of revenue as a percentage of net revenues for the nine months ended September 30, 2008, approximately 33% as compared to approximately 50% for the nine months ended September 30, 2007, which was attributable to increased production volume with decreased average production cost. 

Gross Profit. Gross profit was $4.44 million for the nine months ended September 30, 2008 as compared to $1.46 million for the same period in 2007, representing gross margins of approximately 67% and 50% of revenues, respectively. The increase in our gross profits was mainly due to decrease in cost of revenue as a percentage of net revenue.

Operating Expenses. Total operating expenses consists of selling, general and administrative expenses of $587,714 for the nine months ended September 30, 2008 as compare to $238,467 for the nine months ended September 30, 2007, an increase of $349,247 or 146%. This increase is in proportion to our increased sales and production activities.

Net Income. Our net income for the nine months ended September 30, 2008 was $3.49 million as compared to $1.22 million for the same period in 2007. While this is in part due to increased sales volume with decreased average production cost, we also continued to benefit from our exemption from income tax for Heilongjiang Weikang. Our management believes that net income will continue to increase as we continue to offer better quality and more variety of products and to improve our manufacturing efficiency.

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Liquidity and Capital Resources

As of September 30, 2008, the Company had cash and cash equivalents of approximately $1.14 million, other current assets of approximately $2.03 million, and current liabilities of approximately $19.34 million. Negative working capital amounted to $16.18 million at September 30, 2008. The ratio of current assets to current liabilities was 0.16-to-1 as of September 30, 2008.

 The negative working capital and the ratio of current assets to current liabilities are primarily related to other payable of approximately $7,620,000 that Sinary is obligated to pay to the prior owners of Heilongjiang Weikang on or before February 9, 2009, which is non-interest bearing; and the remaining purchase price of approximately $10,104,000 that Heilongjiang Weikang obligated to pay to Tianfang’s former owners within one year from the acquisition date. This payable also does not bear any interest, and is payable in two installments, the first, in the amount of $2,000,000, is due 90 calendar days after the date of the stock transfer agreement, and the second, the remaining balance, is due on the first anniversary of the agreement date.

The following is a summary of cash provided by or used in each of the indicated types of activities during the period ended September 30, 2008: 

	2008			2007
Cash provided by (used in):				(Pro Forma)
Operating Activities	$	3,698,792		$	1,896,456
Investing Activities	$	(4,937,429	)	$	(95,242	)
Financing Activities	$	2,225,514		$	(1,740,146	)

Net cash provided by operating activities was $3.7 million for the nine months ended September 30, 2008, as compared to net cash provided by operating activities of $1.9 million for the nine months ended September 30, 2007. The increase in net cash flow from operating activities for the nine months ended September 30, 2008 was mainly due to an increase in value added tax payable and accounts payables.  In addition, our net income for nine months ended September 30, 2008 increased significantly as compared to the same period of 2007, which provided more cash to the Company.

Net cash used in investing activities was $4.94 million for the nine months ended September 30, 2008, as compared to net cash used in investing activities of $95,242 for the same period of 2007.  The increase of net cash used in investing activities during the nine months ended September 30, 2008 was mainly due to the partial payment made for the acquisition of Tianfang during the nine months ended September 30, 2008. The acquisition was completed on July 22, 2008, and Heilongjiang Weikang now owns 100% of Tianfang.

Net cash provided by financing activities was $2.23 million for the nine months ended September 30, 2008 as compared to net cash used in financing activities of $1.74 million for the same period of 2007. The increase of net cash from financing activities for the nine months ended September 30, 2008 was mainly due to repayment of Weikang’s management for the sales receipts that was originally received by Weikang’s management on behalf of Weikang.

We do not believe that inflation had a significant negative impact on our results of operations during 2008.

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Foreign Exchange Rates

All of our sales are denominated in Renminbi (“RMB”). As a result, changes in the relative values of U.S. Dollars and RMB affect our reported levels of revenues and profitability as the results are translated into U.S. Dollars for reporting purposes. Fluctuations in exchange rates between the U.S. dollar and RMB affect our gross and net profit margins and could result in foreign exchange and operating losses.

Our results of operations and cash flow are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in our statement of shareholders’ equity. We recorded net foreign currency gains of $633,512 and $76,268 during the nine and three months ending September 30, 2008, respectively. We have not used any forward contracts, currency options or borrowings to hedge our exposure to foreign currency exchange risk. We cannot predict the impact of future exchange rate fluctuations on our results of operations and may incur net foreign currency losses in the future.

Our financial statements are expressed in U.S. dollars but the functional currency of our operating subsidiary is RMB. The value of your investment in our stock will be affected by the foreign exchange rate between U.S. dollars and RMB. To the extent we hold assets denominated in U.S. dollars, including the net proceeds to us from this offering, any appreciation of the RMB against the U.S. dollar could result in a change to our statement of operations and a reduction in the value of our U.S. dollar denominated assets. On the other hand, a decline in the value of RMB against the U.S. dollar could reduce the U.S. dollar equivalent amounts of our financial results, the value of your investment in our company and the dividends we may pay in the future, if any, all of which may have a material adverse effect on the price of our stock.

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements or otherwise stated in this MD&A were as follows:

	September 30, 2008
Balance sheet items, except for the registered and paid-up capital, as of September 30, 2008		USD0.1467:RMB1
Amounts included in the statement of operations, statement of changes in stockholders’ equity and statement of cash flows for the period January 1, 2008 to September 30, 2008		USD0.1432:RMB1

Off-Balance Sheet Arrangements

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Not Applicable

ITEM 4.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of September 30, 2008, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective.

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Management’s Assessment of Significant Deficiency in Internal Control over Financial Reporting

In our annual report on Form 10-K for the year ended December 31, 2007, we reported certain significant deficiency in our accounting and finance personnel. Specifically, although our accounting staff is professional and experienced in accounting requirements and procedures generally accepted in the PRC, management has determined that they require substantial training and assistance in U.S. GAAP matters so as to meet with the higher demands of being a U.S. public company. Our management’s assessment of the effectiveness of internal control over financial reporting is that this significant deficiency continues to exist as of September 30, 2008. In order to correct such deficiency, we are committed to hiring additional accounting and operations personnel and engaging outside contractors with technical accounting expertise, as needed, and reorganizing the accounting and finance department to ensure that accounting personnel with adequate experience, skills and knowledge relating to complex, non-routine transactions are directly involved in the review and accounting evaluation of our complex, non-routine transactions.

We believe that the foregoing steps will remediate the significant deficiency identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934) during the quarter ended September 30, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.                      OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

None

ITEM 1A.  RISK FACTORS

 Not required

ITEM 2.                      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 None

ITEM 3.                      DEFAULTS UPON SENIOR SECURITIES

 None

ITEM 4.                      SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

 Reference is made to our Information Statement on Form DEF14C filed with the SEC on May 14, 2008, and the information contained in the Information Statement is incorporated herein by reference.

ITEM 5.                      OTHER INFORMATION

 None

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ITEM 6.  EXHIBITS

The following exhibits are filed herewith:                       

Exhibit No.	Description
2.1	Stock Transfer Agreement dated as of June 30, 2008 by and among Heilongjiang Weikang Bio-Technology Group Co., Ltd., Beijing Shiji Qisheng Trading Co., Ltd., Tri-H Trade (U.S.A.) Co., Ltd., and Tianfang (Guizhou) Pharmaceutical Co., Ltd. (1)
3.1	Articles of Merger filed with the Secretary of State of Nevada on June 10, 2008 (2)
3.2	Articles of Merger filed with the Secretary of State of Florida on June 12, 2008 (2)
4	2008 Stock Incentive Plan (3)
10.1	Stock Transfer Agreement dated as of June 30, 2008 by and among Heilongjiang Weikang Bio-Technology Group Co., Ltd., Beijing Shiji Qisheng Trading Co., Ltd., Tri-H Trade (U.S.A.) Co., Ltd., and Tianfang (Guizhou) Pharmaceutical Co., Ltd. (4)
31.1	Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
31.2	Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
32.1	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
32.2	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

* Filed herewith.

(1)	Filed as an Exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on July 24, 2008 and incorporated herein by reference.
(2)	Filed as an Exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on June 18, 2008 and incorporated herein by reference.
(3)	Filed as an Exhibit to the Registrant’s Form S-8 filed with the SEC on June 24, 2008 and incorporated herein by reference.
(4)	Filed as an Exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on July 24, 2008 and incorporated herein by reference.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

November 19, 2008	WEIKANG BIO-TECHNOLOGY GROUP CO, INC.
	By:	/s/ Yin Wang
		Yin Wang Chief Executive Officer (Principal Executive Officer)

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