**U.S. SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

**FORM 10-KSB**

 

**ANNUALREPORT PURSUANT TO SECTION 13 OR 15(D) OFTHE SECURITIES AND EXCHANGE ACT OF 1934 FOR THE FISCALYEAR ENDED DECEMBER 31, 2003**

 

**Jasmine’s Garden**

(Exact name of issuer in its charter)

 

| **Nevada**                                                                                                                                  |   | **91-2132336**              |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|
| (State of Incorporation)                                                                                                                    |   | (I.R.S. Employer I.D. No.:) |
|                                                                                                                                        |   |                        |
| **2/F North Wondial Building,  Keji South 6 Road,  Shenzhen High-Tech Industrial Park  Shennan Ave  Shenzhen, P.R. China  86-755-38252698** |
| (Address and telephone number of principal  executive offices)                                                                              |

 

SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT: **None**

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Title of each class to be soregistered:  **Common Stock**

 

Check whether the issuer (1) filed all reports to be filed by Section13 or 15(d) of the Exchange Act during the past 12 months (or for such shorterperiod that the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.

Yes ý   No o

 

Check if there is no disclosure ofdelinquent filers in response to Item 405 of Regulation S-B is not contained inthis form, and no disclosure will be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-KSB or any amendments to this Form10-KSB. o

 

The issuer’s revenues for the Fiscal Year ended December 31, 2003 were$808. The aggregate market value of the voting Common Stock held bynon-affiliates of the issuer computed by reference to the closing sales priceof such Common Stock, as of April 5, 2004 was $13,502,940.  As of April 5, 2004, there were 47,975,400shares of the issuer’s Common Stock outstanding.

 

The following documents are incorporated by reference:

 

Transitional Small Business Disclosure Format (check one) Yes                o            No           ý

 

 

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TABLE OF CONTENTS

 
| PART I     |                                                                                  |   |
|------------|---------------------------------------------------------------------------------------|--------|
|       |                                                                                  |   |
| ITEM 1.    | DESCRIPTION OF BUSINESS                                                               |   |
|       |                                                                                  |   |
| ITEM 3.    | LEGAL PROCEEDINGS                                                                     |   |
|       |                                                                                  |   |
| ITEM 4.    | SUBMISSION OF MATTERS TO A VOTE OF  SECURITY HOLDERS                                  |   |
|       |                                                                                  |   |
| PART II    |                                                                                  |   |
|       |                                                                                  |   |
| ITEM 5.    | MARKET FOR COMMON EQUITY AND  RELATED STOCKHOLDER MATTERS.                            |   |
|       |                                                                                  |   |
| ITEM 6.    | MANAGEMENT DISCUSSION AND ANALYSIS  AND PLAN OF OPERATIONS                            |   |
|       |                                                                                  |   |
| ITEM 7.    | FINANCIAL STATEMENTS                                                                  |   |
|       |                                                                                  |   |
| ITEM 8.    | CHANGES IN AND DISAGREEMENTS WITH  ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |   |
|       |                                                                                  |   |
| ITEM 8A.   | CONTROLS AND PROCEDURES                                                               |   |
|       |                                                                                  |   |
| PART III   |                                                                                  |   |
|       |                                                                                  |   |
| ITEM 9.    | DIRECTORS AND EXECUTIVE OFFICERS  OF THE REGISTRANT                                   |   |
|       |                                                                                  |   |
| ITEM 10.   | EXECUTIVE COMPENSATION                                                                |   |
|       |                                                                                  |   |
| ITEM 11.   | SECURITY OWNERSHIP OF CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT                       |   |
|       |                                                                                  |   |
| ITEM 12.   | CERTAIN RELATIONSHIPS AND  RELATED TRANSACTIONS                                       |   |
|       |                                                                                  |   |
| ITEM 13.   | EXHIBITS AND REPORTS ON FORM 8-K                                                      |   |
|       |                                                                                  |   |
| ITEM 14.   | PRINCIPAL ACCOUNTANT FEES AND  SERVICES                                               |   |
|       |                                                                                  |   |
| SIGNATURES |                                                                                  |

 

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### **PART I**

 

Certain statements in this Annual Report on Form 10-KSB, or the Report,are “forward-looking statements.” These forward-looking statements include, butare not limited to, statements about the plans, objectives, expectations andintentions of Jasmine’s Garden, a Nevada corporation (referred to in thisReport as “we,” “us”, “our” or “registrant”), and other statements contained inthis Report that are not historical facts. Forward-looking statements in this Report or hereafter included in otherpublicly available documents filed with the Securities and Exchange Commission,reports to our stockholders and other publicly available statements issued orreleased by us involve known and unknown risks, uncertainties and other factorswhich could cause our actual results, performance (financial or operating) orachievements to differ from the future results, performance (financial oroperating) or achievements expressed or implied by such forward-lookingstatements. Such future results are based upon management’s best estimatesbased upon current conditions and the most recent results of operations.  When used in this Report, the words“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” andsimilar expressions are generally intended to identify forward-lookingstatements, because these forward-looking statements involve risks anduncertainties. There are important factors that could cause actual results todiffer materially from those expressed or implied by these forward-lookingstatements, including our plans, objectives, expectations and intentions andother factors discussed under “Risk Factors.”

 

**ITEM1.      DESCRIPTION OF BUSINESS**

 

##### *History*

 

We were incorporated March 27, 2001, in the state of Nevada and, untilDecember 2, 2003, had operated a nationwide wholesale and retail business ofselling greeting cards, note cards and gift tags made from a design processinvolving photography and computer graphics. On December 2, 2003, Cheering Limited, an investment holding companyorganized under the laws of the British Virgin Islands, acquired 5,700,000shares of our Common Stock, par value $0.001, or the Common Stock, from Jackand Jasmine Gregory, our former officers, directors and principal stockholders,which constituted approximately 95% of our then issued and outstanding stock,for cash consideration of $221,220.74. The purchase price for the Common Stock was paid in cash from CheeringLimited’s working capital.  As a resultof the acquisition and change in control, we abandoned our business plan ofselling greeting cards, note cards and gift tags and are holding ourselvesavailable for an extraordinary corporate transaction, such as a merger, sale orreorganization.

 

In connection with Cheering’s acquisition of the securities: (i) theBoard of Directors appointed Zuzhuan Xu to serve as the President and adirector and Dr. Kit Tsui, Yao Miao and Mei Bin Jin, all designees of CheeringLimited, to serve as our directors and officers; and (ii) Jack and Jasmine Gregoryresigned from their positions as officers and directors of the Company.  On February 18, 2004, Zu Zhuan Xu resignedfrom his position as the President of Jasmine’s Garden and Yi Bo Sun wasappointed to replace him and Xu Bao Dong was appointed to serve as adirector.  On February 19, 2004, Dr. Kitresigned from his position as a director and Yi Bo Sun was appointed to replacehim.  Currently, our board of directorsconsists of Yi Bo Sun, who is also our Chief Executive Officer, Zu Zhuang Xuand Xu Bao Dong.

 

On March 17, 2004, we completed a private offering of 30,000,000 sharesof our restricted Common Stock at a per share purchase price of $0.05 to sevenunaffiliated individuals, which resulted in a change of control.  We received gross proceeds of $1,500,000from this private placement.  Theconsideration was derived from each investor’s personal funds.  On March 17, 2004, the average of the bidand ask price of our Common Stock was $2.15 per share, however, our CommonStock was not actively traded prior to March 29, 2004.

 

As a condition of and in connection with such private placement, eachof the investors executed an irrevocable proxy granting Yi Bo Sun, our ChiefExecutive Officer and our director, the right to vote all shares of the CommonStock purchased by the investors in this transaction.  The irrevocable proxies expire May 1, 2004.

 

Yi Bo Sun is also the Chairman and Chief Executive Officer of CheeringLimited, an investment holding company that, as of December 2, 2003, reportedthat it beneficially owned 5,700,000 shares (approximately 11.88%) of theissued and outstanding Common Stock of the Company. Prior to the expiration ofthe irrevocable proxies, Yi

 

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Bo Sun will have the power tovote or direct the voting of 35,700,000 shares (approximately 74.41%) of ourCommon Stock.

 

##### *Currently*

 

We are currently a “shell” corporation that seeks to identify andcomplete a merger or acquisition with a private entity whose business presentsan opportunity for our stockholders. Our management will review and evaluatebusiness ventures for possible mergers or acquisitions. Currently, we areexploring opportunities to engage in such extraordinary corporate transactionsbut are not a party to any agreement, nor do we have any commitment orunderstanding to enter into or become engaged in a transaction, as of the dateof this filing. Further, the business objectives discussed herein are extremelygeneral and are not intended to restrict the discretion of our management.

 

A decision to participate in a specific business opportunity will bemade based upon our analysis of the quality of the prospective businessopportunity’s management and personnel, asset base, the anticipatedacceptability of business’ products or marketing concepts, the merit of abusiness plan, and numerous other factors which are difficult, if notimpossible, to analyze using any objective criteria.

 

##### *Selectionof a Business*

 

We believe that potential business opportunities will be referred fromvarious sources, including our former and current officers and directors,professional advisors, securities broker-dealers, venture capitalists, personsinvolved in the financial community, and others who may present unsolicitedproposals. We will not engage in any general solicitation or advertising for abusiness opportunity, and will rely on the personal contacts of our managementteam, as well as indirect associations with other business and professionalpeople.  Our reliance on “word of mouth”may limit the number of potential business opportunities identified. While itis not presently anticipated that we will engage unaffiliated professionalfirms specializing in business acquisitions or reorganizations, such firms maybe retained if management deems it in our best interest. Finder’s fees paid toprofessional acquisition firms could involve one-time cash payments, paymentsbased on a percentage of the business opportunity’s revenues or product salesvolume, payments involving issuance of securities (including those of theCompany), or any combination of these or other compensation arrangements.Consequently, we are unable to predict the cost of utilizing such services. Asof the filing date there have been no discussions, agreements or understandingswith any professional advisors, financial consultants, broker-dealers orventure capitalists. Our present intention is to rely upon the contacts of ourformer and current officers and directors.

 

While we will not restrict our search to any particular business,industry, or geographical location, we initially intend to target businessesthat are engaged in the production and manufacture of equipment in thetelecommunications industry and located in the People’s Republic of China.Management reserves the right to evaluate and enter into any type of businessin any location. In seeking a business venture, the decision of management willnot be controlled by an attempt to take advantage of any anticipated orperceived appeal of a specific industry, management group, product, orindustry, but will be based on the business objective of seeking long-termcapital appreciation. We may participate in a newly organized business ventureor in a more established business. Participation in a new business ventureentails greater risks since, in many instances, management of such a venturemay not have a proven track record; the eventual market for such venture’sproduct or services will likely not be established; and the profitability ofthe venture will be untested and impossible to accurately forecast. Should weparticipate in a more established venture that is experiencing financialdifficulty, risks may stem from our inability to generate sufficient funds tomanage or reverse the circumstances causing such financial problems.

 

The analysis of new businesses willbe undertaken by or under the supervision of our management team. In analyzingprospective businesses, we will consider, to the extent applicable, theavailable technical, financial and managerial resources of any given businessventure. Management will also consider the nature of present and expectedcompetition; potential advances in research and development or exploration; thepotential for growth and expansion; the likelihood of sustaining a profitwithin given time frames; the perceived public recognition or acceptance ofproducts, services, trade or service marks; name identification; and otherrelevant factors. We anticipate that the results of operations of a specificbusiness venture may not necessarily be indicative of the potential for futureearnings, which may be impacted by a change in marketing strategies, businessexpansion, modifying product emphasis, changing or substantially augmentingmanagement, and other factors.

 

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We will analyze all relevant factorsand make a determination based on a composite of available information, withoutreliance on any single factor. The period within which we will decide toparticipate in a given business venture cannot be predicted and will depend oncertain factors, including the time involved in identifying businesses, thetime required for us to complete our analysis of such businesses, the timerequired to prepare appropriate documentation to effect a merger or acquisition,and other circumstances.

 

##### *Acquisitionof a Business*

 

The implementation of a structure that will effect any given businesstransaction may cause us to become a party to a merger, consolidation, purchaseand sale of assets, purchase or sale of stock, or other reorganizationinvolving another corporation, joint venture, partnership or licensee. Theexact structure of the anticipated business transaction cannot yet bedetermined.  Notwithstanding the above,we do not intend to participate in a business through the purchase of minoritystock positions. In other words, we do not intend to merely buy noncontrollinginterests in other businesses. Rather, our current focus is to acquire acontrolling interest in a business. Upon the completion of a transaction, it islikely that our present management will no longer control our affairs. Further,a majority or all of our present directors may, as part of the terms of aprospective business transaction, resign and be replaced by new directorswithout a vote of our stockholders.

 

In connection with the merger or acquisition of a business venture, ourpresent stockholders, including Cheering Limited, may, as a negotiated part ofthe transaction, sell a portion or all of our Common Stock held by them at asignificant premium over their original investment in us. If our currentstockholders sell their stock as part of a merger/acquisition, they may decideto sell a controlling interest (i.e., over 50%) of the Company to the otherentity (including such other entity’s stockholders and affiliates) whichparticipates in the merger/acquisition. The other entity might only buy sharesfrom Cheering Limited, and/or another major stockholder, or it might only buyenough shares to obtain a controlling interest in the Company. However, thereis no degree of certainty that the other entity will buy any of our shares,whether from Cheering Limited or any other stockholder. Conversely, it ispossible the other entity may offer to buy out all or most of the stockholders’stock at prices comparable to those offered to Cheering Limited or anothermajor stockholder. It is possible that the entity may pay a higher price forshares belonging to insider stockholders than for shares belonging tonon-insider stockholders. Although our insiders have no present intentions tobuy shares from other insiders, it is a possibility that insiders could buyshares from other insiders. Management does not intend to actively negotiatefor or otherwise require the purchase of all or any portion of its stock as acondition to or in connection with any proposed merger or acquisition. Althoughour present stockholders did not acquire their shares of Common Stock with aview toward any subsequent sale, it is not unusual for affiliates of the entityparticipating in the reorganization to negotiate to purchase shares held by thepresent stockholders. This is done in order to reduce the amount of shares heldby persons no longer affiliated with us and thereby reduce the potentialadverse impact on the public market in our Common Stock that could result fromsubstantial sales of such shares after the business reorganization. Publicinvestors will not receive any portion of the premium that may be paid in theforegoing circumstances. Furthermore, our stockholders may not be afforded anopportunity to approve or consent to any particular stock buy-out transaction.

 

In the event sales of shares by our present stockholders are anegotiated part of a future merger or acquisition, a conflict of interest mayarise since Yi Bo Sun, our Chief Executive Officer and a director and the ChiefExecutive Officer and Chairman of the Board of Cheering Limited, may benegotiating for the merger or acquisition on our behalf and for the sale ofshares held by Cheering Limited.

 

Although the terms of any registration rights and the number ofsecurities, if any, which may be registered, cannot be determined at this time,it may be expected that any registration of securities by us would entailsubstantial expense to us.

 

The issuance of substantial additional securities and their potentialsale into any trading market which may develop in our securities may have adepressive effect on such market.

 

The manner in which we participate in a business will depend on thenature of the business, the respective needs and desires of us and otherparties, the management of the business and the relative negotiating strengthof us and such other management.

 

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We will participate in a businessonly after the negotiation and execution of appropriate written agreements.Although the terms of such agreements cannot be determined at this time,generally such agreements will require specific representations and warrantiesby all of the parties thereto, will specify certain events of default, willdetail the terms of closing and the conditions which must be satisfied by eachof the parties prior to such closing, will outline the manner of bearing costsif the transaction is not closed, will set forth remedies on default, and willinclude miscellaneous other terms.

 

During the fiscal year ended December 31, 2003, we examined certaincandidates located in the People’s Republic of China and conducted preliminarydiscussions regarding the terms and conditions for an agreement. We have notreached any definitive agreements with any specific candidate and we intend tocontinue our search for potential merger/acquisition candidates during thecurrent year.

 

##### *Operationof Business After Acquisition*

 

Our operation following its merger or acquisition of a business will bedependent on the nature of the business and the interest acquired. We areunable to determine at this time whether we will be in control of the businessor whether present management will control us following the acquisition. It maybe expected that the business will present various risks, which cannot bepredicted at the present time.

 

##### *GovernmentRegulation*

 

It is impossible to anticipate government regulations, if any, to whichwe may be subject until we have acquired an interest in a business. The use ofassets to conduct a business which we may acquire could subject us toenvironmental, public health and safety, land use, trade, or other governmentalregulations and state or local taxation. In selecting a business in which toacquire an interest, management will endeavor to ascertain, to the extent ofour limited resources, the effects of such government regulation on ourprospective business. In certain circumstances, however, such as theacquisition of an interest in a new or start-up business activity, it may notbe possible to predict with any degree of accuracy the impact of governmentregulation. The inability to ascertain the effect of government regulation on aprospective business activity will make the acquisition of an interest in suchbusiness a higher risk.

 

##### *Competition*

 

We will be involved in intense competition with other businessentities, many of which will have a competitive edge over us by virtue of theirstronger financial resources and prior experience in business. There is noassurance that we will be successful in obtaining suitable businessopportunities.

 

##### *Employees*

 

As of April 5, 2004, we had ten (10) employees, of which nine (9) arefull time and one (1) is part time, including five (5) executives and four (4)administrative personnel.  From time totime, we also retained the services of approximately 19 consultants on apart-time basis in connection with furthering our new business plan.   We expect to use consultants, attorneys, andaccountants as necessary, and does not anticipate a need to engage anyadditional full-time employees so long as it is identifying and evaluatingbusinesses. The need for employees and their availability will be addressed inconnection with a decision whether or not to acquire or participate in aspecific business venture.

 

We do not have key-man life insurance for any of our employees.  Our employees are not represented by a laborunion and are not covered by a collective bargaining agreement. We believe thatour employee relations are good.

 

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RISK FACTORS

 

THIS REPORT MAY BE DEEMED TO CONTAIN FORWARD-LOOKING STATEMENTS.  FORWARD-LOOKING STATEMENTS IN THIS REPORT ORHEREAFTER INCLUDED IN OTHER PUBLICLY AVAILABLE DOCUMENTS FILED WITH THECOMMISSION, REPORTS TO THE OUR STOCKHOLDERS AND OTHER PUBLICLY AVAILABLESTATEMENTS ISSUED OR RELEASED BY US INVOLVE KNOWN AND UNKNOWN RISKS,UNCERTAINTIES AND OTHER FACTORS WHICH COULD CAUSE OUR ACTUAL RESULTS, PERFORMANCE(FINANCIAL OR OPERATING) OR ACHIEVEMENTS TO DIFFER FROM THE FUTURE RESULTS,PERFORMANCE (FINANCIAL OR OPERATING) OR ACHIEVEMENTS EXPRESSED OR IMPLIED BYSUCH FORWARD-LOOKING STATEMENTS. SUCH FUTURE RESULTS ARE BASED UPONMANAGEMENT’S BEST ESTIMATES BASED UPON CURRENT CONDITIONS AND THE MOST RECENTRESULTS OF OPERATIONS. THESE RISKS INCLUDE, BUT ARE NOT LIMITED TO, RISKS SETFORTH HEREIN, EACH OF WHICH COULD ADVERSELY AFFECT OUR BUSINESS AND THEACCURACY OF THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.

 

THERE IS A LIMITED PUBLIC MARKET FOR OUR COMMON STOCK.  PERSONS WHO MAY OWN OR INTEND TO PURCHASESHARES OF COMMON STOCK IN ANY MARKET WHERE THE COMMON STOCK MAY TRADE SHOULDCONSIDER THE FOLLOWING RISK FACTORS, TOGETHER WITH OTHER INFORMATION CONTAINED ELSEWHERE IN OUR REPORTS,PROXY STATEMENTS AND OTHER AVAILABLE PUBLIC INFORMATION, AS FILED WITH THESECURITIES AND EXCHANGE COMMISSION, PRIOR TO PURCHASING SHARES OF THE COMMONSTOCK:

 

###### FINANCIALRISKS

 

*We Have Recently Adopted A New Business Plan.  There Is No Assurance That We Will Be Successful In Implementing Our Business Plan. *We have abandoned our current business plan and have adopted a new business plan to hold ourselves available for an extraordinary corporate transaction such as a merger or acquisition with an unidentified company or entity.  In connection therewith, we have appointed new directors and officers to further our new business plan.  As a result, our financial statements may materially change in the future as we implement our new plan or strategic focus and historical financial statements will not be accurate indicators of our prospective performance.  Prior to the new plan, we were engaged in the business of nationwide wholesale and retail sales of greeting cards, note cards and gift tags made from a design process involving photography and computer graphics.  We have a limited operating history and are considered a development stage enterprise because we have not generated significant revenues from the sale of our products.   We have nominal assets with which to create operating capital. We have an accumulated deficit of $5,179 at December 31, 2003.  These factors raise substantial doubt about our ability to continue as a going concern if we do not implement our new business plan.  There can be no assurance, however, that we will be successful in implementing our new business plan or that we will able to generate revenues sufficient to continue as a going concern under our new business plan.

 

*We Lack Profitability And Suffer From Cash Flow Difficulties. We*generated a net profit of $782 during the fiscal year ended December 31, 2003. As of December 31, 2003, we had an accumulated deficit of approximately $5,179. We anticipate generating revenues from the operations of the new business to be acquired.  Prior to such acquisition, we intend to rely on financing from external sources in order to sustain us on an on-going basis.  There can be no assurances that we will be able to acquire a profitable business or obtain such an additional financing in the future on terms acceptable to us or at all. Unless we establish or acquire profitable operations, we may need to obtain a working line of credit and/or an external financing to satisfy cash flow needs in the future.  The failure to obtain such a line of credit or such a financing may have an adverse effect on our ability to finance costs of operations and to meet its current obligations.

 

*We Will Need, But May Not Be Able To ObtainAdditional Financing On Reasonable Terms Or At All*. ** **Sinceinception, we have had minimal revenues and minimal profits.  We have financed our operations primarilythrough the sale of our Common Stock and with income derived from operations.****We recently raised $1,500,000 from aprivate placement of 30,000,000 shares of our Common Stock.  We do not intend to devote the proceeds ofsuch offering to further our existing business, but intend to apply them toimplementing our new business plan.  Webelieve that the proceeds of such offering, together with other available funds,will be sufficient to meet our anticipated needs for the new business plan andfor working capital and capital expenditures for at least the next 13

 

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months.  Thereafter, we will need to raise additionalfunds.  We may need to raise additionalfunds sooner in order to accelerate the implementation of our new businessplan, to develop new or enhanced services or products, to respond tocompetitive pressures or to acquire complementary products, businesses ortechnologies.  We may also need to raisefunds if our available funds decrease. If additional funds are raised through the issuance of equity orconvertible debt securities, the percentage ownership of our stockholders willbe reduced and stockholders may experience additional and substantialdilution.  Moreover, such securities mayhave rights, preferences and privileges senior to those of our CommonStock.  There can be no assurance thatadditional financing will be available on terms favorable to us or at all.  If adequate funds are not available or arenot available on acceptable terms, we may not be able to fund our expansion,take advantage of unanticipated acquisition opportunities, develop or enhanceproducts or respond to competitive pressures. Thus, we may be adversely impacted if the full proceeds are not raisedand investors may lose their entire investment. Such inability could have amaterial adverse effect on our business, results of operations and financialcondition.

 

*There Is No Assurance That We Will Be Able ToConsummate An Extraordinary Corporate Transaction And Achieve Profitability.*  Our former greetcard business was not asignficant source of revenue.  Ourcurrent business plan is to identify businesses to acquire. There can be noassurance that we will be able to acquire a business or that any such businesswill be profitable after acquisition. If we fail to acquire a profitable business or operate such business ina manner to generate significant revenue, our results of operation andfinancial condition may be materially and adversely affected.  We may be required to rely on outsidefinancing to sustain our on-going operations.

 

*We Have Broad Management Discretion Over The Allocation Of Proceeds From Our $1,500,000 Offering.*  We recently consummated an offering of 30,000,000 shares of our Common Stock for gross proceeds of approximately $1,500,000. Our management retains broad discretion as to the allocation of the proceeds of this offering.  The failure of management to apply such funds effectively could have a material adverse effect on our business, results of operations and financial condition.

 

SECURITIES RISKS

 

*There Is A Limited Public Market For CommonStock.* There is currently a limited public market forthe Common Stock. Holders of our Common Stock may, therefore, have difficultyselling their Common Stock, should they decide to do so. In addition, there canbe no assurances that such markets will continue or that any shares of CommonStock, which may be purchased may be sold without incurring a loss. Any suchmarket price of the Common Stock may not necessarily bear any relationship toour book value, assets, past operating results, financial condition or anyother established criteria of value, and may not be indicative of the marketprice for the Common Stock in the future. Further, the market price for theCommon Stock may be volatile depending on a number of factors, includingbusiness performance, industry dynamics, news announcements or changes ingeneral economic conditions.

 

*Our Common Stock May Be Deemed Penny StockWith A Limited Trading Market*.  Our Common Stock is currently listed fortrading in the Over-The-Counter Market on the NASD Electronic Bulletin Board orin the “pink sheets” maintained by the National Quotation Bureau, Inc., whichare generally considered to be less efficient markets than markets such asNASDAQ or other national exchanges, and which may cause difficulty inconducting trades and difficulty in obtaining future financing. Further, oursecurities are subject to the “penny stock rules” adopted pursuant to Section15 (g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).The penny stock rules apply to non-NASDAQ companies whose Common Stock tradesat less than $5.00 per share or which have tangible net worth of less than$5,000,000 ($2,000,000 if the company has been operating for three or moreyears). Such rules require, among other things, that brokers who trade “pennystock” to persons other than “established customers” complete certaindocumentation, make suitability inquiries of investors and provide investorswith certain information concerning trading in the security, including a riskdisclosure document and quote information under certain circumstances. Manybrokers have decided not to trade “penny stock” because of the requirements ofthe penny stock rules and, as a result, the number of broker-dealers willing toact as market makers in such securities is limited. In the event that we remainsubject to the “penny stock rules” for any significant period, there maydevelop an adverse impact on the market, if any, for our securities. Becauseour securities are subject to the “penny stock rules,” investors will find itmore difficult to dispose of our securities. Further, for companies whosesecurities are traded in the Over-The-Counter Market, it is more difficult: (i)to obtain accurate quotations,

 

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(ii) to obtain coverage forsignificant news events because major wire services, such as the Dow Jones NewsService, generally do not publish press releases about such companies, and(iii) to obtain needed capital.

 

*Our Chief Executive Officer and a director**Has Voting Control Of The Company*.Yi Bo Sun, our Chief Executive Officer and a director, is also the ChiefExecutive Officer and Chairman of the Board of Cheering Limited.  As such, Yi Bo Sun may be entitled to directthe vote of the 5,700,000 shares of Common Stock (or approximately 11.88% ofour issued and outstandiung Common Stock) owned by Cheering Limited.  Yi Bo Sun is also entitled to direct thevote of an additional 30,000,000 shares of Common Stock, for a total of35,700,000 shares (approximately 74.41% of our issued and outstanding CommonStock) pursuant to certain irrevocable proxies granted to him in connectionwith the private placement of such securities to certain individuals.  These proxies expire May 1, 2004.  As a result, Yi Bo Sun will be in a positionto exercise significant control with respect to our affairs and the election ofdirectors.

 

*A Group of Seven Investors Beneficially Own62.53% of Our Common Stock*.  We recently completed a private offering of 30,000,000 shares ofCommon Stock to seven individuals.  As aresult of such offering, such investors as a group will beneficially ownapproximately 62.53% of the issued and outstanding shares of Common Stock.  While the investors have granted Yi Bo Sunan irrevocable proxy to direct the voting of their shares of Common Stock,these proxies expire May 1, 2004.  Uponthe expiration of these proxies (and assuming that such proxies are notextended), the investors as a group will be able to exercise control over anymatters requiring the vote of stockholders, including the approval of anybusiness acquisition and the election of directors.  This could delay or prevent a change in control of our board ofdirectors.  This may have the effect ofprecluding or delaying the opportunity of minority stockholders to sell theirCommon Stock to interested purchasers or may significantly reduce the offeringprice in any such transaction.

 

*Shares Eligible ForFuture Sale; Issuance Of Additional Shares.* Future sales ofshares of our Common Stock and our stockholders could adversely affect theprevailing market price of the Common Stock. There are currently a minimum of11,960,000 shares of Common Stock, which are free trading shares or areeligible to have the restrictive legend removed pursuant to Rule 144(k)promulgated under the Securities Act. Sales of substantial amounts of Common Stock in the public market, orthe perception that such sales may occur, could have a material adverse effecton the market price of our Common Stock. Pursuant to our Articles ofIncorporation, we have the authority to issue additional shares of Common Stockand preferred stock which may be converted into Common Stock. The issuance ofsuch shares could result in the dilution of the voting power of the currentlyissued and outstanding Common Stock.

 

*Number OfAuthorized Shares Of Common Stock Available For Future Issuance; PossibleDilutive And Anti-Takeover Effects.* We are currently authorized by our Articles of Incorporation to issue50,000,000 shares of Common Stock, of which 47,975,400 are issued andoutstanding.  Our board of directors andstockholders have approved of an amendment to our Articles of Incorporation toincrease the number of authorized shares of Common Stock from 50,000,000 to140,000,000 and create a class of preferred stock consisting of 60,000,000shares.  Upon the amendment of theArticles of Incorporation, the Board of Directors will have the power to issuesubstantial amounts of additional Common Stock and Preferred Stock with suchdesignation, rights and preferences as may be determined from time to time bythe Board of Directors without stockholder approval.  We may issue a substantial number of additional securities inconnection with future financing or acquisitions.  To the extent that additional shares of Common Stock or PreferredStock are issued, dilution of the interests of all of our stockholders willoccur.  In addition, the issuance ofPreferred Stock and Common Stock could be utilized, under certaincircumstances, as a method of discouraging, delaying or preventing a change incontrol of the Company.  We currentlyare not committed to issue any shares of Common or Preferred Stock.

 

*We Do Not Intend To Pay Dividends On OurCommon Stock.* We have not paid any dividends on ourCommon Stock to date and there are no plans for paying dividends on the CommonStock in the foreseeable future. We intend to retain earnings, if any, toprovide funds for the implementation of our new business plan.  We do not intend to declare or pay anydividends in the foreseeable future. Therefore, there can be no assurance that holders of Common Stock willreceive any additional cash, stock or other dividends on their shares of CommonStock until we have funds which the Board of Directors determines can beallocated to dividends.

 

9

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OTHER RISKS

 

*Nevada Law and Our Articles of IncorporationImpose Limitations on the Liability of Our Directors to the Stockholders.*  Our Articles of Incorporation provide, aspermitted by governing Nevada law, that our directors shall not be personallyliable to our stockholders for monetary damages for breach of fiduciary duty asa director, with certain exceptions. Our bylaws require us to provide mandatory indemnification of directorsto the fullest extent permitted by Nevada law, except for matters arising underthe securities laws of the United States. Further, we may elect to adopt forms of indemnification agreements tocover directors and officers.  Theseprovisions and agreements may discourage stockholders from bringing suitagainst a director for breach of fiduciary duty and may reduce the likelihoodof derivative litigation brought by stockholders on our behalf against adirector.

 

**ITEM2.      DESCRIPTION OF PROPERTY**

 

On December 17, 2003, we leased from ShenZhen Gao Yi ElectricTechnology Ltd. Company certain office space located at 2/F North WondialBuilding, Keji South 6 Road, Shenzhen High-Tech Industrial Park, Shennan Ave,Shenzhen,China, which serves our principal executive offices. Our monthly rentis RMB6000 and our lease expires December 16, 2005.

 

**ITEM3****.      LEGALPROCEEDINGS**

 

We are not currently a party to any pending legal proceeding.

 

**ITEM4****.      SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS**

 

During the quarter ended December 31, 2003, no matters were submittedto a vote of our security holders.

 

On March 4, 2004, certain of our principal stockholders holding9,442,700 shares of Common Stock, representing approximately 52.53% of the thentotal issued and outstanding Common Stock, approved by written consent to adopta resolution to amend our Articles of Incorporation to increase the number ofshares of Common Stock authorized to be issued from 50,000,000 to 140,000,000and to establish a class of preferred stock consisting of 60,000,000 shares,par value $0.001.  Such resolutions werepreviously approved by our Board on February 24, 2004.  Given our new business plan of holdingourselves available for an extraordinary corporate transaction such as a mergeror reorganization, the Board deemed it to be in our best interest to increase ourcapitalization to enable us to engage in activities necessary to implement ournew business plan, including without limitation, raising capital.

 

On April 6, 2004, we filed an Information Statement on Schedule 14Cdisclosing such shareholder and board approvals.  The adoption of the foregoing resolutions will become effective20 calendar days after the mailing of the Information Statement to ourshareholders of record as of March 26, 2004. Immediately upon the expiration of such 20-day period, we intend to filea Certificate of Amendment with the Nevada Secretary of State to amend ourArticles of Incorporation in accordance with the resolutions adopted by ourshareholders and directors.

 

### **PART II**

 

**ITEM5****.      MARKETFOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.**

 

As of April 5, 2004, the authorized capital stock of the Companyconsisted of 50,000,000 shares of Common Stock, par value $0.001 per share (the“Common Stock”) and we had 47,975,400 shares of Common Stock issued andoutstanding.  Our transfer agent isAtlas Stock Transfer Company, 5899 S. State Street, Salt Lake City, Utah,84107.

 

Our Common Stock is listed for trading in the Over-The-Counter Marketand is quoted on the NASD’s Electronic Bulletin Board or in the “pink sheets”maintained by the National Quotation Bureau, Inc. under the symbol “JASG.”  During the years ended December 31, 2003 and2002, there was a limited market for our common stock.  As a result, our stock has no or nominaltrading volume and a very limited trading history.  During the calendar years ended December 31, 2003 and 2002, theaverage of our bid and asked prices for our Common stock

 

10

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was $1.50 per share, based uponquotations between dealers, without adjustments for stock splits, dividends,retail mark-ups, mark-downs or commissions, and therefore, may not representactual transactions.

 

Our stock began trading during the first quarter of the calendar yearended December 31, 2004.  The followingtable sets forth the high and low closing sale prices of our common stock forthe periods indicated below:

 
|                             |   | **HIGH** |   | **LOW** |   |
|----------------------------------|--------|----------|--------|---------|--------|
| YEAR ENDED DECEMBER 31, 2004 (1) |   |     |   |    |   |
| First Quarter                    |   | $        | 4.00   |    | $      | 0.40 |   |
|                                  |        |          |        |         |        |  |  |

 

On April 5, 2004, the closing market price for our Common Stock wasapproximately $1.10 per share. As of April 5, 2004, we had 140 stockholders ofrecord, without giving effect to determining the number of stockholders whohold shares in “street name” or other nominee accounts.

 

EQUITY COMPENSATION PLAN INFORMATION

 

The following is a summary of all of our equity compensation plans,including individual arrangements that provide for the issuance of equitysecurities as compensation, as of December 31, 2003. See Note 6 to thefinancial statements for additional discussion.

 
| **Plan Category**                                           |   | **Number of  securities to be  issued upon exercise  of outstanding options,  warrants and rights** |   | **Weighted  average exercise  price of outstanding  options, warrants and  rights** |   | **Number of  securities  remaining available for  future issuance under  equity compensation plan  (excluding securities  reflected in column (a))** |   |
|-------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                        |   | **(a)**                                                                                             |   | **(b)**                                                                             |   | **(c)**                                                                                                                                              |   |
| Equity Compensation Plans Not Approved By  Security Holders |   | 12,000,000                                                                                          | (1)(2) | N/A                                                                                 |   | 40,000                                                                                                                                               | (2)    |

 

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(1) Pursuant to the terms of the Jasmine’s Garden 2004 Equity IncentivePlan, we are authorized to grant options (both incentive stock options andnon-qualified stock options), restricted stock and stock awards to eligibleparticipants.  The terms of the 2004Equity Incentive Plan is more fully described in Item 10  (Executive Compensation) under the sectionentitled “Equity Incentive Plan.”

(2) Effective March 2, 2004, 11,960,000 shares of Common Stock wereissued to 19 of our consultants for services rendered or to be rendered.

 

DIVIDEND POLICY

 

We have notdeclared or paid any dividend since inception on our Common Stock. We do notanticipate that any dividends will be declared or paid in the future on ourCommon Stock.

 

RECENT ISSUANCES OF UNREGISTERED SECURITIES

 

*Private Offering of 30,000,000 Shares ofRestricted Common Stock*

 

On March 17, 2004, we completed a private offering of 30,000,000 sharesof our restricted Common Stock at a per share purchase price of $0.05 to sevenunaffiliated individuals, resulting in gross proceeds to us of $1,500,000.  The consideration was derived from eachinvestor’s personal funds.  On March 17,2004, the average of the bid and ask price of our Common Stock was $2.15 pershare, however, our Common Stock was not actively traded prior to March 29,2004. We did not pay any commission or other costs in connection with thisoffering.  We intend to use the proceedsof this offering to implement our new business plan.  We believe that the issuance of securities was made solely to nonU.S. Persons in transactions exempt from registration pursuant to Regulation Sof the Securities Act of 1933, as amended.

 

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As a result of the sale, the following individuals became beneficialowners of 5% or more of our issued and outstanding shares of Common Stock:

 
| **Title of Class** |   | **Name of  Beneficial Owner** |   | **Amount of  beneficial  ownership** |   | **Percent of  class** |   |
|--------------------|--------|-------------------------------|--------|--------------------------------------|--------|-----------------------|--------|
| Common Stock       |   | Xiong Xin Gan                 |   | 7,200,000                            |   | 15.01                 | %      |
| Common Stock       |   | Ruan Ju Xiang                 |   | 6,000,000                            |   | 12.51                 | %      |
| Common Stock       |   | Fan Xi                        |   | 5,400,000                            |   | 11.26                 | %      |
| Common Stock       |   | Xu Zhu Zhuan                  |   | 3,750,000                            |   | 7.82                  | %      |
| Common Stock       |   | Xu Zu Hong                    |   | 4,500,000                            |   | 9.38                  | %      |

 

This private placement resulted in a change of control.  As a condition of and in connection withsuch private placement, each of the investors executed an irrevocable proxygranting Yi Bo Sun, our Chief Executive Officer and our director, the right tovote all shares of the Common Stock purchased by the investors in thistransaction.  The irrevocable proxiesexpire May 1, 2004.

 

Yi Bo Sun is also the Chairman andChief Executive Officer of Cheering Limited, an investment holding companythat, as of December 2, 2003, reported that it beneficially owned 5,700,000shares (approximately 11.88%) of the issued and outstanding Common Stock of theCompany. Prior to the expiration of the irrevocable proxies, Yi Bo Sun willhave the power to vote or direct the voting of 35,700,000 shares (approximately74.41%) of our Common Stock.

 

##### *Issuanceof 12,000,000 Shares Of Common Stock Registered On Form S-8*

 

On March 2, 2004, we filed a registration statement on Form S-8covering 12,000,000 shares of Common Stock issuable under our 2004 EquityIncentive Plan.  Effective March 2,2004, 11,960,000 shares of freely tradable Common Stock were issued toapproximately 19 consultants in consideration for market research servicesrendered to us.

 

##### *OtherIssuance Of Securities*

 

On March 27, 2001, Kenneth G. Eade was issued 300,000 shares ofrestricted Common Stock, valued at $300, in consideration for legal servicesrendered.  The securities were issued inreliance upon an exemption pursuant to Section 4(2) of the Securities Act.

 

In connection with our organization, on March 27, 2001, Jasmine Gregorywas issued 3,000,000 shares of restricted Common Stock, valued at $3000, andJack Gregory was issued 2,700,000 restricted shares of Common Stock, valued at$2650 in exchange for services and assets contributed to us.  The securities were issued in reliance uponan exemption pursuant to Section 4(2) of the Securities Act.  Cheering Limited acquired these securitiesfrom Jack and Jasmine Gregory in December 2, 2003 for cash consideration of$221,220.74.

 

CERTAIN BUSINESS COMBINATIONS AND OTHER PROVISIONS OF THE CERTIFICATEOF INCORPORATION

 

Our Articles of Incorporation limits the liability of our directors tous or our stockholders for monetary damages for breach of fiduciary duty as adirector. However, the Nevada Revised Statutes prohibit the elimination orlimitation of liability for certain actions including any breach of adirector’s duty of loyalty to us or our stockholders, for acts or omissions notin good faith or which involve intentional misconduct, fraud or a knowingviolation of law under Section 78.300 of the Nevada Revised Statutes and forcertain unlawful distributions.

 

Our bylaws require us to indemnify our directors for any and all actsduring their capacity as directors to the fullest extent of the law, except formatters arising under the securities laws of the United States.

 

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Section 78.7502 of the Nevada RevisedStatutes provides that we may indemnify any person who was or is a party, or isthreatened to be made a party, to any threatened, pending or completed action,suit or proceeding brought by reason of the fact that he is or was ourdirector, officer, employee or agent, or is or was serving at our request as adirector, officer, employee or agent of another company or other entity. Theexpenses that are subject to this indemnity include attorneys’ fees, judgments,fines and amounts paid in settlement actually and reasonably incurred by theindemnified party in connection with the action, suit or proceeding. In orderfor us to provide this statutory indemnity, the indemnified party must not beliable under Nevada Revised Statutes section 78.138 or must have acted in goodfaith and in a manner he reasonably believed to be in, or not opposed to, ourbest interests. With respect to a criminal action or proceeding, theindemnified party must have had no reasonable cause to believe his conduct wasunlawful.

 

Section 78.7502 also provides that wemay indemnify any person who was or is a party, or is threatened to be made aparty, to any threatened, pending or completed action or suit brought by or onour behalf by reason of the fact that he is or was our director, officer,employee or agent or is or was serving at our request as a director, officer,employee or agent of another company or other entity against expenses(including amounts paid in settlement and attorneys’ fees) actually orreasonably incurred by him in connection with the defense or settlement of suchaction or suit if he is not liable under Nevada Revised Statutes section 78.138of if he acted in good faith and in a manner he reasonably believed to be in ornot opposed to our best interests.  Wemay not indemnify a person if the person has been adjudged by a court ofcompetent jurisdiction to be liable to us, unless and only to the extent thatthe court in which such action or suit was brought or another court ofcompetent jurisdiction determines upon application that in view of all thecircumstances of the case, the person is fairly and reasonably entitled toindemnity.

 

Section 78.7502 requires us toindemnify present and former directors or officers against expenses if he hasbeen successful on the merits or otherwise in defense of any action, suit orproceeding, or in defense of any claim, issue or matter.

 

**ITEM6****.      MANAGEMENTDISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS**

 

The following discussion and analysis should be read in conjunctionwith the Financial Statements and related notes included elsewhere in thisReport.

 

##### *Plan ofOperation*

 

Since inception and until the acquisition of a controlling interest inus by Cheering Limited on December 2, 2003, we were engaged in the nationwidewholesale and retail business of selling greeting cards, note cards and gifttags made from a design process involving photography and computergraphics.  On December 2, 2003, CheeringLimited, an investment holding company organized under the laws of the BritishVirgin Islands, acquired 5,700,000 shares of our Common Stock from Jack andJasmine Gregory, our former officers, directors and principal stockholders,which constituted approximately 95% of our then issued and outstanding stock,for cash consideration of $221,220.74. As a result of the acquisition and change in control: (i) we abandonedour business of selling greeting cards, note cards and gift tags and areholding ourselves available for an extraordinary corporate transaction, such asa merger, sale or reorganization; and (ii) Jack and Jasmine Gregory resignedfrom their positions as our officers and directors and appointed designees ofCheering Limited to serve as our officers and directors.  We do not plan to limit our options to anyparticular industry, but will evaluate each opportunity on its merits.  We believe that the proceeds of our recentoffering, together with other available funds, will be sufficient to meet ouranticipated needs for the new business plan and for working capital and capitalexpenditures for at least the next 13 months. Thereafter, we will need to raise additional funds.

 

##### *Resultsof OperationsFor the Years Ended December 31, 2002 and 2003.*

 

Sales

 

Revenues for the year ended December 31, 2003 were $ 808 versus $4,661in revenues for the year ended December 31, 2002, a decrease of 82.66%.  Sales in 2002 consisted of products relatedto our prior business. For the year ended December 31, 2003, we discontinuedour then existing operations and do not expect to generate any revenue unlessor until a merger, acquisition or other extraordinary corporate transactiontakes place.

 

13

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Income / Loss

 

Net income for the year ended December 31, 2003 was $782 as compared toa net income of $2,392 in the comparable period in 2002.

 

As expected, we experienced a decrease in net income due to ourabandonment of our prior business plan in calendar year 2003. We believe thatour net income will continue to decrease and we may incur losses until anextraordinary corporate transaction takes place.  There can be no assurance that we will achieve or maintainprofitability or that any revenue growth will take place in the future even ifwe do engage in an extraordinary corporate transaction.

 

Expenses

 

Selling, general and administrativeexpenses for the year ended December 31, 2003 were $ 6,607 versus $2,839 in thecomparable period in 2002. The increases in expenses during the year endedDecember 31, 2003 were attributed to the inclusion of audit fees in the amountof $5,000 and other miscellaneous expenses in forwarding our new business plan.

 

On March 1, 2004, the Board approved the adoption of our 2004 EquityIncentive Plan which authorizes the issuance of up to 12,000,000 shares ofCommon Stock to certain employees and consultants.   On March 2, 2004, we filed a registration statement on Form S-8covering the securities issuable under the plan.  Effective March 2, 2004, 11,960,000 shares of Common Stock wereissued to approximately 19 consultants for market research servivces renderedto us.

 

Cost of Sales

 

Cost of sales for the period ended December 31, 2003 was $579 versus$1,312 in the comparable period in 2002. The decrease in the cost of sales wasdue to our abandonment of our prior business.

 

Impact of Inflation

 

We believe that inflation has had a negligible effect on operationsduring the period. We believe that inflation will continue to have a negligibleeffect until we consummate an acquisition of a favorable business opportunity.

 

Trends, Events, and Uncertainties

 

Demand for our products (after the acquisition of a favorable businessopportunity) will be dependent on, among other things, market acceptance ourconcept and general economic conditions, which are cyclical in nature. If, afteran extraordinary transaction, a major portion of our activities is the receiptof revenues from the sales of its products, our business operations may beadversely affected by our competitors and prolonged recessionary periods.

 

##### *Liquidityand Capital Resources*

 

For the Years Ended December 31, 2002 and 2003.

 

Cash flows provided in operations were $818 for the year ended December31, 2003 versus $2,463 in the comparable period in 2002. The decrease in cashflows from operating activities was primarily attributable to the abandonmentof our prior business plan.

 

We have funded our cash needs from inception through December 31, 2003and to the date of this Report through a series of equity transactions. Forexample, on March 17, 2004, we consummated a private offering of 30,000,000shares for gross proceeds of $1,500,000. We may need additional capital to fund operations over the next 13months. A lack of revenues throughout fiscal 2003 have significantly affectedour cash position and fiscal 2004 is expected to continue with a lack ofrevenue.  We expect to remain in aposition where the raising of additional funds through equity, debt financing,merger or acquisition will be necessary.

 

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On a long-term basis, liquidity is dependent on establishingoperations, receipt of revenues, additional infusions of capital and debtfinancing. If necessary, we may raise capital through a stock offering. Thefunds raised from this offering will be used to develop and execute our newbusiness plan. However, there can be no assurance that we will be able toobtain additional equity or debt financing in the future, if at all. If we areunable to raise additional capital, our growth potential will be adverselyaffected. Additionally, we will have to significantly modify our plans.

 

*CriticalAccounting Policies*

 

The discussion and analysis of ourfinancial condition and results of operations in this Report are based upon ourfinancial statements, which have been prepared in accordance with generallyaccepted accounting principles in the United States. The preparation offinancial statements requires management to make estimates and judgments thataffect the reported amounts of assets and liabilities, revenues and expense anddisclosures at the date of the financial statements. On an on-going basis, weevaluate our estimates, including, but not limited to, those related to revenuerecognition, accounts receivables, inventories, impairment of property andequipment and of intangibles. We use authoritative pronouncements, historicalexperience and other assumptions as the basis for making estimates. Actualresults could differ from those estimates.

 

Management does not believe that ithas relied on any critical accounting policies which would have a materialeffect on our financial statements.

 

**ITEM7****.      FINANCIALSTATEMENTS**

 

The following discussion and analysis should be read in conjunctionwith the financial statements and related notes included elsewhere in thisReport.  Such information isincorporated herein by reference.

 

**ITEM 8****.      CHANGES IN ANDDISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**

 

In our Form 8-k filed with the Commission on April 5, 2004, wedisclosed that on March 31, 2004, Rogelio G. Castro CPA, Independent Auditor(“Castro”) resigned as our principal independent accountant.  Mr. Castro’s reports on our financialstatements for the years ended December 31, 2002 and 2001 did not contain anadverse opinion or disclaimer of opinion, nor were they qualified or modifiedas to uncertainty, audit scope, or accounting principles. However, the auditreport for the year ended December 31, 2002 included an emphasis pertaining tomatters, which raise substantial doubt about our ability to continue as a goingconcern.

 

During our two most recent fiscal years and through the date ofCastro’s resignation, there were no disagreements with Castro on any matters ofaccounting principles or practices, financial statement disclosure, or auditingscope or procedure which, if not resolved to Castro’s satisfaction, would havecaused Castro to make reference to the subject matter in connection with itsreport of the financial statements for such years or interim periods throughMarch 31, 2004; and there were no reportable events as defined in Item304(a)(1)(iv)(B) of Regulation S-B.

 

On March 31, 2004, we retained Moores Rowland Mazars as our principalaccountant.

 

**ITEM8A****.      CONTROLSAND PROCEDURES**

 

We carried out an evaluation, under the supervision and with theparticipation of our management, including our Chief Executive Officer andChief Financial Officer, of the effectiveness of the design and operation ofour disclosure controls and procedures as of the end of the period covered bythis report. The evaluation was undertaken in consultation with our accountingpersonnel. Based on that evaluation, the Chief Executive Officer and the ChiefFinancial Officer concluded that our disclosure controls and procedures arecurrently effective to ensure that information required to be disclosed by usin the reports that it files or submits under the Securities Exchange Act of1934 is recorded, processed, summarized and reported within the time periodsspecified in the Securities and Exchange Commission’s rules and forms.

 

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We made no significant changes in ourinternal controls or in other factors that could significantly affect thesecontrols subsequent to the date of the evaluation of those controls by theChief Executive and Chief Financial officers. We have also undertaken to periodically review our disclosure controlsand procedures and internal controls for adequacy and effectiveness.

 

### **PART III**

 

**ITEM9****.      DIRECTORSAND EXECUTIVE OFFICERS OF THE REGISTRANT**

 

The followingtable sets forth certain information regarding our directors and executiveofficers.

 
| **Name**    |   | **Age** |   | **Position**                            |
|-------------|--------|---------|--------|-----------------------------------------|
| Yi Bo Sun   |   | 27      |   | Chief  Executive Officer and a director |
| Yao Miao    |   | 31      |   | Chief  Financial Officer                |
| Mei Jin Bin |   | 25      |   | Secretary                               |
| Xu Bao Dong |   | 32      |   | Director                                |
| Zu Zhuan Xu |   | 35      |   | Director                                |

 

There are no family relationships among the officers and directors.

 

The directors named above will serve until the next annual meeting ofour stockholders and until his successor shall have been elected and qualified.  Absent an employment agreement, officershold their positions at the pleasure of the Board of Directors.

 

During the past five years, no current director or executive officer ofthe Company:

 

(1) was a general partner or executive officer of any business whichfiled any bankruptcy petition or against which any bankruptcy petition wasfiled, either at the time of the bankruptcy or two years prior to that time;

 

(2) was convicted in a criminal proceeding or named subject to apending criminal proceeding (excluding traffic violations and other minoroffenses);

 

(3) was subject to any order, judgment or decree, not subsequentlyreversed, suspended or vacated, of any court of competent jurisdiction,permanently or temporarily enjoining, barring, suspending or otherwise limiting

his involvement in any type of business, securities or bankingactivities; or

 

(4) was found by a court of competentjurisdiction (in a civil action), the Securities and Exchange Commission or theCommodity Futures Trading Commission to have violated a federal or statesecurities or commodities law, and the judgment has not been reversed,suspended or vacated.

 

AUDIT COMMITTEE FINANCIAL EXPERT

 

We haveundergone a significant change in management since the acquisition of 5,700,000shares of Common Stock by Cheering Limited. We have recently completed our search for principal executive officersand intend to begin an active search for individuals who will qualify to serveon our audit committee and as an audit committee financial expert.  Currently, Xu Bao Dong and Zu Zhuan Xu serveon our audit committee.

 

COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT

 

Section 16(a) of the Securities Exchange Act requires our directors,executive officers and persons who own more than 10% of our Common Stock tofile reports of ownership and changes in ownership of our Common Stock with theSecurities and Exchange Commission. Directors, executive officers and personswho own more than 10% of our Common Stock are required by Securities andExchange Commission regulations to furnish to us copies of all Section 16(a)forms they file.

 

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To ourknowledge, based solely upon review of the copies of such reports received orwritten representations from the reporting persons, we believe that during our2003 fiscal year our directors, executive officers and persons who own morethan 10% of our Common Stock complied with all Section 16(a) filingrequirements, except as set forth below:

 

Forms 3 and a Form 5 required to be filed pursuant to Section 16(a) ofthe Securities Exchange Act were filed on March 25, 2004, by the followingpersons for events occurring on the date set forth next to their names:

 
| **Name**     |   | **Form** |   | **Date of Event** |
|--------------|--------|----------|--------|-------------------|
| Yi Bo Sun    |   | Form 3   |   | February 19, 2004 |
| Xu Bao Dong  |   | Form 3   |   | February 18, 2004 |
| Mei Bin Jin  |   | Form 3   |   | December 2, 2003  |
| Yao Miao     |   | Form 3   |   | December 2, 2003  |
| Zu Zhuan Xu  |   | Form 3   |   | December 2, 2003  |
| Dr. Kit Tsui |   | Form 3   |   | December 2, 2003  |
| Dr. Kit Tsui |   | Form 5   |   | December 31, 2003 |

 

CODE OF ETHICS

 

We have recently adopted a Code of Ethics that applies to our principalexecutive officer, principal financial officer, principal accounting officer orcontroller or persons performing similar functions. A copy of the Code ofEthics is attached as an exhibit to this annual report. A copy of the Code ofEthics will be made available to any stockholder, free of charge, upon writtenrequest to us.

 

**ITEM10****.      EXECUTIVECOMPENSATION**

 

REMUNERATION OF OFFICERS AND DIRECTORS

 

During the past three fiscal years we did not pay cash compensation toour Chief Executive Officer or to any officer. Accordingly, no table relatingto executive compensation has been included in this Annual Report.

 

OPTION/SAR GRANTED DURING THE LAST FISCAL YEAR

 

We did not have a stock option or stock appreciation rights plan during2003. Therefore this section is not applicable.

 

LONG TERM INCENTIVE PLANS/AWARDS IN LAST FISCAL YEAR

 

We do not have long-term incentive plans and consequently has made nosuch awards.  Therefore this section isnot applicable.

 

EQUITY INCENTIVE PLAN

 

On March 1,2004, our Board of Directors adopted the Jasmine’s Garden 2004 Equity IncentivePlan, or the Plan. The Plan is intended to provide incentives to attract,retain and motivate our eligible employees and directors, as well asconsultants, advisors and independent contractors who provide valuable servicesto us, or Participant.  On March 2,2004, we filed a registration statement on Form S-8 covering the securitiesissuable under the Plan.

 

*Shares available Under the 2004 EquityIncentive Plan. *Themaximum number of shares that are reserved and available under the 2004 EquityIncentive Plan for award is 12,000,000 shares of Common Stock.  Effective March 2, 2004, 11,960,000 sharesof freely tradable shares were issude to approximately 19 employees andconsultants for services rendered or to be rendered to us.  None of the shares were issued inconsideration for promoting or marketing making services or the offer or saleof our securities for capital raising purposes.

 

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*Eligibility and Administration*.  The Board or a committee of the Board isauthorized to grant options (Incentive Stock Options and Nonqualified StockOptions), restricted Common Stock and stock awards under the Plan.  Incentive Stock Options may be granted onlyto our employees or employees of our parent company or any of oursubsidiaries.  All other awards(options, restricted Common Stock and stock awards) may be granted to ouremployees, officers, directors, consultants, independent contractors andadvisors or any parent of subsidiary of the Company.  The Plan will be administered by the Board or by a committee ofthe Board.   The term “Board” as used inthis section refers to our Board of Directors or if our Board has delegated itsauthority, the Committee.  The Board hasthe power, among other things, to make awards, determine the number of sharescovered by each award and other terms and conditions of such awards, interpretthe Plan, and adopt rules, regulations and procedures with respect to theadministration of the Plan.

 

*Stock Options*.  The Board may grant stock options thateither qualify as  “incentive stockoptions” under the Code or are “non-qualified stock options” in such form andupon such terms as the Board may approve from time to time.  Stock options granted under the Plan may beexercised during their respective terms as determined by the Board.  The purchase price may be paid by tenderingcash or, in the Board’s discretion, by tendering promissory notes or previouslyacquired Common Stock.  The optionee mayelect to pay all or part of the option exercise price by contracting with abroker for the broker to advance the exercise price and then to sell sufficientshares after the date of issue to satisfy the exercise price advanced by thebroker, and by having us withhold upon exercise of the option a number ofshares with a fair market value equal to the minimum income tax withholding, ifany, upon the exercise of the option. The Participant may not transfer or assign any awards of stock andrestricted stock granted under this Plan other than by will or by the laws ofdescent and distribution. The Participant may not transfer or assign any optionawards granted under this Plan other than by will or by the laws of descent anddistribution, by instrument to an inter vivos or testamentary trust in whichthe options are to be passed to beneficiaries upon the death of the trustor, orby gift to “immediate family” as that term is defined in 17 C.F.R.240.16a-1(e). During the lifetime of the Participant an award will beexercisable only by the Participant.

 

Stock options may be exercised during varying periods of time after aParticipant’s termination of employment, dependent upon the reason for thetermination.  If the Participant’sservice is terminated for any reason except death or disability, then theParticipant may exercise such Participant’s options only to the extent thatsuch Options would have been exercisable upon the termination date no laterthan three (3) months after the termination date (or such longer time periodnot exceeding five (5) years as may be determined by the Committee).  If the Participant’s service is terminatedbecause of the Participant’s death or disability (or the Participant dieswithin three (3) months after a termination other than for cause or because ofParticipant’s disability), then the Participant’s options may be exercised onlyto the extent that such options would have been exercisable by the Participanton the termination date and must be exercised by the Participant (or theParticipant’s legal representative) no later than twelve (12) months after thetermination date (or such longer time period not exceeding five (5) years asmay be determined by the Committee, with any such exercise beyond (i) three (3)months after the termination date when the Termination is for any reason otherthan the Participant’s death or disability, or (ii) twelve (12) months afterthe termination date when the termination is for Participant’s death ordisability).

 

The term of an incentive stock option may not exceed 10 years (or 5years if issued to a Participant who owns or is deemed to own more than 10% ofthe combined voting power of all classes of our stock).  The aggregate fair market value of theCommon Stock with respect to which an incentive stock option is exercisable forthe first time by an optionee during any calendar year shall not exceed$100,000 (based on the exercise price at the time of grant).  The exercise price under an incentive stockoption may not be less than 100% of the fair market value of the stock (common)on the date the option is granted (or, in the event the Participant owns morethan 10% of the combined voting power of all classes of our stock, the optionprice shall be not less than 110% of the fair market value of the stock on thedate the option is granted).  Theexercise price for non-qualified options granted under the Plan may not be lessthan 85% of the fair market value of the stock on the date of grant.

 

*Restricted Stock*.  The Board may grant restricted stock awardsthat result in shares of stock being issued to a Participant subject torestrictions against disposition during a restricted period established by theBoard.  The Board may condition thegrant of restricted stock upon the attainment of specified performance goals orservice requirements.  The provisions ofrestricted stock awards need not be the same with respect to each recipient.  The purchase price of restricted stock soldwill be determined by the Committee and may not be less than 85% of the fairmarket value of the securities on the grant date, except in the case of a saleto a ten percent stockholder, in which

 

18

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case the purchase price will be100% of the fair market value.  Duringthe period of the restrictions, a Participant has the right to vote the sharesof restricted stock and to receive dividends. If shares are issued as dividends, they will be subject to the same restrictionsas the restricted stock.

 

**If a Participant terminates employment during the period ofthe restrictions or prior to the end of the performance period, all sharesstill subject to restrictions or performance goals will be forfeited andreturned to us subject to the right of the Board to waive such restrictions inthe event of a Participant’s death, total disability, retirement or under othercircumstances in which the Board determines that the waiver would be in ourbest interests.**

 

*Deferred Stock.*  The Board may grant deferred stock toparticipants, which represents the right to receive shares at a predetermineddate in the future. The Board may condition the receipt of deferred stock uponthe achievement of specific performance goals or service requirements. Deferredshares are not considered to be outstanding during the deferral period, andtherefore no dividends are paid with respect to such shares nor is theParticipant entitled to vote or exercise any other rights as a stockholder withrespect to such shares.

** **

**In the event of (a) our dissolution or liquidation, (b) amerger or consolidation in which we are not the surviving corporation (otherthan a merger or consolidation with a wholly-owned subsidiary, ourreincorporation in a different jurisdiction, or other transaction in whichthere is no substantial change in our stockholders or their relative stockholdings and the awards granted under this Plan are assumed, converted orreplaced by the successor corporation, which assumption will be binding on allParticipants), (c) a merger in which we are the surviving corporation but afterwhich our stockholders immediately prior to such merger (other than anystockholder that merges, or which owns or controls another corporation thatmerges, with us in such merger) cease to own their shares or other equityinterest in us, (d) the sale of substantially all of our assets, or (e) theacquisition, sale, or transfer of more than 50% of our outstanding shares bytender offer or similar transaction, any or all outstanding awards may beassumed, converted or replaced by the successor corporation (if any), whichassumption, conversion or replacement will be binding on all Participants. Inthe alternative, the successor corporation may substitute equivalent awards orprovide substantially similar consideration to Participants as was provided tostockholders (after taking into account the existing provisions of the awards).The successor corporation may also issue, in place of outstanding shares of theCompany held by the Participant, substantially similar shares or other propertysubject to repurchase restrictions no less favorable to the Participant. In theevent such successor corporation (if any) refuses to assume or substituteawards, as provided above, such awards will expire on such transaction at suchtime and on such conditions as the Committee will determine. Notwithstandinganything in this Plan to the contrary, the Committee may provide that thevesting of any or all awards granted pursuant to this Plan will accelerate upona transaction described above. If the Committee exercises such discretion withrespect to options, such options will become exercisable in full prior to theconsummation of such event at such time and on such conditions as the Committeedetermines, and if such options are not exercised prior to the consummation ofthe corporate transaction, they shall terminate at such time as determined bythe Committee.**

 

DIRECTORS’ COMPENSATION

 

The current members of the Board of Directors are generally not paidfor their services as a director. Directors are reimbursed for certain approvedexpenses incurred in connection with Company business and for certain approvedexpenses incurred in connection with attendance at non-telephonic Boardmeetings and non-telephonic committee meetings.

 

**ITEM11****.      SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

 

The following table sets forth, as of April 5, 2004, informationregarding the beneficial ownership of our Common Stock with respect to each of ourexecutive officers, each of our directors, each person known by us to ownbeneficially more than 5% of the Common Stock, and all of our directors andexecutive officers as a group. The term “executive officer” is defined as theChief Executive Officer, the President and the Chief Financial Officer. Eachindividual or entity named has sole investment and voting power with respect toshares of Common Stock indicated as beneficially owned by them, subject tocommunity property laws, where applicable, except where otherwise noted.

 

19

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| **Name and Address Of Beneficial Owner (1)**              |   | **Number of  Shares Beneficially  Owned (2)** |   | **Percentage  of Shares  Beneficially Owned (2)** |   |
|-----------------------------------------------------------|--------|-----------------------------------------------|--------|---------------------------------------------------|--------|
| Cheering Limited                                          |   | 5,700,000                                     |   | 11.88                                             | %      |
| Yi Bo Sun (3)(4)                                          |   | 35,700,000                                    |   | 74.41                                             | %      |
| Xiong Xin Gan (4)                                         |   | 7,200,000                                     |   | 15.01                                             | %      |
| Ruan Ju Xiang (4)                                         |   | 6,000,000                                     |   | 12.51                                             | %      |
| Fan Xi (4)                                                |   | 5,400,000                                     |   | 11.26                                             | %      |
| Xu Zhu Zhuan (4)                                          |   | 3,750,000                                     |   | 7.82                                              | %      |
| Xu Zu Hong (4)                                            |   | 4,500,000                                     |   | 9.38                                              | %      |
| All Officers, Directors and 5% Stockholders  (12 persons) |   | 35,700,000                                    |   | 74.41                                             | %      |

 

----

*              Less than 1%.

(1)           The address of thepersons named in this column is c/o Jasmine’s Garden, 2/F Wondial Building,Keji South 6 Road, Shenzhen High-Tech Industrial Park, Shennan Road, Shenzhen,China.

(2)           Shares of CommonStock subject to stock options and warrants that are currently exercisable orexercisable within 60 days or shares that otherwise may be acquired within 60days of this Report are deemed to be beneficially owned by the person holdingthe options and warrants or person with the right to acquire such shares forcomputing such person’s percentage, but are not treated as outstanding forcomputing the percentage of any other person.

(3)           Yi Bo Sun, ourPresident and director, is also the Chairman and Chief Executive Officer ofCheering Limited.  Cheering Limitedbeneficially owns 5,700,000 shares of our Common Stock.  As the Chief Executive Officer and Chairmanof the Board of Cheering Limited, Yi Bo Sun may be deemed to beneficially ownshares owned by Cheering Limited.  Inconnection with the private placement of 30,000,000 shares of Common Stock,each investor (collectively holding an aggregate of 30,000,000 shares) executedan Irrevocable Proxy granting Yi Bo Sun the right to vote all shares of CommonStock purchased by such investors in such placement.  The Irrevocable Proxies expire May 1, 2004.  As a result, Yi Bo Sun will be entitled tovote an aggregate of 35,700,000 shares (or approximately 74.41%) of our CommonStock until May 1, 2004.

(4)           Each person is astockholder who has executed an Irrevocable Proxy granting Yi Bo Sun the rightto to vote all shares of the Common Stock purchased by such person in theprivate placement of 30,000,000 shares of our Common Stock.  The Irrevocable Proxies expire May 1, 2004.

 

**ITEM12****.      CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS**

 

During calendar years 2002 and 2003, we were parties to an agreementwith Jack Greogry, our former President, whereby Mr. Gregory allowed us to usehis office space rent-free until we were able to show significant revenue.  This agreement terminated upon theconsummation of the purchase of 5,700,000 shares of Common Stock by CheeringLimited.

 

**ITEM13****.      EXHIBITSAND REPORTS ON FORM 8-K**

 

(a) Financial Statements (included in Part II of this Report):

 
| Report of Independent Certified Public Accountant Financial  Statements |   |
|-------------------------------------------------------------------------|--------|
| Balance Sheets                                                          |   |
| Statements of Operations                                                |   |
| Statements of Changes in Stockholder’s Equity                      |   |
| Statements of Cash Flows                                                |   |
| Notes to Financial Statements                                           |   |

 

(b) Reports on Form 8-K:

 

On February24,  2004,  we filed a Report on Form 8-K with respect to the resignation ofDr. Kit Tsui and the appointment of Yi Bo Sun to our Board of Directors.

 

20

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On March 22, 2004, we filed a Report on Form 8-K with respect to thechange in control in us that occurred as a result of the private placement of30,000,000 shares of Common Stock to certain investors.

 

On April 5, 2004, we filed a Report on Form 8-k disclosing theresignation of our prior principal accountant and our engagement of MooresRowland Mazars as our new principal accountant.

 

(c) Exhibits

 
| 3.1  |   | Articles of Incorporation (Exhibit 3.1 to Registration Statement on  Form SB-2/A, Amendment No. 8, filed with the Commission on March 22, 2002)                                  |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2  |   | Bylaws (Exhibit 3.4 to Registration Statement on Form SB-2/A,  Amendment No. 8, filed with the Commission on March 22, 2002)                                                     |
| 4.1  |   | Form of Stock Certificate (Exhibit 4.1 to Registration Statement on  Form SB-2/A, Amendment No. 8, filed with the Commission on March 22, 2002)                                  |
| 4.2  |   | 2004 Equity Incentive Plan (Exhibit 4.1 to Registration Statement on  Form S-8 filed with the Commission on March 2, 2004)                                                       |
| 4.3  |   | Form of Subscription Agreement dated March 17, 2004 by and among  Jasmine’s Garden and the Investors (Exhibit 4.1 to Form 8-K filed with the  Commission on March 22, 2004) |
| 4.4  |   | Form of Irrevocable Proxy dated March 17, 2004 executed by each  Investor (Exhibit 4.2 to Form 8-K filed with the Commission on March 22,  2004)                                 |
| 14.1 |   | Code of Ethics                                                                                                                                                                   |
| 16.1 |   | Letter Re: Change in Certifying Accountant (Exhibit 16.1 to Form 8-k  filed with the Commission on April 5, 2004)                                                                |
| 23.1 |   | Consent of Moores Rowland Mazars                                                                                                                                                 |
| 23.2 |   | Consent of Rogelio G. Castro, Certified Public Accountant                                                                                                                        |
| 31.1 |   | Certification of Chief Executive Officer pursuant to Section 302 of  the Sarbanes-Oxley Act of 2002                                                                              |
| 31.2 |   | Certification of Chief Financial Officer pursuant to Section 302 of  the Sarbanes-Oxley Act of 2002.                                                                             |
| 32.1 |   | Certification of Chief Executive Officer pursuant to Section 906 of  the Sarbanes-Oxley Act of 2002.                                                                             |
| 32.2 |   | Certification of Chief Financial  Officer pursuant to Section 906 of Sarbanes-Oxley Act.                                                                                         |
| 99.1 |   | Charter of the Audit Committee                                                                                                                                                   |

 

**ITEM14****.      PRINCIPALACCOUNTANT FEES AND SERVICES**

 

AUDIT FEE

 

The aggregate fees billed for each of the last two fiscal years forprofessional services rendered by the principal account for the audit of ourannual financial statement and review of financial statements included in our10-KSB reports and services normally provided by the accountant in connectionwith statutory and regulatory filings or engagements were $4,000 for fiscalyear ended 2002 and $5,000 for fiscal year ended 2003.

 

AUDIT-RELATED FEES

 

There were no aggregate fees billed in each of the last two fiscalyears for assurance and related services by the principal accountant that arereasonably related to the performance of the audit or review of our financialstatements that are not reported above for fiscal years ended 2003 and 2002.

 

TAX FEES

 

The aggregate fees billed in each of the last two fiscal years forprofessional services rendered by the principal accountant for tax compliance,tax advice, and tax planning were $500 for fiscal year ended 2002 and consistedof tax compliance services.  There wereno fees for tax compliance, tax advice or tax services for fiscal year ended2003.

 

21

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ALL OTHER FEES

 

There were no other aggregate fees billed in either of the last twofiscal years for products and services provided by the principal accountant,other than the services reported above.

 

Xu Bao Dong and Zu Zhuang Xu are members of our audit committee.  We are in the process of searching forindividuals qualified to serve as our Audit Committee financial expert and/or onthe audit committee generally.  Ourboard of directors will evaluate and approve in advance, the scope and cost ofthe engagement of an auditor before the auditor renders audit and non-auditservices.  We do not rely onpre-approval policies and procedures.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

We are a reporting company and file annual, quarterly and specialreports, proxy statements and other information with the Commission.  You may inspect and copy these materials atthe Public Reference Room maintained by the Commission at 450 Fifth Street,N.W., Washington, D.C. 20549.  Pleasecall the Commission at 1-800-SEC-0330 for more information on the PublicReference Room. You can also find our Commission filings at the Commission’swebsite at www.sec.gov.  We intend tofurnish our stockholders with annual reports containing audited financialstatements and such other periodic reports as we may determine to beappropriate or as may be required by law.

 

Certain documents listed above in Part III, Item 13 of this Report, asexhibits to this Report on Form 10-KSB, are incorporated by reference fromother documents previously filed by us.

 

22

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### **SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) of the SecuritiesAct of 1934, the registrant has duly caused this Report to be signed on itsbehalf by the undersigned, thereunto duly authorized.

 

 
|                      | JASMINE’S GARDEN                            |
|---------------------------|--------------------------------------------------|
|                      |                                             |
| Date:  April 9, 2004 | By:                                              | /s/ Yi Bo Sun |   |
|                      | Yi Bo Sun                                        |
|                      | President, Chief Executive Officer  and Director |
|                           |                                                  |  |  |  |

 

 

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

 
| **Signature** |            | **Capacity in Which Signed** |                               | **Date**      |   |
|---------------|-----------------|------------------------------|------------------------------------|---------------|--------|
|          |            |                         |
| By:           | /s/ Yi Bo Sun   |                         | President, Chief Executive Officer | April 9, 2004 |
| Yi Bo Sun     | and a director  |                         |
|          |            |                         |
| By:           | /s/ Yao Miao    |                         | Chief Financial Officer            | April 9, 2004 |
| Yao Miao      |            |                         |
|          |            |                         |
| By:           | /s/ Mei Bin Jin |                         | Secretary                          | April 9, 2004 |
| Mei Bin Jin   |            |                         |
|          |            |                         |
| By:           | /s/ Xu Bao Dong |                         | Director                           | April 9, 2004 |
| Xu Bao Dong   |            |                         |
|          |            |                         |
| By:           | /s/ Zu Zhuan Xu |                         | Director                           | April 9, 2004 |
| Zu Zhuan Xu   |            |                         |
|               |                 |                              |                                    |               |        |  |  |

 

23

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**Jasmine’s Garden**

**(A Development Stage Company)**

**FINANCIAL STATEMENTS**

 

December 31, 2003

 

 

CONTENTS

 
| Independent Auditors’ Report                             |   |
|---------------------------------------------------------------|--------|
| Balance  Sheets                                               |   |
| Statements of Operations                                      |   |
| Statements of Changes in Stockholders’  Equity (Deficit) |   |
| Statements of Cash Flows                                      |   |
| Notes to Financial Statements                                 |   |

 

----

 

**IndependentAuditors’ Report**

 

 

To the Board of Directors and Stockholders of

**Jasmine’s Garden**

**(A Development Stage Company)**

**Las Vegas, Nevada**

 

We have audited the accompanyingbalance sheet of Jasmine’s Garden  (adevelopment stage company) as of December 31, 2003 and the related statements of operations,stockholders’ equity and cash flows for the year then ended.  Thesefinancial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based onour audit. The financial statements of the Company as of and for the year ended December31, 2002 were audited by other auditors whose report dated February 21, 2003 onthose statements included an explanatory paragraph describing conditions thatraised substantial doubt about the Company’s ability to continue as a goingconcern.

 

We conducted our audit inaccordance with auditing standards generally accepted in the United States of America. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly,in all material respects, the financial position of Jasmine’s Garden as ofDecember 31, 2003 and the results of its operationsand its cash flows for the year thenended, in conformitywith accounting principles generally accepted in the United States of America.

 

The accompanying financialstatements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4, the Company is in the development stage and has limited assets, limited working capital, andhas sustained losses during its development stage which together raisesubstantial doubt about its ability to continue as a going concern. Managementplan regarding those matters are also described in the Note 4. The financial statements do not include any adjustments that mightresult from the outcome of this uncertainty.

 

 

# **Moores Rowland M**azars

*Chartered Accountants*

*Certified Public Accountants*

Hong Kong

 

Date: April 8, 2004

 

F-1

----

 

Independent Auditor’s Report

 

Board of Directors andStockholders

JASMINE’S GARDEN

Springville, California

 

I have audited the accompanyingbalance sheets of JASMINE’S GARDEN (a development stage company) as of December31, 2002 and 2001, and the related statements of operations, stockholders’deficit, and cash flows for the years then, and for the period March 27,2001(inception) through December 31, 2002. These financial statements are theresponsibility of the Company’s management. My responsibility is to express anopinion on these financial statements based on my audit.

 

I conducted my audit inaccordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that I plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.I believe that my audit provides a reasonable basis for my opinion.

 

In my opinion, the 2002financial statements referred to above present fairly, in all materialrespects, the financial position of JASMINE’S GARDEN as of December 31, 2002and 2001, and the results of its operations and its cash flows for the yearsthen ended and for the period March 27, 2001(inception) through December 31,2002 in conformity with accounting principles generally accepted in the UnitedStates of America.

 

The accompanying financial statementshave been prepared assuming that the Company will continue as going concern. Asdiscussed in Note 5, the Company is in development stage and has limitedassets, limited working capital, and has sustained losses during itsdevelopment stage which together raise substantial doubt about its ability tocontinue as a going concern.  Managementplans regarding those matters are also described in Note 5. The financialstatements do not include any adjustments that might result from the outcome ofthis uncertainty.

 
| Rogelio G.  Castro           |   |
|------------------------------|--------|
| Rogelio G.  Castro           |
| Certified  Public Accountant |
|                         |
| Oxnard,  California          |
| February 21,  2003           |

 

F-2

----

 

**Jasmine’s Garden**

**(A Development Stage Company)**

**BalanceSheets**

At December 31, 2003 and 2002

 
|                                                                                                        |   | **As of  December 31,** |       |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                                        |   | **2003**                |       | **2002** |   |
|                                                                                                        |   | **US$**                 |       | **US$** |   |
| **ASSETS**                                                                                                  |   |                    |       |   |   |
|                                                                                                        |   |                    | ** ** |   |   |
| **Current assets**                                                                                          |   |                    | ** ** |   |   |
| Cash                                                                                                        |   | **21,221**              | ** ** | 16,055 |   |
| Accounts Receivable                                                                                         |   | **—**              | ** ** | 252 |   |
| Total Current Assets                                                                                        |   | **21,221**              | ** ** | 16,307 |   |
|                                                                                                        |   |                    | ** ** |   |   |
| TOTAL ASSETS                                                                                                |   | **21,221**              | ** ** | 16,307 |   |
|                                                                                                        |   |                    | ** ** |   |   |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)**                                                     |   |                    | ** ** |   |   |
|                                                                                                        |   |                    | ** ** |   |   |
| **Current Liabilities**                                                                                     |   |                    | ** ** |   |   |
| Accrued Expenses                                                                                            |   | **5,000**               | ** ** | 868 |   |
| Total Current Liabilities                                                                                   |   |                    | ** ** |   |   |
|                                                                                                        |   |                    | ** ** |   |   |
| **Stockholders’s Equity**                                                                              |   |                    | ** ** |   |   |
| Common Stock, $0.001 par valueAuthorized Shares; 50,000,000Issued and Outstanding Shares;  6,015,400 shares |   | **6,015**               | ** ** | 6,015 |   |
| Paid-in Capital                                                                                             |   | **15,385**              | ** ** | 15,385 |   |
| Deficit Accumulated during the  Development Stage                                                           |   | **(5,179**              | **)**      | (5,961 | ) |
| Total Stockholders’ Equity                                                                             |   | **16,221**              | ** ** | 15,439 |   |
|                                                                                                        |   |                    | ** ** |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                             |   | **21,221**              | ** ** | 16,307 |   |

 

Theaccompanying notes are an integral part of these financial statements.

 

F-3

----

 

**Jasmine’sGarden**

**(ADevelopment Stage Company)**

**Statements of Operations**

Years / period ended December31, 2003, 2002 and 2001

 
|                                     |   | **For the  year / period ended December 31,** |       | **From  Inception  March 27,  2001 through  December 31,** |   |
|------------------------------------------|--------|-----------------------------------------------|------------|------------------------------------------------------------|--------|
|                                     |   | **2003**                                      |       | **2002**                                                   |   | **2001** |   | **2003** |   |
|                                     |   | **US$**                                       |       | **US$**                                                    |   | **US$** |   | **US$** |   |
|                                     |   |                                          |       |                                                       |   |   |   |   |   |
| Income                                   |   | **808**                                       | ** ** | 4,661                                                      |   | 2,778 |   | **8,247** | ** ** |
| Operating Expenses:                      |   |                                          | ** ** |                                                       |   |   |   |   | ** ** |
| Cost of Sales                            |   | **579**                                       | ** ** | 1,312                                                      |   | 1,143 |   | **3,034** | ** ** |
| General and administrative               |   | **6,028**                                     | ** ** | 1,527                                                      |   | 9,988 |   | **17,543** | ** ** |
|                                     |   |                                          | ** ** |                                                       |   |   |   |   | ** ** |
| Total Expenses                           |   | **6,607**                                     | ** ** | 2,839                                                      |   | 11,131 |   | **20,577** | ** ** |
|                                     |   |                                          | ** ** |                                                       |   |   |   |   | ** ** |
| Net Income   (Loss) from Operations |   | **(5,799**                                    | **)**      | 1,822                                                      |   | (8,353 | ) | **(12,330** | **)** |
| Other Income                             |   | **6,581**                                     | ** ** | 570                                                        |   | — |   | **7,151** | ** ** |
|                                     |   |                                          | ** ** |                                                       |   |   |   |   | ** ** |
| Net Income (Loss)                        |   | **782**                                       | ** ** | 2,392                                                      |   | (8,353 | ) | **(5,179** | **)** |
|                                     |   |                                          | ** ** |                                                       |   |   |   |   | ** ** |
| Basic Income (Loss) Per Share            |   | **—**                                    | ** ** | —                                                     |   | — |   |   | ** ** |

 

 

The accompanying notes are anintegral part of these financial statements.

 

F-4

----

 

**Jasmine’s Garden**

**(A Development Stage Company)**

**Statementsof Changes in Stockholders’ Equity (Deficit)**

Years / period ended December 31, 2003, 2002 and 2001

 
|                                   |   | **Number of  Shares  Outstanding** |       | **Common  Stock at  Par Value** |       | **Paid-in  Capital** |       | **Deficit  Accumulated  During  Development  Stage** |   | **Total**  |       |
|----------------------------------------|--------|------------------------------------|------------|---------------------------------|------------|----------------------|------------|------------------------------------------------------|--------|------------|------------|
|                                   |   |                               |       | **US$**                         |       | **US$**              |       | **US$**                                              |   | **US$**    |       |
|                                   |   |                               |       |                            |       |                 |       |                                                 |   |       |       |
| Stock issued at inception for services |   | 6,000,000                          |       | 6,000                           |       | —               |       | —                                               |   | 6,000      |       |
| Net loss, December 31, 2001            |   | —                             |       | —                          |       | —               |       | (8,353                                               | )      | (8,353     | )          |
|                                   |   |                               |       |                            |       |                 |       |                                                 |   |       |       |
| Balance, December 31, 2001             |   | 6,000,000                          |       | 6,000                           |       | —               |       | (8,353                                               | )      | (2,353     | )          |
|                                   |   |                               |       |                            |       |                 |       |                                                 |   |       |       |
| Stock issued for cash                  |   | 15,400                             |       | 15                              |       | 15,385               |       | —                                               |   | 15,400     |       |
| Net income, December 31, 2002          |   | —                             |       | —                          |       | —               |       | 2,392                                                |   | 2,392      |       |
|                                   |   |                               |       |                            |       |                 |       |                                                 |   |       |       |
| Balance, December 31, 2002             |   | 6,015,400                          |       | 6,015                           |       | 15,385               |       | (5,961                                               | )      | 15,439     |       |
|                                   |   |                               |       |                            |       |                 |       |                                                 |   |       |       |
| Net income, December 31, 2003          |   | —                             |       | —                          |       | —               |       | 782                                                  |   | 782        |       |
|                                   |   |                               |       |                            |       |                 |       |                                                 |   |       |       |
| **Balance, December 31, 2003**         |   | **6,015,400**                      | ** ** | **6,015**                       | ** ** | **15,385**           | ** ** | **(5,179**                                           | **)**  | **16,221** | ** ** |

 

 

The accompanying notes are an integral part of these financialstatements.

 

F-5

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**Jasmine’s Garden**

**(A Development Stage Company)**

**Statementsof Cash Flows**

Years / period ended December 31, 2003, 2002 and 2001

 

 
|                                                                               |   | **For the  year / period ended  December 31,** |       | **From  Inception  March 27, 2001  through  December 31,** |       |
|------------------------------------------------------------------------------------|--------|------------------------------------------------|------------|------------------------------------------------------------|------------|
|                                                                               |   | **2003**                                       |       | **2002**                                                   |       | **2001** |   | **2003** |   |
|                                                                               |   | **US$**                                        |       | **US$**                                                    |       | **US$** |   | **US$** |   |
|                                                                               |   |                                           |       |                                                       |       |   |   |   |   |
| **Cash Flows  From Operating Activities**                                          |   |                                           | ** ** |                                                       | ** ** |   | ** ** |   | ** ** |
| **Net Income (Loss)**                                                              |   | **782**                                        | ** ** | 2,392                                                      |       | (8,353 | ) | **(5,179** | **)** |
| Adjustments  to reconcile net income to net cash provided by operating activities: |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| Gain on  disposal of marketable securities                                         |   | **(4,348**                                     | **)**      | (224                                                       | )          | — |   | **(4,572** | **)** |
| Changes  in assets and liabilities:                                                |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| Stocks Issued for Services                                                         |   | **—**                                     | ** ** | —                                                     |       | 6,000 |   | **6,000** | ** ** |
| (Increase) Decrease in Accounts  Receivable                                        |   | **252**                                        | ** ** | (252                                                       | )          | — |   | **—** | ** ** |
| Increase in Accrued Expenses                                                       |   | **4,132**                                      | ** ** | 547                                                        |       | 321 |   | **5,000** | ** ** |
|                                                                               |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| **Net Cash Provided (Used) By Operating Activities**                               |   | **818**                                        | ** ** | 2,463                                                      |       | (2,032 | ) | **1,249** | ** ** |
|                                                                               |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| **Cash Flows From Investing Activities**                                           |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| Purchase  of marketable securities                                                 |   | **(6,808**                                     | **)**      | (1,638                                                     | )          | — |   | **(8,446** | **)** |
| Proceeds  on disposal of marketable securities                                     |   | **11,156**                                     | ** ** | 1,862                                                      |       | — |   | **13,018** | ** ** |
| **Net Cash From  Investing Activities**                                            |   | **4,348**                                      | ** ** | 224                                                        |       | — |   | **4,572** | ** ** |
|                                                                               |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| **Cash Flows From Financing Activities**                                           |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| Increase (Decrease) in                                                             |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| Notes Payable                                                                      |   | **—**                                     | ** ** | (3,009                                                     | )          | 3,009 |   | **—** | ** ** |
| Common Stocks Issued                                                               |   | **—**                                     | ** ** | 15,400                                                     |       | — |   | **15,400** | ** ** |
|                                                                               |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| **Net Cash From Financing Activities**                                             |   | **—**                                     | ** ** | 12,391                                                     |       | 3,009 |   | **15,400** | ** ** |
|                                                                               |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| **Increase in Cash**                                                               |   | **5,166**                                      | ** ** | 15,078                                                     |       | 977 |   | **21,221** | ** ** |
|                                                                               |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| **Beginning Cash**                                                                 |   | **16,055**                                     | ** ** | 977                                                        |       | — |   |   | ** ** |
|                                                                               |   |                                           | ** ** |                                                       |       |   |   |   | ** ** |
| **Ending Cash**                                                                    |   | **21,221**                                     | ** ** | 16,055                                                     |       | 977 |   |   | ** ** |

 

 

The accompanying notes are an integral part of these financialstatements.

 

F-6

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**Jasmine’s Garden**

**(A Development Stage Company)**

**Notesto Financial Statements**

Years / period ended December 31, 2003, 2002 and 2001

 

**1.****             NATUREOF BUSINESS**

 

Jasmine’s Garden (the “Company”) was incorporated under the laws of theState of Nevada on March 27, 2001. It has developed a business plan toestablish nationwide wholesale and retail sales of greeting cards, note cardsand gift tags made from a design process involving photography and computergraphics. The Company is considered a development stage enterprise because ithas not yet generated significant revenues from the sale of its products.

 

At December 2, 2003, Cheering Limited acquired 5,700,000 shares of commonstock of the Company which represented approximately 94.8% of all issued andoutstanding shares. Following the change of the Company’s control, the Companyabandoned the above-mentioned card business. Currently, the Company seeks to identify and complete merger oracquisition with private entities.

 

**2.****             SIGNIFICANTACCOUNT POLICIES**

 

**a.****     Basis**

The Companyuses the accrual method of accounting.

 

**b.****     Cash and cash equivalents**

The Companyconsiders all short term, highly liquid investments that are readily convertiblewithin three months to known amounts as cash equivalents. Currently, it has nocash equivalents.

 

**c.****     Revenue recognition**

Sales arerecorded the date the products are shipped to customers. The Company does notallow returns of products sold.

 

**d.****     Earnings (Loss) per share**

Net income(loss) per share is provided in accordance with Statement of FinancialAccounting Standards No. 128 “Earnings Per Share”. Basic income (loss) pershare reflects the amount of income (losses) for the period available to eachshare of common stock outstanding during the reporting period, while givingeffect to all dilutive potential common shares that were outstanding during theperiod, such a stock options and convertible securities. Diluted earnings per share shall be shown on stock optionsand other convertible issues that may be exercised within ten years of thefinancial statement dates. As of December 31, 2003, the Company had no potential common shares thatqualifiedas dilutive to be included in the earnings (loss) per share calculations.

 

Thefollowing is an illustration of the reconciliation of the numerators anddenominators of the basic income (loss) per share calculation:

 
|                                               |   | **For the years / period ended December 31,** |    |
|----------------------------------------------------|--------|-----------------------------------------------|---------|
|                                               |   | **2003**                                      |    | **2002** |   | **2001** |   |
|                                               |   |                                          |    |   |   |   |   |
| Net  Income (Loss)                                 |   | **$**                                         | **782** |   | $ | 2,392 |   | $ | (8,353 | ) |
| Weighted  average shares outstanding (denominator) |   | **6,015,400**                                 |    | 6,015,400 |   | 6,000,000 |   |
| Basic  income (loss) per share                     |   | **$**                                         | **0**   |   | $ | 0 |   | $ | 0 |   |

 

F-7

----

 

**e.****     Useof estimates**

The preparation of financial statements inconformity with accounting principles generally accepted requires management tomake estimates and assumptions that affect the reported amounts of assets andliabilities at the date of the financial statement and the reported amounts ofrevenues and expense during the reporting period. Actual results could differfrom those estimates.

 

**f.****     ****Related parties**

Parties are considered to be related if one party hasthe ability, directly or indirectly, to control the other party or exercisesignificant influence over the other party in making financial and operatingdecisions.  Parties are also consideredto be related if they are subject to common control or common significantinfluence.

 

**g.****    ****Accountingpronouncements**

Thereare no new accounting pronouncements for which adoption is expected to have amaterial effect on the Company’s financial statements.

 

**3.****             INCOME TAXES**

 

The Company has adopted the provision of SFASNo. 109 “Accounting for Income Taxes’. It requires recognition of deferred taxliabilities and assets for the expected future tax consequences. Under thismethod, deferred tax liabilities and assets are determined based on the differences between the financialstatement and tax basis of assets and liabilities using enacted tax rates ineffect for the year in which the differences are expected to reverse.

 

The Company’stotal deferred tax assets as of December 31, 2003 is as follows

 
|                             |   | **US$** |   |
|----------------------------------|--------|---------|--------|
| Net operating loss carry-forward |   | 5,179   |   |
| Valuation allowance              |   | (5,179  | )      |
|                             |   | —  |   |

 

##### **The difference between the incometax benefit in the accompanying statements of operations and the amount thatwould result if the Federal statutory rate of 34% were applied to pre-taxprofit is as follow for the year ended December 31, 2003:**

 
|                                 |   | **For the years / period ended December 31,** |       |
|--------------------------------------|--------|-----------------------------------------------|------------|
|                                 |   | **2003**                                      |       | **2002** |   | **2001** |   |
|                                 |   | **US$**                                       |       | **US$** |   | **US$** |   |
| Income tax expense at statutory rate |   | **266**                                       | ** ** | 894 |   | 2,840 |   |
| Valuation allowance                  |   | **(266**                                      | **)**      | (894 | ) | (2,840 | ) |
|                                 |   | **—**                                    |       | **—** | ** ** | — |   |

 

##### **The net operating loss carriedforward of $5,179 for federal tax purposes will expire in**the year 2023.

 

F-8

----

 

**4.****             GOING CONCERN**

 

The Companyhas nominal assets with which to create operating capital. It has anaccumulated deficit of $5,179 at December 31, 2003. These factors raisesubstantial doubt about the Company’s ability to continue as a going concern.

 

Subsequent to the balance sheet date, theCompany has increased its issued and outstanding capital as detailed in note 7to the financial statements. The management of the Company believes that theproceeds of the offering as mentioned in note 7 (c) to the financialstatements, together with other available funds, will be sufficient to meet theanticipated needs for the Company’s operations and, accordingly, the Company willremain a going concern in the foreseeable future.

 

**5.****             OTHERINCOME**

 

Other income totaled $6,581, consists of netshort term capital gains from capital transactions earned during 2003. Thesetransactions included a $2,233 gain from the sale of livestock and a $4,348gain from the sale of securities.

 

**6.****           ****OPERATING LEASE COMMITMENTS**

 

In late December 2003, the Companyleased office premises under non-cancelable operating leases. There was nocapital lease currently in effect.

 

The following table summarizes theapproximate future minimum rental payments under non-cancelable operatingleases in effect:

 
|                    |   | **As of  December 31, 2003** |       |
|-------------------------|--------|------------------------------|------------|
|                    |   | **US$**                      |       |
| Year ending December 31 |   |                         | ** ** |
|                    |   |                         | ** ** |
| 2004                    |   | **8,709**                    | ** ** |
| 2005                    |   | **8,346**                    | ** ** |
| 2006                    |   | **—**                   | ** ** |
| 2007                    |   | **—**                   | ** ** |
| 2008                    |   | **—**                   | ** ** |
| Thereafter              |   | **—**                   | ** ** |
|                    |   |                         | ** ** |
| Total                   |   | **17,055**                   | ** ** |

 

F-9

----

 

**7.****             SUBSEQUENTEVENTS**

 

a)     On March 1, 2004, theCompany announced a plan named “Jasmine’s Garden 2004 Equity Incentive Plan”(“Plan”) for providing incentives to attract, retain and motivate eligiblepersons whose presence and potential contributions are important to the successof the Company. 12,000,000 shares of common stock were allocated for the Plan.

 

11,960,000 shares wereissued on March 9, 2004 to a number of consultants who were engaged to providevarious consultancy services to the Company during the period from January 1,2004 to March 31, 2004 in relation to the Company’s proposed plan to identify and complete merger oracquisition with private entities.

 

b)    On March 4, 2004, certain of the Company’s principalstockholders holding 9,442,700 shares of common stock, representingapproximately 52.42% of the then total issued and outstanding common stock,approved by written consent to adopt a resolution to amend the Company’s Articlesof Incorporation to increase the number of shares of common stock authorized tobe issued from 50,000,000 to 140,000,000 and to establish a class of preferredstock consisting of 60,000,000 shares, par value $0.001.

 

c)     On March 17, 2004, theCompany completed a private offering of 30,000,000 shares of its common stockat a per share purchase price of $0.05 to seven unaffiliated individuals,resulting in gross proceeds to the Company of $1,500,000. The proceeds will beapplied to fund the Company’s proposed plan to identify and complete merger or acquisition withprivate entities.

 

F-10

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