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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-QSB  (Mark One)  S QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2006  £ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ______________ to _____________  Commission file number 000-50212  AIDA PHARMACEUTICALS, INC. (Exact name of small business issuer as specified in its charter)   Nevada81-0592184(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)  31 Dingjiang Road, Jianggan District, Hangzhou, China310016(Address of principal executive offices)(Zip Code)  Issuers telephone number  86-0571-85802712  __________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report)  Check whether the issues (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes S     No £  Indicate by check mark whether the registrant is a shell company (as defined in Rule 13b-2 of the Exchange Act). Yes £     No S  APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS  Check whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.  Yes £     No £  APPLICABLE ONLY TO CORPORATE ISSUES  State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date:  As of May 8, 2007, there were 27,000,000 shares of $.001 par value common stock issued and outstanding.  Transitional Small Business Disclosure Format (Check one):  Yes £    No S  SEC2334(9-05) Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.   FORM 10-QSB AIDA PHARMACEUTICALS, INC. INDEX  PagePART I.Financial Information3Item 1.  Unaudited Financial Statements

Condensed Consolidated Balance Sheets as of March 31, 2007 (Unaudited) and
December 31, 2006

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income
for the Three Months Ended March 31, 2007 and 2006 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2007 and 2006 (Unaudited)

Notes to Condensed Consolidated Financial Statements as of March 31, 2007
(Unaudited)

Item 2.  Managements Discussion and Analysis of Financial Condition or Plan of
Operation

Item 3.  Controls and Procedures4


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32PART II.Other Information

Item 1. Legal Proceedings

Item 2. Changes in Securities

Item 3. Defaults upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information

Item 6.  Exhibits and Reports on Form 8-K32

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33Signatures34  (Inapplicable items have been omitted)  2    PART I  FINANCIAL INFORMATION  Item 1. Financial Statements (Unaudited)  In the opinion of management, the accompanying unaudited condensed consolidated financial statements included in this Form 10-QSB reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented.  The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.  3    AIDA PHARMACEUTICAL, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS    ASSETSMarch 31, 2007
(Unaudited)December 31,
2006CURRENT ASSETSCash and cash equivalents$4,930,714$6,116,816Restricted cash2,002,3401,983,237Accounts receivable, net of allowance for doubtful accounts of $670,011 and $639,208 as of
March 31, 2007 and December 31, 2006, respectively9,442,79913,777,571Notes receivable, net of discount of $53,267 and $70,717 as of March 31, 2007 and
December 31, 2006, respectively6,055,3252,714,234Inventories3,218,6722,806,945Due from related parties18,78441,462Deferred taxes365,448295,714Other receivables, prepaid expenses, and other assets191,124146,694Marketable securities-362,758Due from employees404,871264,182Prepayments for goods140,712118,327Total current assets26,770,78928,627,940Plant and equipment, net13,938,53913,977,611Land use rights, net3,764,0313,747,225Construction in progress36,78828,430Patents, net5,676,5065,724,000Long-term investments295,749295,749Deposits1,560,785953,267Deferred taxes466,518456,222Total long-term assets25,738,91625,182,504TOTAL ASSETS$52,509,705$53,810,444LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESAccounts payable$2,520,797$3,332,174Other payables and accrued liabilities1,895,8352,150,079Advance for research and development241,454251,050Short-term debt23,109,88823,915,452Current portion of long-term debt3,717,3803,717,380Due to related parties82,59827,063Taxes payable148,558352,998Customer deposits767,810335,391Due to employees340,283122,440Deferred taxes109,495172,844Total current liabilities32,934,09834,376,871LONG-TERM LIABILITIESNotes payable1,920,9341,920,934Advance for research and development1,075,7421,065,478Deferred taxes940,733917,530Minority interests5,277,3035,177,413Total long-term liabilities9,214,7129,081,355TOTAL LIABILITIES42,148,81043,458,226COMMITMENTS AND CONTINGENCIESSHAREHOLDERS EQUITYCommon stock, $0.001 par value; 75,000,000 shares authorized; 27,000,000 shares issued
and outstanding at March 31, 2007 and December 31, 200627,00027,000Additional paid-in capital5,204,3525,204,352Retained earnings (the restricted portion is $998,149 at March, 31, 2007 and at
December 31, 2006)4,429,8764,590,079Accumulated other comprehensive income699,667530,787Total Shareholders Equity10,360,89510,352,218TOTAL LIABILITIES AND SHAREHOLDERS EQUITY$52,509,705$53,810,444   See accompanying notes to condensed consolidated financial statements. 4   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (UNAUDITED)    Three Months Ended
March. 31, 2007Three Months Ended
March. 31, 2006REVENUES$5,296,176$5,331,827COST OF GOODS SOLD(2,972,516)(2,983,114)GROSS PROFIT2,323,6602,348,713Research and development132,1981,600Selling and distribution988,1011,680,669General and administrative1,176,049647,210INCOME FROM OPERATIONS27,31219,234OTHER INCOME (EXPENSE)Interest expense, net(342,948)(269,605)Government grants49,723459,993Gain on sale of marketable securities118,626-Other expense, net(29,968)(31,145)(LOSS) INCOME FROM OPERATIONS BEFORE INCOME TAXES(177,255)178,477INCOME TAX BENEFIT (EXPENSE)66,830(97,143)(LOSS) INCOME FROM OPERATIONS BEFORE MINORITY INTERESTS(110,425)81,334MINORITY INTERESTS(49,779)(66,798)NET (LOSS) INCOME(160,204)14,536OTHER COMPREHENSIVE INCOMEForeign currency translation gain275,51367,233Income taxes related to other comprehensive income(72,735)(23,532)OTHER COMPREHENSIVE INCOME, NET OF INCOME TAXES202,77843,701COMPREHENSIVE  INCOME$42,574$58,237WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED27,000,00025,000,000Net (loss) income per common share, basic and diluted$(0.01)$0.00  See accompanying notes to condensed consolidated financial statements. 5   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)     For the Three Months Ended March 31,20072006CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income$(160,204)$14,536Adjustments to reconcile net (Loss)income to net cash provided by operating activities:Depreciation and amortization533,463385,226Provision for doubtful accounts30,803-Amortization of discount on notes receivable(21,109)-Deferred taxes(120,177)65,091Gain on sale of marketable securities(118,626)-Minority interests share of net income49,77966,798Changes in operating assets and liabilities, net of effects of acquisition:(Increase) Decrease In:Accounts receivable4,303,968440,175Inventories(411,727)(1,006,797)Other receivables, prepaid expenses, and other assets(44,428)46,757Prepayments for goods(22,385)(230,718)Increase (Decrease) In:Accounts payable(811,377)1,678,111Other payables and accrued liabilities(257,024)(502,025)Advance for research and development667-Due to employees217,844(375,564)Taxes payable(204,440)33,291Customer deposits432,420(209,723)Net cash provided by operating activities3,397,447405,158CASH FLOWS FROM INVESTING ACTIVITIES:Restricted cash(19,104)134,601Purchases of plant and equipment(274,144)(201,395)Purchases of construction in progress(8,358)(10,987)Purchase of land use right-(393,117)Deposit for long term investment(583,356)(124,211)Deposit for plant and equipment(160,420)(56,531)Repayment of notes receivable566,218104,014Issuance of notes receivable(3,886,201)(13,240)Due from employees(140,689)(179,320)Proceeds from sale of marketable securities374,751-Net cash used in investing activities(4,131,303)(740,186)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from short-term debt1,292,959-Repayments of short-term debt(2,098,523)(2,692,925)Proceeds from notes payable-2,120,494Advances from related parties77,952-Repayment of advances to related parties-(36,486)Net cash used in financing activities(727,612)(608,917)DECREASE IN  CASH AND CASH EQUIVALENTS(1,461,468)(943,945)Effect of exchange rate changes on cash275,36691,901Cash and cash equivalents at beginning of period6,116,8163,129,450CASH AND CASH EQUIVALENTS AT END OF PERIOD$4,930,714$2,277,406SUPPLEMENTARY CASH FLOW INFORMATIONIncome taxes paid$76,913$6,296Interest paid$360,536$261,327  See accompanying notes to condensed consolidated financial statements. 6   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)     SUPPLEMENTAL NON-CASH DISCLOSURES:  1. During the three months ended March 31, 2007 and 2006, $38,475 and $274,229 was transferred from deposits to patents.2. During the three months ended March 31, 2007 and 2006, $97,783 and $0 was transferred from deposits to plant and equipment.3. During the three months ended March 31, 2007, $3,659 of the notes receivable was discounted and $21,109 of the discount was amortized.  See accompanying notes to condensed consolidated financial statements. 7   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    1. ORGANIZATION AND PRINCIPAL ACTIVITIES  The primary operations of Aida Pharmaceuticals, Inc. and subsidiaries (the Company) are the development, production and distribution of cardiovascular and anti cancer drugs, in the form of powder for injection, liquid for intravenous injection, capsule, tablet, ointment, etc., within the PRC.  2. BASIS OF PRENTATION  The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The condensed consolidated balance sheet information as of December 31, 2006 was derived from the audited consolidated financial statements included in the Companys Annual Report Form 10-KSB.  These interim condensed consolidated financial statements should be read in conjunction with that report.  3. PRINCIPLES OF CONSOLIDATION  The unaudited condensed consolidated financial statements include the accounts of Aida Pharmaceuticals, Inc. (Formerly BAS Consulting, Inc.) and the following subsidiaries:  (i) Earjoy Group Limited (Earjoy) (100% subsidiary of Aida); (ii) Hangzhou Aida Pharmaceutical Co., Ltd. (HAPC) (100% Subsidiary of Earjoy); (iii) Hangzhou Boda Medical Research and Development Co., (Boda) (100% Subsidiary of HAPC); (iv) Hainan Aike Pharmaceutical Co., Ltd. (Hainan) (60.61%% subsidiary of HAPC) and Yang Pu Aike Pharmaceutical Co., Ltd. (Yangpu) (95% subsidiary of Hainan). HAPC exercise significant influence over Hainan by controlling over 50% of the voting rights; (v) Changzhou Fangyuan Pharmaceutical Co., Ltd. (Fangyuan) (66% subsidiary of HAPC). (vi) Shanghai Qiaer Bio-Technology Co., Ltd. (Qiaer) (77.5% subsidiary of HAPC)  All significant inter-company accounts and transactions have been eliminated in consolidation.    8   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    4. CONCENTRATIONS  The Company has major customers who accounted for the following percentages of total sales and total accounts receivable in 2007 and 2006:  SalesMajor CustomersFor the Three Months Ended March 31, 2007For the Three Months Ended March 31, 2006Accounts ReceivableMarch 31, 2007December 31, 2006Company A-2%-30%Company B-10%-2%Company C-10%-2%Company D-21%-30%Company E26%-28%-Company F4%-3%-Company G2%-1%-  The Company has major suppliers who accounted for the following percentage of total purchase and total accounts payable in 2007 and 2006:  PurchaseMajor SuppliersFor the Three Months Ended March 31, 2007For the Three Months Ended March 31, 2006Accounts PayableMarch 31, 2007December 31, 2006Company H11%12%6%7%Company I9%8%3%3%  The sole market of the Company is the PRC for the periods ended March 31, 2007 and 2006.  Of the total revenue for the three months ended March 31, 2007 and 2006, 69% and 47% was fully dependent on the patent for Etimicin Sulfate owned by the Company.  The net book value of the patent is $84,967 at March 31, 2007.  5. USE OF ESTIMATES  The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ materially from those estimates.   9   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    6. FOREIGN CURRENCY TRANSLATION  The accompanying condensed consolidated financial statements are presented in United States dollars.  The functional currency of the Company is the Renminbi (RMB).  The condensed consolidated financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.  March 31, 2007December 31, 2006Period end RMB:         US$ exchange rate7.73427.8087Average period RMB:  US$ exchange rate7.77157.9395  7. FAIR VALUE OF FINANCIAL INSTRUMENTS  The Companys financial instruments include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, due to/from related parties, other receivables and prepaid expenses, due to employees, prepayments for goods, accounts payable, other payable and accrued liabilities, accrued expenses, short-term debt, taxes payable and customer deposits.  Management has estimated that the carrying amount approximates fair value due to their short-term nature.  8. EARNINGS (LOSS) PER SHARE  Basic earning (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earning (loss) per share is computed similar to basic earning (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive securities outstanding for the periods presented.  9. ADOPTION OF NEW ACCOUNTING POLICY  Effective January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48"), an interpretation of FASB statement No. 109, Accounting for Income Taxes. The interpretation addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of March 31, 2007, the Company does not have a liability for unrecognized tax benefits.  10   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    9. ADOPTION OF NEW ACCOUNTING POLICY (CONTINUED)  The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company is subject to U.S. federal or state income tax examinations by tax authorities for years after 2005. During the periods open to examination, the Company has net operating loss and tax credit carry forwards for U.S. federal and state tax purposes that have attributes from closed periods. Since these NOLs and tax credit carry forwards may be utilized in future periods, they remain subject to examination. The Company also files certain tax returns in China. As of March 31, 2007 the Company was not aware of any pending income tax examinations by China tax authorities.  The Company's policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of March 31, 2007, the Company has no accrued interest or penalties related to uncertain tax positions.  10. NEW ACCOUNTING PRONOUNCEMENTS  In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which provides enhanced guidance for using fair value to measure assets and liabilities. SFAS No. 157 provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. SFAS No. 157 also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. SFAS No. 157 is effective for financial statements issued in fiscal years beginning after November 15, 2007 and to interim periods within those fiscal years. The Company is currently in the process of evaluating the effect, if any, the adoption of SFAS No. 157 will have on its consolidated results of operations, financial position, or cash flows.  In February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities −− Including an amendment of FASB Statement No. 115 (“FAS 159”).  FAS 159, which becomes effective for the Company on January 1, 2008. This standard permits companies to choose to measure many financial instruments and certain other items at fair value and report unrealized gains and losses in earnings. Such accounting is optional and is generally to be applied instrument by instrument. The Company does not anticipate that election, if any, of this fair-value option will have a material effect on the consolidated results of operations, financial position or cash flows.   11   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    11. NOTES RECEIVABLE  Notes receivable at March 31, 2007 and December 31, 2006 consist of the following:  Notes receivable from unrelated companies:March 31, 2007
(Unaudited)December 31, 2006Due January 30, 2007  (subsequently settled)$-$256,125Due January 31, 2007  (subsequently settled)-502,366Due January 31, 2007  (subsequently settled)-14,189Due April 30, 2007 (subsequently settled)19,394-Due June 30, 2007248,614-Due August 31, 2007-12,806Due September 15, 20073,887,915-Due September 20, 2007425,880487,242Due October 31, 2007581,831576,280Due November 11, 2007387,888384,187Due November 30, 2007129,296128,062Due December 1, 200723,52323,299Due December 1, 20077,1687,100Due December 2, 2007-64,032Due December 14, 2007332,435329,263Due December 15, 200764,648-Subtotal6,108,5922,784,951Less: Discount53,26770,717Total notes receivable, net$6,055,325$2,714,234  Notes receivable are interest-free and unsecured.  In 2006, interest-free notes were provided to companies for their assistance in developing distribution channels and new markets for the Company. The Company recorded selling and distribution expense and a discount on the notes receivable of $80,095 based on the present value of the notes receivable using a 6% rate.  In 2007, an interest-free note was provided to a company for its assistance in research and development activities. The Company recorded research and development expense and a discount on the notes receivable of $3,659 based on the present value of the notes receivable using a 6% rate.  For the three months ended March 31, 2007, $21,109 of interest income was recognized in the accompanying consolidated statements of income (loss) from the amortization of the discount.  12. INVENTORIES  Inventories at March 31, 2007 and December 31, 2006 consist of the following:  March 31, 2007
(Unaudited)December 31, 2006Raw materials$1,379,107$1,712,850Work-in-progress864,557500,997Finished goods975,008593,098Total$3,218,672$2,806,945  12   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    13. PLANT AND EQUIPMENT  Plant and equipment consist of the following as of March 31, 2007 and December 31, 2006:  March 31, 2007
(Unaudited)December 31, 2006At cost:Buildings$9,030,469$8,944,313Machinery9,472,6209,206,036Motor vehicles749,843742,689Office equipment684,782668,428Leasehold improvements450,213455,35620,387,92720,016,822Less:  Accumulated depreciationBuildings1,415,366880,647Machinery3,772,0313,504,714Motor vehicles476,509445,523Office equipment440,739412,530Leasehold improvements344,743795,7976,449,3886,039,211Plant and equipment, net$13,938,539$13,977,611  The net book value of buildings and machinery pledged for certain bank loans at March 31, 2007 and December 31, 2006 is $4,901,979 and $4,892,624, respectively.  Also see Note 17.  Depreciation expense for the three months ended March 31, 2007 and 2006 is $410,177 and $328,033, respectively.  14. LAND USE RIGHTS  March 31, 2007
(Unaudited)December 31, 2006Cost$3,983,389$3,945,385Less: Accumulated amortization219,358198,160Land use rights, net$3,764,031$3,747,225  Amortization expense for three months ended March 31, 2007 and 2006 is $19,797 and $9,620 respectively.  Amortization expense for the next five years and thereafter is as follows:  2007 within one year$59,388200879,185200979,185201079,185201179,185Thereafter3,387,903Total$3,764,031  The net book value of the land use right pledged for certain bank loans at March 31, 2007 and December 31, 2006 is $1,617,379 and $1,572,139, respectively.  Also see Note 17.   13   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    15. PATENTS  March 31, 2007
(Unaudited)December 31, 2006Cost$6,502,563$6,446,568Less: Accumulated amortization826,057722,568Patents, net$5,676,506$5,724,000  Amortization expense for three months ended March 31, 2007 and 2006 is $103,489 and $47,573, respectively.  Amortization expense for the next five years and thereafter is as follows:  2007 within one year$247,6712008358,6302009297,9042010297,9042011295,720Thereafter4,178,676Total$5,676,506  16. DEPOSITS  Deposits at March 31, 2007 and December 31, 2006 consist of the following:  March 31, 2007
(Unaudited)December 31, 2006Deposits for patent$665,227$703,702Deposits for plant and equipment160,42097,783Deposits for long-term investment735,138151,782Total$1,560,785$953,267  During the three months ended March 31, 2007, the Company paid $160,420 as deposits to acquire certain equipment.   Of the deposits, $97,783 was transferred to plant and equipment in the first quarter of 2007.  During the three months ended March 31, 2007, a deposit of $38,475 was transferred to patent.  During the three months ended March 31, 2007, the Company paid $66,173 and $517,183, as deposits to invest in Beijing Beimei Union Real Estate Development Co.,Ltd. and Jiangsu Microbial Research Institute.  14   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    17. SHORT TERM DEBT  Short-term debt as of March 31, 2007 and December 31, 2006 consists of the following: March 31, 2007
(Unaudited)December 31, 2006Loans from Industrial and Commercial Bank of China Qingchun Branch, due August 20, 2007, monthly interest only payments at 6.732% per annum, secured by assets owned by the Company. Also see Note 13.$646,479$640,311Loans from Industrial and Commercial Bank of China Qingchun Branch, due August 15, 2007, monthly interest only payments at 6.732% per annum, secured by assets owned by the Company. Also see Note 13.808,099800,389Loans from Industrial and Commercial Bank of China Qingchun Branch, due July 26, 2007, monthly interest only payments at 6.435% per annum, secured by assets owned by the Company. Also see Note 13.905,070896,436  Loans from Industrial and Commercial Bank of China Qingchun Branch, due June 6, 2007, monthly interest only payments at 6.435% per annum, secured by assets owned by the Company. Also see Note 13.1,292,9591,280,623Loans from Industrial and Commercial Bank of China Qingchun Branch, due June 27, 2007, monthly interest only payments at 6.435% per annum, secured by assets owned by the Company.  Also see Note 13.775,775768,374Loan from Bank of Communication Qingchun Branch, due June 5, 2007 monthly interest only payments at 6.435% per annum, guaranteed by Nanwang Information Industry Group Co., Ltd1,292,9591,290,623Loan from Bank of Communication Qingchun Branch, due June 19, 2007 monthly interest only payments at 6.435% per annum, guaranteed by Nanwang Information Industry Group Co., Ltd1,292,9591,290,623Loan from Hangzhou Commercial Bank Gaoxin Branch due February 27, 2007, monthly interest only payments at 5.3625% per annum, guaranteed by Xinchang Guobang Chemicals Co., Ltd. (subsequently repaid on its due date)-1,290,623Loan from Hangzhou Commercial Bank Gaoxin Branch due February 1, 2008, monthly interest only payments at 5.3625% per annum, guaranteed by Xinchang Guobang Chemicals Co., Ltd.1,292,959-Loan from Bank of China Kaiyuan Branch due May 8, 2007, monthly interest only payments at 6.7275% per annum, guaranteed by Xinchang Guobang Chemicals Co., Ltd. (subsequently repaid on its due date)1,034,3671,034,498Loan from Bank of China Kaiyuan Branch due May 16, 2007, monthly interest only payments at 6.7275% per annum, guaranteed by Xinchang Guobang Chemicals Co., Ltd.646,479650,311  Loan from Bank of China Kaiyuan Branch due April 17, 2007, monthly interest only payments at 6.417% per annum, guaranteed by Xinchang Guobang Chemicals Co., Ltd. (subsequently repaid on its due date)2,198,0312,187,059  15   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    17. SHORT TERM DEBT (CONTINUED)  March 31, 2007
(Unaudited)December 31, 2006Loan from Huaxia Bank Wenhui Branch due April 3, 2007, monthly interest only payments at 6.417% per annum,  guaranteed by Ningbo Tianheng Co., Ltd (subsequently repaid on its due date)-778,374Loans from Industrial and Commercial Bank of China Qingtai Branch, due August 4, 2007, monthly interest only payments at 6.138% per annum, guaranteed by Hangzhou Jinou Group.1,292,9591,290,623  Loan from China Development Bank Haikou Branch, due December 21, 2007 and monthly interest only payments at 6.138% per annum, guaranteed by Haikou Assure Investment Ltd.387,888394,187  Loans from Changzhou Commercial Bank, due June 20, 2007, monthly interest only payments at 8.37% per annum, secured by assets owned by the Company. Also see Note 14.1,829,5351,822,081Loans from Changzhou Commercial Bank, due June 20, 2007, monthly interest only payments at 8.37% per annum, secured by assets owned by the Company. Also see Note 14.1,144,2671,143,351Loans from Changzhou Commercial Bank, due May 18, 2007, monthly interest only payments at 8.37% per annum, guaranteed by Jiangyin Huilun Co. Ltd.258,592270,614Total short-term bank loans17,099,37717,829,100  March 31, 2007
(Unaudited)December
31, 2006Notes payable to unrelated companies:Due May 30, 2007$192,198$190,365Due May 8, 2007 (subsequently repaid on its due date)1,034,3671,024,498Due June 21, 20071,292,9591,280,623Due August 31, 2007775,775768,374Due December 30, 2007, interest charged at 9.00% per annum646,479640,311Due January 15, 2007 (subsequently repaid on its due date)-133,185Due April 5, 2007, interest charged at 5.58% per annum (subsequently repaid on its due date)323,240320,156Due April 20, 2007, interest charged at 5.58% per annum (subsequently repaid on its due date)323,240320,156Due November 30, 2007, interest charged at 5.85% per annum517,183512,249Due December 31, 2007, guaranteed by Donghong Taisheng Co., Ltd258,592256,125Due August 28, 2007, interest charged at 6.40% per annum, guaranteed by Ge Xiaohu646,478640,310Total notes payable6,010,5116,086,352Total short-term debt$23,109,888$23,915,452    16   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    17. SHORT TERM DEBT (CONTINUED)  All the notes payable are subject to bank charges of 0.05% of the principal as a commission on each loan transaction. Bank charges for notes payable were $3,005 and $420 for three months ended March 31, 2007 and 2006, respectively.  Restricted cash of $2,002,340 is held as collateral for the following notes payable at March, 31, 2007:  Due May 30, 2007$192,198Due May 8, 20071,034,367Due June 21, 20071,292,959Total$2,519,524  18. INCOME TAXES  (a)  Corporation Income Tax (CIT)  In accordance with the relevant tax laws and regulations of PRC, the corporation income tax (CIT) rate is 33%.  In 2006, HAPC applied to the local tax authority for a favorable corporate income tax rate of 26.4% for companies registered in coastal economic zone of PRC, which was approved in October 2006. As a result, the corporate income tax rate applicable to HAPC was changed to 26.4% from 33%.  Hainan and Yangpu are subsidiaries registered in Hainan, PRC, and their corporate income tax rate of 15% is the tax rate for companies registered in Hainan, PRC in accordance with the relevant tax laws in PRC.   Fangyuan is a subsidiary of HAPC and its applicable corporate income tax rate is 15%, since the company was recognized as high-tech companies by the PRC government.  However, in accordance with the relevant taxation laws in the PRC, from the time that a company has its first profitable tax year, a foreign investment company is exempt from corporate income tax for its first two years and is then entitled to a 50% tax reduction for the succeeding three years. For Hangzhou and Hainan, the first profitable year for income tax purposes as a foreign investment company was 2004.  Income tax benefit (expense) for the three months ended March 31, 2007 and 2006 are summarized as follows:  For the Three Months Ended March 31,(Unauditetd)20072006Current:Provision for State Corporation Income Tax$(48,557)$(104,603)Provision for Local Corporation Income Tax(4,855)(10,460)(53,412)(115,063)Deferred:Provision for State Corporation Income Tax109,31116,291Provision for Local Corporation Income Tax$10,931$1,629120,24217,920Income tax benefit (expense)$66,830$(97,143)  The Companys income tax benefit (expense) differs from the expected tax benefit (expense) for the three months ended March 31, 2007 and 2006 (computed by applying the CIT rate of 26.4 percent to (loss) income before income taxes) as follows:  17   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    18. INCOME TAXES (CONTINUED)  For the Three Months Ended March 31, (Unauditetd)20072006Computed expected benefit (expense)$46,795$(47,118)Effect of tax rates difference among subsidiaries(107,884)(112,439)Valuation allowance(5,089)(29,076)Time difference-17,920Tax exemptions133,00873,570Income tax benefit (expense)$66,830$(97,143)  The tax effects of temporary differences that give rise to the Companys net deferred tax assets and liabilities as of March 31, 2007 and December 31, 2006 are as follows: March 31, 2007 (Unaudited)December 31, 2006Deferred tax assets:Current portion:Consulting and audit expenses$105,564$105,564Selling and distribution expenses167,040102,404Bad debt provision49,67741,949Other43,16745,797Subtotal365,448295,714Non-current portion:Depreciation71,03265,416Impairment and amortization51,27141,502Bad debt provision24,29924,299Pre-operating expenses12,54612,546Research and development costs281,453281,453Other42,30742,307Less: Valuation allowance(16,390)(11,301)Subtotal466,518456,222Total deferred tax assets831,966751,936Deferred tax liabilities:Current portion:Sales cut-off63,136134,954Unrealized gains from marketable securities30,71030,710Other15,6497,180Subtotal109,495172,844  18   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    18. INCOME TAXES (CONTINUED)  Non-current portion:Subsidy income192,105192,105Depreciation36,53628,963Research and development costs35,31535,315Government grant58,84158,841Other37,13135,274Intangible assets of acquisition580,805567,032Subtotal940,733917,530Total deferred tax liabilities1,050,2281,090,374Net deferred liabilities$(218,262)$(338,438)  (b)  Value Added Tax (VAT)  Enterprises or individuals who sell commodities, engage in repair and maintenance or import or export goods in the PRC are subject to a value added tax in accordance with Chinese Laws.  The value added tax standard rate is 17% of the gross sale price. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Companys finished products can be used to offset the VAT due on the sales of the finished products.  The VAT payable of $111,217 and $301,103 at and March 31, 2007 and December 31, 2006, respectively, are included in other payables and accrued expenses in the accompanying condensed consolidated balance sheets.  19. MARKETABLE SECURITIES  The Company purchased an investment fund at a cost of $256,125 on September 6, 2006. The fair market value of the fund as of December 31, 2006 was $362,758. The difference between the market value and the cost of $106,633 was recognized as other comprehensive income at December 31, 2006, and was included as a separate component of shareholders equity for year then ended.  The securities were classified as available-for-sale.  On January 28, 2007, the Company sold the marketable securities for $374,751 resulting in a gain of $118,626 which was included in the condensed consolidated statement of income (loss) and comprehensive income for the three months ended March 31, 2007.  20. COMMITMENTS AND CONTINGENCIES  (a) Lease Commitment  The Company occupies plant and office space leased from third parties.  Accordingly, for the three months ended March 31, 2007 and 2006, the Company recognized rental expense for these spaces of $187,836 and $84,539 respectively.  19   AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    20. COMMITMENTS AND CONTINGENCIES (CONTINUED)  As of March 31, 2007, the Company has outstanding commitments with respect to non-cancelable operating leases for real estate, which fall due as follows:  Period Ending March 31,Amount2007$112,9412008145,1582009140,5042010140,5042011124,988Thereafter65,369Total$729,464  (b) Capital Commitment  As of March 31, 2007, the Company has outstanding commitments with respect to non-cancelable long term investment, which fall due as follows:  Period Ending March 31Amount2007$8,376  As of March 31, 2007, the Company has outstanding commitments with respect to non-cancelable land use right transfer, which fall due as follows:  Period Ending March 31,Amount2007$39,238  (c) Contingencies  In 2006, the Company brought a legal action against Jiangxi Pharmaceutical Co., Ltd. and Hainan Licheng Pharmaceuticals Co., Ltd. for their infringement upon the patent of Etimicin transfusion. As the plaintiff, the Company has claimed compensation of approximately $38,590 for the infringement. According to the judges report from the local court in Haikou, PRC, on December 30, 2006, the Company won the lawsuit and Jiangxi Pharmaceutical Co., Ltd. and Hainan Licheng Pharmaceuticals Co., Ltd. will be required to pay $38,590 as compensation to the Company. However, Jiangxi Pharmaceutical Co., Ltd. and Hainan Licheng Pharmaceuticals Co., Ltd. appealed the ruling to a higher level court and the Company has not received the compensation as of May 11, 2007.  Considering the uncertainties of the legal proceeding, the Company did not record a contingent gain for this at March 31, 2007.  20


AIDA PHARMACEUTICALS, INC. (FORMERLY BAS CONSULTING, INC.) AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)    20. COMMITMENTS AND CONTINGENCIES (CONTINUED)  In December of 2005, the Company sued Hainan Haomai Pharmaceutical Co., Ltd. and Fuzhou Likang Pharmaceuticals Co., Ltd. for their infringement upon the patent of Etimicin transfusion. As the plaintiff, the Company has claimed compensation of approximately $38,590 for the infringement. According to the judges report from the local court in Haikou, PRC, on January 18, 2007, the Company won the lawsuit and Hainan Haomai Pharmaceutical Co., Ltd. and Fuzhou Likang Pharmaceuticals Co., Ltd. will pay $38,590 as compensation for the infringement.  However, Hainan Haomai Pharmaceutical Co., Ltd. and Fuzhou Likang Pharmaceuticals Co., Ltd. appealed the ruling to a higher level court and the Company has not received the compensation as of May 11, 2007.  Considering the uncertainties of the legal proceeding, the Company did not record a contingent gain for this at March 31, 2007.  In January 2007, the Company was sued by Jiangying Xinqiao Construction Co., Ltd for an overdue construction payment of $243,318. The local judge held a court in April, 2007.  The Company believes the claim is without merit and plans to vigorously contend the claim. As such, there is no contingent accrual at March 31, 2007.   21     Item 2.  Managements Discussion and Analysis or Plan of Operation.  FORWARD-LOOKING STATEMENTS  We have included forward-looking statements in this report. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward looking statements. Without limiting the foregoing, words such as "may", "will", "expect", "believe", "anticipate", "estimate", "plan" or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors. Factors that might cause forward-looking statements to differ materially from actual results include, among other things, overall economic and business conditions, demand for the Company's products, competitive factors in the industries in which we compete or intend to compete, natural gas availability and cost and timing, impact and other uncertainties of our future acquisition plans.  GENERAL  Aida Pharmaceuticals Inc. (formerly known as BAS Consulting, Inc.) (the Company) was incorporated in the State of Nevada on December 18, 2002 (inception). The Company attempted to operate as a consulting firm and was not successful.  The Company then began to seek an acquisition candidate and on December 8, 2005, we completed and closed the Share Exchange Agreement (the Agreement) dated as of June 1, 2005 by and among BAS Consulting, Inc., Earjoy Group Limited, a British Virgin Islands international business company (Earjoy), and the shareholders of Earjoy (the Earjoy Shareholders). A copy of the Agreement was previously filed as an Exhibit to our Current Report on Form 8-K dated June 1, 2005 as filed with the Securities and Exchange Commission (the SEC) on June 15, 2005.  On March 6, 2006, the Company amended its Articles of Incorporation to change the name of the Company to Aida Pharmaceuticals, Inc. As a result of the acquisition, we now operate the business of AIDA Pharmaceuticals, Inc.  On July 5, 2006, the Company registered 2,500,000 shares of its common stock, $.001 par value on Form S-8 with the Securities and Exchange Commission. Pursuant to the registration statement, the Company issued 2,000,000 shares to employees and consultants.  OUR BUSINESS  AIDA Pharmaceuticals, Inc. has the following subsidiaries:  a) Earjoy Group Limited, (Earjoy) b) Hangzhou Aida Pharmaceutical Co., Ltd (Hangzhou Aida); c) Hangzhou Boda Medical Research and Development Co., Ltd. (Boda); d) Hainan Aike Pharmaceutical Co., Ltd. (Aike) and; e) Changzhou Fangyuan Pharmaceutical Co., Ltd. (Fangyuan) f) Shanghai Qiaer Bio-technology Co., Ltd (Qiaer)  Earjoy is an investment holding company.  Hangzhou Aida has been in operation since March 1999 and was established as a limited liability company under the laws of the Peoples Republic of China (PRC) on March 26, 1999.  On December 23, 2004, Earjoy entered into a Share Purchase Agreement with Best Nation Investment Co., Ltd. for the acquisition by Earjoy of 100% of all interests in Hangzhou Aida.   22     Hangzhou Aida is a fully integrated pharmaceutical company engaged in the development, manufacture, marketing, licensing, and distribution of pharmaceutical products primarily in Mainland China.  Aida (including its subsidiaries) has a total of nine production lines for the manufacturing of antibiotics, cardiovascular and anti-tumor drugs in various forms, including injectable powder, injectable liquid, capsules, tablets and ointments. All of them have been certified according to the Good Manufacturing Practices (GMP) guidelines issued by the State Food and Drug Administration of the People’s Republic of China (“SFDA”). Hangzhou Aida sells its Category-A antibiotic(Etimicin)under the trademark “Aida” and “PanNuo” etc. All these products are prescription drugs that are sold mainly to the hospitals in Mainland China.  Hangzhou Aidas strategy is to control all facets of its research and development efforts, including formulation development, clinical studies, regulatory submissions and manufacturing. In addition, the company markets its own branded products directly to health care professionals through its Mainland China sales operations. A key element of Hangzhou Aidas business is the development, manufacture and sale of branded pharmaceutical products that incorporate Hangzhou Aidas expertise in research and development and exclusive relationships with raw material suppliers, which provide significant therapeutic advantages over existing competing formulations.  Hangzhou Aida will also work to develop synergistic marketing partnerships in China and around the world in areas such as technology licensing, clinical research, product development, in-licensing and out-licensing of products, co-development and co-marketing agreements.  The headquarters of Hangzhou Aida is located in Hangzhou specializes in the production of Etimicin powder.  Boda is a wholly owned subsidiary of Hangzhou Aida and engages itself in the research and development of new drugs.  Aike was once a 50% owned subsidiary of Hangzhou Aida. In August 2006, Hangzhou Aida increased its position through an additional direct investment of $568,994 into Hainan Aike and making a $63,222 purchase of the interests held by a third-party institutional shareholder Merlin Green Canada Inc. Thereafter, Hainan Aike became a 60.61% owned subsidiary of the Company. Hangzhou Aida exercises significant influence over Aike by controlling over 60.61% of the voting rights and Aike owns 95% of Yangpu Aike Pharmaceutical Co., Ltd. (Yangpu). Aike specializes in the production of transfusion type of Etimicin AiYi.  Fangyuan is a 66% owned subsidiary of Hangzhou Aida. Fangyuan is sole supplier of the raw material of Etimicin and is also a major producer of the liquid type of Etimicin ChuangCheng.  The Company is capable of producing all types of Etimicin namely, powder, liquid and transfusion and thus has achieved a significant influence in the industry. This is a significant and unique advantage of the Company.  On August 8, 2006, the Company completed and closed the Share Purchase Agreements with Zhejiang Pharmaceutical Co., Ltd , Shanghai Handsome Biotech Co., Ltd and Zhongtuo Times Investment Co., Ltd. respectively. With these agreements, the Company acquired 77.5% of the outstanding shares of Shanghai Qiaer Bio-Technology Co., Ltd collectively.  Qiaer Bio-Tech was founded in 2001 and is located in the Zhangjiang Hi-tech development zone in Shanghai, China.  The key product of Qiaer Bio-Tech is rh-Apo21, a pioneering potential biopharmaceutical therapy with genetic engineering techniques used for cancers. Qiaer Bio-Tech has applied for three patents from the Chinese government authority, one of which has been granted with the other two in process. The Phase I clinical trial of rh-Apo2l has been successfully completed and the Phase II clinical trial has been initiated.   23     Products  The table below illustrates the major products produced and marketed by Aida:  ProductProduced BySpecificationStandard/CategoryEtimicin Sulfate Injection PowderAida50mg, 100mg, 150mgNational Category-AEtimicin Sulfate Injection liquidFangyuan1ml, 2ml, 4mlNational Category-AEtimicin Sulfate for transfusionAike100ml(with 100mg/200mg)National Category-D  Etimicin Sulfate is the first antibiotic developed in China. It is a new generation of the amino glycoside family of antibiotics. Aida has the exclusive right to the production of this powder for injection and transfusion type and Aidas subsidiary, Fangyuan, is one of the two producers who exclusively produce the liquid for injection. The patent is protected through 2013.  It also has patent certificates from six foreign countries, including USA, Russia and United Kingdom. Etimicin sulfate is suitable for the treatment of various inflammations, such as:  (i) Respiratory infection, such as acute bronchitis, acute onset of chronic bronchitis and pulmonary infections; (ii) Kidney and urinogenital infection, such as acute pyelonephritis or acute onset of chronic cystitis; (iii) Soft skin tissue infection; and (iv) Trauma and operations (before and after) preventive uses.  According to our market study, the Company believes that we have occupied more than 75% of the total market share of Etimicin in Mainland China. The Company is capable of producing a full series of Etimicin, namely, powder, transfusion and liquid. Emphasis will be placed on developing new products for the market.  Products Under Development  Major new products under developments by Aida include:  Ø 5-Deoxy-Fluorordine.Aida has developed a new liquid for injection type of drug generated from 5-fluroruacil that has displayed better anticancer results and fewer side effects. This new product has been under clinical testing since 1998. Test results showed that it has only nominal side effects, a broad spectrum and is highly effective. The Company will supplement clinical trials according to the instruction from State Food and Drug Administration in the PRC.  Ø Apoptotic Factor (rh-Apo2l). Rh-Apo2l is being evaluated in a Phase I trial as a potential cancer therapeutic. The Phase I clinical trials were completed at the end of June, 2006.  Shanghai Qiaer Bio-Technology, which is acquired by Hangzhou Aida, has applied for three patents from the Chinese government authority. One patent has been granted and the other two are currently in process. We plan to complete the second and third stage clinical trials in the second half of 2007 and get production approval in the first half of 2008.  Ø Methylcanthatidinimide for Injection. It is another new drug being developed by Fangyuan used for cancer treatment. It is supposed to be a Category B new drug. The clinical tests are expected to be completed by the first half of 2008 and the production is expected to begin by the end of 2009.  Ø SYO2. Hangzhou Aida has created one medicine extracted from herbal essence, called SYO2 that has exhibited bioactivity for brain anti-thrombosis. The drug, developed solely by an aligned research center of Hangzhou Aida, has shown to be safe, effective and without side effects. The Company believed that stroke patients treated by SYO2 would be significantly recovered after administration of the drug. Aida has completed SYO2s pharmacological study and has applied for a patent. The Company plans to apply for clinical tests within the next 15 months. Hangzhou Aida intends to apply for production approval by the end of 2010.   24     Ø Prodigiosin to Treat Pancreatic Cancer. Prodigiosin, a naturally occurring red pigment, is currently in pre-clinical trials for the treatment of pancreatic cancer. Aida Pharmaceuticals is developing a method to utilize the biochemical properties of Prodigiosin to create a non-invasive treatment for pancreatic cancer.  Ø Anti-CD86 Monoclonal Antibody to Treat Immunity Diseases.Certain immunity diseases activate T-cells (a type of white blood cell), causing them to unnecessarily attack healthy tissue. Aidas goal in developing the Anti-CD86 Monoclonal Antibody is to inhibit T-cells from harming healthy tissue.  Ø Anti-CTLA-4 Monoclonal Antibody to Inhibit Tumor Growth. In the case of certain cancers, tumors over-express self-proteins, essentially hiding the tumor from the immune system. Aida Pharmaceuticals is in the development stages of Anti-CTLA-4 Monoclonal Antibody which may relieve the inhibition of T-cells allowing them to identify the over-expressed proteins and in turn naturally attack cancer cells without harming healthy tissues.  Aida is optimistic about the market potential of its products for the following reasons:  Ø The demand for international quality drugs by the Chinese populace has historically increased as per capita income and the standard of living increase continually;  Ø The sales of Hangzhou Aidas Etimicin sulfate is estimated to grow continuously for the next three years after several years of market development;  Ø Aida is now planning to build up international business relationship with global players gradually in future. The international markets should increase the sales growth;  Ø Aida has achieved a monopoly status in this industry, with all types of Etimicin products and from the material chain to the final product chain. This is a significant and unique advantage of Aida and  Ø The Company is preparing for the production of several new drugs especially the commercialization of Shanghai Qiaer Bio-Technologys Rh-Apo2l within two years, which should boost the sales growth of Aida per annum.  CRITICAL ACCOUNTING POLICIES AND ESTIMATES  We believe the following is among the most critical accounting policies that impact our consolidated financial statements. We suggest that our significant accounting policies, as described in our consolidated financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management's Discussion and Analysis of Financial Condition and Results of Operations.  We recognize revenue in accordance with Staff Accounting Bulletin ("SAB") No. 104. All of the following criteria must exist in order for us to recognize revenue:  1. Persuasive evidence of an arrangement exists; 2. Delivery has occurred or services have been rendered; 3. The seller's price to the buyer is fixed or determinable; and 4. Collectibility is reasonably assured.  For fixed-priced refundable contracts, the Company recognizes revenue on a completion basis. Progress payments received/receivables are recognized as revenue only if the specified criteria is achieved, accepted by the customer, confirmed not refundable and continued performance of future research and development services related to the criteria are not required.   25     We have identified one policy area as critical to the understanding of our consolidated financial statements. The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of sales and expenses during the reporting periods. With respect to net realizable value of the Company's accounts receivable, Long-lived assets and inventories, significant estimation judgments are made and actual results could differ materially from these estimates.  For the three months ended March 31, 2007, management of the Company provided a reserve on its accounts receivable to reflect managements expectation on the collectibility of aged accounts receivable. Managements estimation of the reserve on accounts receivable at March 31, 2007 was based on the current facts that there are aged accounts receivable. Management has assessed the customers ability to continue to pay the outstanding invoices timely, and whether their financial position will deteriorate significantly in the future which would result in their inability to pay their debts to the Company.  For the first quarter ended March 31, 2007, the Company had made no impairments for Long-lived assets. Long-lived assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". The Company also periodically evaluates the amortization periods of its depreciable assets to determine whether subsequent events and circumstances warrant revised estimates of the useful lives.  Management's estimation whether a provision is needed is based on managements analysis of the current facts of whether potential impairments on the current carrying value of the inventories due to potential obsolescence exist as a result of aged inventories. In making their judgments, management made their estimations of the potential impairments based on the demand for their products in the future and the trends of turnover of the inventories.  While the Company's management currently believes that there is little likelihood that the actual results of their current estimates will differ materially from such current estimates, if the financial position of its customers deteriorates, if there is a significant reduction in the carrying value of its Long-lived assets, or if, customer demand for its products decreases significantly in the near future, the Company could realize significant write downs for uncollectible accounts receivable, impairment of Long-lived assets or slow moving inventories.  In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which provides enhanced guidance for using fair value to measure assets and liabilities. SFAS No. 157 provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. SFAS No. 157 also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. SFAS No. 157 is effective for financial statements issued in fiscal years beginning after November 15, 2007 and to interim periods within those fiscal years. The Company is currently in the process of evaluating the effect, if any, the adoption of SFAS No. 157 will have on its consolidated results of operations, financial position, or cash flows.  In February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities −− Including an amendment of FASB Statement No. 115 (“FAS 159”). FAS 159, which becomes effective for the Company on January 1, 2008. This standard permits companies to choose to measure many financial instruments and certain other items at fair value and report unrealized gains and losses in earnings. Such accounting is optional and is generally to be applied instrument by instrument. The Company does not anticipate that election, if any, of this fair-value option will have a material effect on the results or operations or consolidated financial position.   26     RESULTS OF OPERATIONS  THREE MONTHS ENDED MARCH 31, 2007 AS COMPARED TO THREE MONTHS ENDED MARCH 31, 2006  The following table sets forth selected statements of income data as a percentage of revenues for the three months indicated.  Three months Ended March 31,20072006Revenues100.00%100.00%Cost of goods sold(56.13)%(55.95)%Gross margin43.87%44.05%Research and development(2.50)%(0.03)%Selling and distribution(18.66)%(31.52)%General and administrative(22.21)%(12.14)%Other income (expense)(3.86)%2.99%Income taxes1.26%(1.82)%Minority interests(0.94)%(1.25)%Net income(3.03)%0.27%  Revenues, Cost of Goods Sold and Gross Profit Revenues for the three months ended March 31, 2007 were $5,296,176 a decrease of $35,651 from $5,331,827 for the three months ended March 31, 2006. Compared to the first quarter of 2006, the decrease in sales revenues from our group of companies engaging in the production of different types of Etimicin for the first quarter of 2007 and 2006 were as follows:  Three months ended March 31,Companies20072006Increase/
(Decrease)Hangzhou Aida Pharmaceutical Co., Ltd (Hangzhou Aida) specializes in the production of Etimicin powder$1,222,032$1,332,506$(110,474)Hainan Aike pharmaceutical Co., Ltd (Aike) specializes in the production of Etimicin transfusion3,029,4693,063,184(33,715)Changzhou Fangyuan Pharmaceutical  Co., Ltd. (Fangyuan) specializes in the production of Etimicin injection1,044,675936,137108,538TOTAL$5,296,176$5,331,827$(35,651)  For the three months ended March 31, 2007, the sales of Hangzhou Aida decreased by $110,474 or 8.29% as compared to the same period of 2006. The decrease is mainly attributable to a decrease in sales of Etimicin powder product, Aida in Shanghai.  For the three months ended March 31, 2007, the sales of Hainan Aike decreased by $33,715 or 1.10% as compared to the same period of 2006. The decrease in sales can mainly be accounted for the slight decrease in sales of the Etimicin transfusion product, Aiyi.  For the three months ended March 31, 2007, the sales of Fangyuan increased by $108,538 or 11.59% as compared to the same period of 2006. The increase in sales is the result of the intense marketing and promotion programs of the Etimicin injection product, Chuangcheng.   27     The cost of goods sold for the first quarter ended March 31, 2007 was $2,972,516 a decrease of $10,598 from $2,983,114 for the year 2006. The increase in cost of goods sold can be analyzed as follows:    Three months ended March 31,Companies20072006Increase/
(Decrease)Hangzhou Aida Pharmaceutical Co., Ltd. (Hangzhou Aida) specializes in the production of Etimicin powder$364,001$382,950$(18,949)Hainan Aike pharmaceutical Co., Ltd. (Aike) specializes in the production of Etimicin transfusion1,760,8001,785,339(24,539)Changzhou Fangyuan Pharmaceutical Co., Ltd. (Fangyuan) specializes in the production of Etimicin injection847,715814,82532,890TOTAL$2,972,516$2,983,114$(10,598)  The cost of goods sold of Hangzhou Aida for the three months ended March 31, 2007 decreased by $18,949, or 4.95% compared to $382,950 for the same period in 2006. The decrease in the cost of goods sold can mainly be accounted for by a decrease in sales by 8.29%.  The cost of goods sold of Aike for the three months ended March 31, 2007 decreased by $24,539, or 1.37% compared to for the same period in 2006. The increase can mainly be explained by the decrease in sales.  The cost of goods sold of Fangyuan for the three months ended March 31, 2007 increased by $32,890, compared to $814,825 for the same period in 2006.The increase is mainly due to the increase in sales.  Compared to the three months ended March 31, 2006, the percentage gross profit margin for our Company decreased from 44.05% to 43.87% for the first quarter ended March 31, 2007.  Research and Developments Compared with research and development cost of $1,600 for the first three months of 2006, research and development cost was $132,198 for the same period in 2007 representing cost incurred for the clinical trials for Rh-Apo2l by Qiaer.    28     Selling and Distribution Selling and distribution expenses decreased from $1,680,669 for the three months ended March 31, 2006 to $988,101 for the same period this year, or a 41.21% decrease.Compared to the same period in 2006, our decrease in the expenses was because of the following:  Three months ended March 31,Breakdown of Expenses20072006Increase/
(Decrease)Traveling expenses$386,021$487,849$(101,828)Sale commissions26,732217,376(190,644)Office expenses233,835224,1659,670Payroll67,94094,424(26,484)Conference fees38,38669,188(30,802)Rent9,00768,136(59,129)Entertainment79,80253,08726,715Other expenses143,268220,208(76,940)Advertising expenses3,110246,236(243,126)TOTAL$988,101$1,680,669$(692,568)  For the three months ended March 31, 2007 traveling expenses decreased by $101,828, compared with the same period last year. The decrease was mainly explained that the Company controlled the traveling expenses by effective administration.  The sales commissions for the three months ended March 31, 2007 decreased by $190,644, compared to $217,376 for the same period last year. The decrease was due to the decrease in the sales with commissions for Fangyuan.  For the three months ended March 31, 2007 advertising expenses decreased by $243,126, compared with the same period last year. The decrease was mainly explained that the Company reduced the advertisement greatly in the first quarter this year.  General and Administrative General and administrative expenses increased from $647,210 for the three months ended March 31, 2006 to $1,176,049 for the same period this year, representing a 81.71% increase. The details of general and administrative expenses for the three months ended March 31, 2007 and 2006 were as follows:  Three months ended March 31,Breakdown of Expenses20072006Increase/
(Decrease)Traveling expenses$38,683$63,216$(24,533)Office expenses54,94927,66027,289Payroll216,356117,81098,546Conference fees6,17206,172Labor union & education & staff welfare295,89884,878211,020Amortization of intangible assets159,449124,08935,360Consultancy fees115,16377,40737,756Entertainment73,41536,28737,128Other expenses124,53724,75299,785Depreciation86,75556,24130,514Social compensation4,67234,870(30,198)TOTAL$1,176,049$647,210$528,839  29     The labor union expenses & education expenses & staff welfare of $295,898 for the three months ended March 31, 2007 increased by $211,020 from $84,878 for the same period last year. The increase was explained by the increase both in the payroll per staff and in the staff numbers. And the payroll expenses of $216,356 for the first quarter this year increased by $98,546 from $117,810 for the same period last year.  The consultancy which the Company pays consultants for their consultation service increased from $77,407 for the three months ended March 31, 2006 to $115,163 for the same period this year. The increase was mainly attributable to the increase in the consultancy fees of $40,143 from Hangzhou Aida.  Amortization of intangible assets of $159,449 for the three months ended March 31, 2007 increased by $35,360 from $124,089 for the same period last year. The increase was explained by that the increase in amortization of intangible assets of $59,399 occurred by Qiaer.  Other Income (Expenses) Other income (expenses) decreased from $159,243 for the three months ended March 31, 2006 to $(204,567) for the same period this year. The other income (expenses) for the three months Ended March 31, 2007 and 2006 were as follows:  Three months Ended March 31,Breakdown of other income/(expenses)20072006Increase/
(Decrease)Interest expense, net$(342,948)$(269,605)$(73,343)Government grants49,723459,993(410,270)Gain on sale of marketable securities118,626-118,626Other (loss) income, net(29,968)(31,145)1,177TOTAL$(204,567)$159,243$(363,810)  Interest expense for the three months ended March 31, 2007 increased by $73,343 from $269,605 for the same period last year. The increase is mainly due to an increase in the interest for the short-term borrowings.  Government grants for the three months ended March 31, 2007 represented subsidies from the government was $49,723, as compared to $459,993 for the same period last year.  Gain on sale of marketable securities for the three months ended March 31, 2007 represented income from Chinese securities investment and no such income was incurred for the first quarter last year.  Income Tax Income tax benefit (expense) was $66,830 for the three months ended March 31, 2007, as compared to income tax expense of $(97,143) for the same period last year.  In accordance with the relevant tax laws and regulations of PRC, the corporation income tax rate is 33%. As a Company registered in Hainan, PRC, Aike is entitled a beneficial corporate income tax rate of 15% in accordance with the relevant tax laws in the PRC. Fangyuan enjoys a beneficial tax rate of 15% as it is registered in a national high-tech development zone. According to the relevant laws and regulations of PRC, the preferential tax rate of 15% is applied to companies established in the national high-tech development zone.  In accordance with the relevant taxation laws in the PRC, from the time that a company has its first profitable tax year, a foreign investment company is exempt from corporate income tax for its first two years and is then entitled to a 50% tax reduction for the succeeding three years. Since Hangzhou Aida Pharmaceutical Co., Ltd has been a foreign investment company since 2004, so we are entitled to a 50% tax reduction in 2007.  Net Income (Loss) In the first three months of 2007, our net income decreased by $174,740 to a net loss of $(160,204) from $14,536 in the same period in 2006.  30      LIQUIDITY AND CAPITAL RESOURCES  Cash Our cash balance decreased by $1,186,102 to $4,930,714 as of March 31, 2007, as compared to $6,116,816 as of December 31, 2006. The decrease was mainly attributable to cash out flow of investing and financing activities of $4,131,303 and $727,612, respectively, an increase in inventories of $411,727 and our decrease in accounts payable and other payables and accrued liabilities of $811,377 and $257,024 respectively. The decrease in cash flow was partially offset by a decrease in accounts receivable of $4,303,968. The net cash flow was a deficit $(1,186,102) for first quarter this year.  Our cash flow provided by operations amounted to $3,397,447 for the three months ended March 31, 2007, compared to $405,158 for the same period last year.  Our cash flow used in investing activities amounted to $4,131,303 of which $3,886,201 was used for the issuance of notes receivable. The Company invested $274,144 and $583,356 in the purchases of plant and equipment and deposit for long term investment respectively.  The net cash used in financing activities amounted to $727,612 of which $2,098,523 was used for the repayments of short-term debt.  At March 31, 2007, the Company had short-term debt of $23,109,888 of which $17,099,377 was short-term bank borrowings and the remaining $6,010,511 represented notes payable to unrelated parties. The interest for the short-term borrowings varied from 5.3625% to 8.37% per annum whereas the notes payable to unrelated parties is interest free. The Company believes that the cash generated from normal operation will be sufficient to pay off its liabilities as the short-term borrowings and commitments fall due.  Working Capital Our working capital deficiency increased by $414,378to $(6,163,309) at March 31, 2007, as compared to $(5,748,931) at December 31, 2006. The increase in working capital deficiency at March 31, 2007 was mainly attributable to our decrease in accounts receivable of $4,334,772 and cash and cash equivalents of $1,186,102 and an increase in customer deposits of $432,420 offset by an increase in notes receivable of $3,341,091 and a decrease in accounts payable of $811,377.  The Company currently generates its cash flow through operations and the Company believes that its cash flow generated from operations will be sufficient to sustain operations for the next twelve months. Also, from time to time, the Company may require extra funding through financing activities and investments for expansion. Also, from time to time, the Company may come up with new expansion opportunities for which our management may consider seeking external funding and financing.  Code of Ethics The company has adopted a code of ethics that applies to the company's principle executive officer, Principal financial officer, principal accounting officer or controller. The Company will provide, at no cost, a copy of the Code of Ethics to any shareholder of the Company upon receiving a written request sent to the Companys address shown on Page 1 of this report.   31     Item 3.  Controls and Procedures.  (a) Evaluation of Disclosure Controls and Procedures.  Within the 90 days prior to the date of this Quarterly Report for the period ended March 31, 2007, we carried out an evaluation, under the supervision and with the participation of our management, including the Company's Chairman and Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934 (the "Exchange Act"), which disclosure controls and procedures are designed to insure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods specified by the SEC's rules and forms. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company's period SEC filings.  (b) Changes in Internal Controls.  There were no changes in our internal control over financial reporting during the quarter ended March 31, 2007 that has materially affected or is reasonably likely to affect our internal control over financial reporting.  PART II  OTHER INFORMATION  Item 1. Legal Proceedings.  In 2006, the Company brought a legal action against Jiangxi Pharmaceutical Co., Ltd. and Hainan Licheng Pharmaceuticals Co., Ltd. for their infringement upon the patent of Etimicin transfusion. As the plaintiff, the Company has claimed compensation of approximately $38,590 for the infringement. According to the judges report from the local court in Haikou, PRC, on December 30, 2006, the Company won the lawsuit and Hainan Haomai Pharmaceutical Co. Ltd. and Fuzhou Likang Pharmaceuticals Co., Ltd. will be required to pay $38,590 as compensation to the Company. However, Jiangxi Pharmaceutical Co., Ltd. and Hainan Licheng Pharmaceuticals Co., Ltd. appealed the ruling to a higher level court and the Company has not received the compensation as of May 11, 2007.  In December of 2005, the Company sued  Hainan Haomai Pharmaceutical Co., Ltd. and Fuzhou Likang Pharmaceuticals Co., Ltd. for their infringement upon the patent of Etimicin transfusion. As the plaintiff, the Company has claimed compensation of approximately $38,590 for the infringement. According to the judges report from the local court in Haikou, PRC, on January 18, 2007, the Company won the lawsuit and Hainan Haomai Pharmaceutical Co., Ltd. and Fuzhou Likang Pharmaceuticals Co., Ltd. will pay $38,590 as compensation for the infringement.  However, Hainan Haomai Pharmaceutical Co., Ltd. and Fuzhou Likang Pharmaceuticals Co., Ltd. appealed the ruling to a higher level court and the Company has not received the compensation as of May 11, 2007.  In January 2007, the Company was sued by Jiangying Xinqiao Construction Co., Ltd for an overdue construction payment of $243,318. The Company believes the claim is without merit and plans to vigorously contend the claim. The local judge has been held a court in April, 2007.  The Company believes the claim is without merit and plans to vigorously contend the claim. As such, there is no contingent accrual at March 31, 2007.  Item 2. Changes in Securities  None.  Item 3. Defaults upon Senior Securities  None.  Item 4.  Submission of Matters to a Vote of Security Holders.  None.  32      Item 5.  Other Information  None.  Item 6.  Exhibits and Reports on Form 8-K.  No Reports on Form 8-K  Exhibits   Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-B.  Exhibit No. SEC Ref. No. Title of Document Location  1 31.1 Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Attached  2. 31.2 Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Attached   3 32.1 Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* Attached  4 32.2 Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* Attached  *The Exhibit attached to this Form 10-QSB shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.   33     SIGNATURES  In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.   AIDA PHARMACEUTICALS, INC.        Date: May 14, 2007 /s/ Biao Jin Mr. Biao Jin Chief Executive Officer       Date: May 14, 2007 /s/ Hui Lin Ms. Hui Lin Chief Financial Officer   34