[X]
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QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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[
]
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Nevada
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95-4755369
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(State of Other
Jurisdiction of incorporation or organization)
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(I.R.S. Employer
I.D. No.)
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Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller
reporting company ý
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TABLE OF CONTENTS |
Page
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PART I. FINANCIAL
INFORMATION
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Item 1. Financial Statements
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3
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Consolidated Balance Sheets as of December 31, 2008 (Unaudited) and June 30, 2008 (Audited) |
3
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Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended December 31, 2008 and 2007 (Unaudited) |
4
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Consolidated Statements of Cash Flows for the six months ended December 31, 2008 and 2007 (Unaudited) |
5
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Notes to Condensed Consolidated Financial Statements |
6-11
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation |
12
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Item 3. Quantitative and Qualitative Disclosures About Market Risks |
16
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Item
4. Evaluation of Controls and Procedures
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16
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PART
II. OTHER INFORMATION
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Item 1. Legal Proceedings |
17
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Item 1A. Risk Factors |
17
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
17
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Item 3. Defaults Upon Senior Securities |
17
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Item 4. Submission of Matters to a Vote of Security Holders |
17
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Item 5. Other Information |
17
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Item 6. Exhibits |
17
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Signatures 18 |
December 31,
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June 30,
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|||||||
2008
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2008
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|||||||
(Unaudited)
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||||||||
Assets:
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||||||||
Current
assets:
|
||||||||
Cash and cash
equivalents
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$ | 3,678 | $ | 23,203 | ||||
Accounts
receivable
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5,317 | - | ||||||
Other receivables
|
1,306,101 | 1,163854 | ||||||
Inventory
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6,755,844 | 2,076,016 | ||||||
Advances to
suppliers
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55,007 | 5,884,877 | ||||||
Prepaid expenses
|
385 | 385 | ||||||
Total
current assets:
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8,126,332 | 9,148,335 | ||||||
Property
and equipment, net:
|
1,755,880 | 695,163 | ||||||
Other
assets:
|
||||||||
Intangible
assets, net
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4,492,377 | 4,515,047 | ||||||
Total
assets:
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$ | 14,374,589 | $ | 14,358,545 | ||||
Liabilities
and stockholders’ equity:
|
||||||||
Current
liabilities:
|
||||||||
Accounts payable and accrued
expenses
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$ | 150,501 | $ | 249,212 | ||||
Income taxes
payable
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694,573 | 1,216,130 | ||||||
Other taxes
payable
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127,054 | 126,362 | ||||||
Other current
liabilities
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69,446 | 68,435 | ||||||
Due to
stockholders
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79,350 | 79,350 | ||||||
Total
current liabilities:
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1,120,924 | 1,739,489 | ||||||
Stockholders’
equity:
|
||||||||
Series A convertible preferred
stock, $0.001 par value,
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||||||||
100,000,000 shares
authorized, 27,011,477 shares issued and
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||||||||
outstanding,
respectively
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27,011 | 27,011 | ||||||
Common stock, $0.001 par value,
100,000,000 shares authorized
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||||||||
19,542,572 shares
issued and outstanding
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19,543 | 19,543 | ||||||
Additional paid-in
capital
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4,466,731 | 4,466,731 | ||||||
Retained earnings
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6,143,431 | 6,169,574 | ||||||
Statutory reserve
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378,782 | 378,782 | ||||||
Accumulated other comprehensive
income
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2,218,167 | 1,557,415 | ||||||
Total
stockholders’ equity:
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13,253,665 | 12,619,056 | ||||||
Total
liabilities and stockholders’ equity:
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$ | 14,374,589 | $ | 14,358,545 | ||||
The accompanying notes are an integral part of these financial
statements
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For the Three Months Ended
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For the Six Months Ended
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|||||||||||||||
December 31,
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December 31,
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|||||||||||||||
2008
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2007
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2008
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2007
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|||||||||||||
Sales:
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$ | 31,118 | $ | 3,644,824 | $ | 51,112 | $ | 5,010,882 | ||||||||
Cost
of goods sold:
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40,849 | 1,983,135 | 59,154 | 2,383,374 | ||||||||||||
Gross
profit:
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(9,731 | ) | 1,661,689 | (8,042 | ) | 2,627,508 | ||||||||||
Operating
expenses:
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||||||||||||||||
Selling, general and
administrative
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8,621 | 559,912 | 17,808 | 818,492 | ||||||||||||
Income
(loss) from operations:
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(18,352 | ) | 1,101,777 | (25,850 | ) | 1,809,016 | ||||||||||
Other
income (expenses):
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(5,831 | ) | 89 | (293 | ) | 4,590 | ||||||||||
Income
(loss) before provision for income tax:
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(24,183 | ) | 1,101,866 | (26,143 | ) | 1,813,606 | ||||||||||
Provision
for income tax:
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- | 165,280 | - | 272,041 | ||||||||||||
Net
income (loss):
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(24,183 | ) | 936,586 | (26,143 | ) | 1,541,565 | ||||||||||
Other
comprehensive income:
|
||||||||||||||||
Foreign currency translation
adjustment
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17,719 | 285,907 | 660,752 | 418,423 | ||||||||||||
Comprehensive
income (loss):
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$ | ( 6,464 | ) | $ | 1,222,493 | $ | 634,609 | $ | 1,959,988 | |||||||
Basic
earnings per share:
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$ | ( 0.00 | ) | $ | 0.09 | $ | ( 0.00 | ) | $ | 0.24 | ||||||
Diluted
earnings per share:
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$ | ( 0.00 | ) | $ | 0.05 | $ | ( 0.00 | ) | $ | 0.08 | ||||||
Weighted
average shares outstanding:
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||||||||||||||||
Basic:
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20,072,209 | 10,910,858 | 20,072,209 | 6,348,381 | ||||||||||||
Diluted:
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20,072,209 | 20,072,209 | 20,072,209 | 20,072,209 |
Six
Months Ended
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||||||||
December
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||||||||
2008
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2007
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|||||||
Cash
flows from operating activities:
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Net
income (loss)
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$ | (26,143 | ) | $ | 1,541,565 | |||
Adjustments
to reconcile net income to net cash
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||||||||
provided
(used) by operating activities:
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||||||||
Depreciation
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124,903 | 114,286 | ||||||
Amortization
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47,340 | 43,629 | ||||||
Bad debt expense
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- | (4,321 | ) | |||||
Changes in assets and
liabilities:
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||||||||
Accounts
receivable
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223 | 1,354,335 | ||||||
Other
receivables
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(135,633 | ) | 118,292 | |||||
Inventory
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(4,659,853 | ) | (3,918,049 | ) | ||||
Advances
to suppliers
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4,679,908 | 342,522 | ||||||
Prepaid
expenses
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- | 154 | ||||||
Accounts
payable and accrued expenses
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(96,562 | ) | 199,597 | |||||
Income
tax payable
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- | 156,341 | ||||||
Other
taxes payable
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- | 115,700 | ||||||
Other
current liabilities
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(1,968 | ) | - | |||||
Total
adjustments:
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(41,642 | ) | (1,477,514 | ) | ||||
Net cash provided by (used in)
operating activities:
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(67,785 | ) | 64,051 | |||||
Cash
flows from investing activities:
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||||||||
Acquisition of property and
equipment
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(8,427 | ) | (566 | ) | ||||
Net cash used in investing
activities:
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(8,427 | ) | (566 | ) | ||||
Cash
flows from financing activities:
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||||||||
Cash acquired in reverse merger
transaction
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- | 2,087 | ||||||
Net cash provided by financing
activities:
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- | 2,087 | ||||||
Effect
of foreign currency translation on cash:
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56,687 | 1,872 | ||||||
Net
increase (decrease) in cash and cash equivalents:
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(19,525 | ) | 67,444 | |||||
Cash
and cash equivalents – beginning:
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23,203 | 4,892 | ||||||
Cash
and cash equivalents – ending:
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$ | 3,678 | $ | 72,336 |
Three
Months Ended December 31,
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||||||||
2008
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2007
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|||||||
Net
income (loss)
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$ | ( 24,183 | ) | $ | 936,586 | |||
Weighted
average common shares
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20,072,209 | 10,910,858 | ||||||
Effect
of diluted securities:
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- | 9,161,351 | ||||||
Weighted
average common shares
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20,072,209 | 20,072,209 | ||||||
Basic
net income per share
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$ | ( 0.00 | ) | $ | 0.09 | |||
Diluted
net income per share
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$ | ( 0.00 | ) | $ | 0.05 |
Six
Months Ended December 31,
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||||||||
2008
|
2007
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|||||||
Net
income (loss)
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$ | ( 26,143 | ) | $ | 1,541,565 | |||
Weighted
average common shares
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20,072,209 | 6,348,381 | ||||||
Effect
of diluted securities:
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- | 13,723,828 | ||||||
Weighted
average common shares
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20,072,209 | 20,072,209 | ||||||
Basic
net income per share
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$ | ( 0.00 | ) | $ | 0.24 | |||
Diluted
net income per share
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$ | ( 0.00 | ) | $ | 0.08 |
December 31,
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June 30,
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|||||||
2008
|
2008
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|||||||
Food
for frogs
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$ | 29,770 | $ | 28,049 | ||||
Food
for pigs
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5,517,746 | 29,541 | ||||||
Frogs
in process
|
518,421 | 305,259 | ||||||
Pigs
in progress
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680,977 | 278,499 | ||||||
Packaging
supplies
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8,930 | - | ||||||
Finished
goods
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- | 1,434,668 | ||||||
Total
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$ | 6,755,844 | $ | 2,076,016 |
December 31,
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June 30,
|
|||||||
2008
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2008
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|||||||
Buildings
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$ | 1,240,883 | $ | 1,234,117 | ||||
Equipment
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176,145 | 254,444 | ||||||
Breeding
livestock
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78,709 | 1,223 | ||||||
Construction
in progress
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1,194,012 | 9,705 | ||||||
2,689,749 | $ | 1,499,489 | ||||||
Less:
accumulated depreciation
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933,869 | 804,326 | ||||||
Total
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$ | 1,755,880 | $ | 695,163 |
December 31,
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June 30,
|
|||||||
2008
|
2008
|
|||||||
Rights
to use land
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$ | 4,733,055 | $ | 4,707,245 | ||||
Less:
accumulated amortization
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240,678 | 192,198 | ||||||
Total
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$ | 4,492,377 | $ | 4,515,047 |
2009
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$ | 88,596 | ||
2010
|
88,596 | |||
2011
|
88,596 | |||
2012
|
88,596 | |||
2013
|
88,596 | |||
2014
and thereafter
|
3,977,303 | |||
Total
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$ | 4,420,283 |
·
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Acquisition
of a liquor factory or medical wine factory with the necessary Good
Manufacturing Practices (“GMP”) certification from the
government.
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·
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Acquisition
of a pharmaceutical factory or healthcare products factory with a GMP
certification.
|
31
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Rule
13a-14(a) Certification
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32
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Rule
13a-14(b) Certification
|
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CHINA
SXAN BIOTECH, INC.
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Date:
February 17, 2009
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By: /s/
Feng Zhen Xing
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Feng
Zhen Xing, Chief Executive Officer and Chief Financial
Officer
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