UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[x]  Annual Report under Section 13 or 15(d) of the  Securities  Exchange Act of
     1934 for the fiscal year ended March 31, 2006.

[_]  Transition Report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934 for the transition period from ____________ to ______________.

     Commission file number 33-61892-FW

                           GAMMA PHARMACEUTICALS INC.
                     (formerly, Emerging Gamma Corporation)
        (Exact name of small business issuer as specified in its charter)

           DELAWARE                                               72-1235452
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                   2225 Angelfire Street, Las Vegas, NV 89128
               (Address of principal executive offices) (Zip Code)

                                 (702) 953-6446
                (Issuer's telephone number, including area code)

     Securities registered under Section 12(b) or 12(g) of the Act: None

     Check  whether  the issuer is not  required  to file  reports  pursuant  to
Section 13 or 15(d) of the Exchange Act. |_|

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 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 [X] NO [_]

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

<PAGE>

     Indicate by check mark whether the registrant is a shell company as defined
in Rule 12b-2 of the Exchange Act. Yes |_| No |X|

     State issuer's revenues for its most recent fiscal year: None

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant as of June 30, 2006 was $660,350.

     The number of shares outstanding of the issuer's classes of Common Stock as
of June 28, 2006:

     Common Stock, $0.001 Par Value - 10,051,000 shares

     Transitional small business disclosure format: YES [_] NO [X]

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE















                                      -2-
<PAGE>

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

     Except for historical  information  contained herein, this Annual Report on
Form 10-KSB contains certain  forward-looking  information  based on our current
expectations. The inclusion of forward-looking statements should not be regarded
as a representation  by us or any other person that the objectives or plans will
be  achieved  because  our  actual  results  may  differ   materially  from  any
forward-looking  statement.  The  words  "may,"  "should,"  "plans,"  "believe,"
"anticipate,"  "estimate," "expect," their opposites and similar expressions are
intended to identify forward-looking  statements, but the absence of these words
does not necessarily  mean that a statement is not  forward-looking.  We caution
readers that such statements are not guarantees of future  performance or events
and are subject to a number of factors that may tend to  influence  the accuracy
of the statements,  including but not limited to, those risk factors outlined in
the  section  titled  "Risk  Factors".  You  should  not  unduly  rely on  these
forward-looking  statements,  which  speak  only as of the  date of this  Annual
Report.  We  undertake  no  obligation  to publicly  revise any  forward-looking
statement  to  reflect  circumstances  or events  after the date of this  Annual
Report or to  reflect  the  occurrence  of  unanticipated  events.  You  should,
however,  review the  factors  and risks we describe in the reports we file from
time to time with the Securities and Exchange  Commission ("SEC") after the date
of this Annual Report.

                                     PART I

Item 1.   DESCRIPTION OF BUSINESS

Technology Transfer Agreement

     On April 7, 2006,  Gamma  Pharmaceuticals  Inc.  (formerly  Emerging  Gamma
Corporation),  a Delaware  corporation  (the "Company",  "Gamma",  "we", "us" or
"our") entered into a Technology  Transfer  Agreement (the "Technology  Transfer
Agreement") with Mr. Peter Cunningham,  Mr. Joseph Cunningham and Mr. Hao Zhang,
individuals  ("Assignors"  or  "New  Management"),  pursuant  to  which  we have
obtained all copyrights,  trademarks,  and know-how (collectively,  "Transferred
Technology") to a portfolio of vitamin and  nutriceutical  products and personal
care products.  The Transferred  Technology is based on proprietary  formulation
technology,  and we believe  such  technology  represents  improved  versions of
branded  products  currently being marketed by other  companies.  Assignors have
developed a  proprietary-marketing  platform for (i) the Greater China  (Peoples
Republic of China [China], Hong Kong and Republic of China [Taiwan]) healthcare,
vitamins and  nutriceutical  markets,  over-the-counter  ("OTC")  pharmaceutical
markets,  and  personal  care  markets and (ii) the United  States  vitamins and
nutriceutical markets, OTC pharmaceutical markets, and personal care markets. We
believe that the products, technologies and marketing platform will enable us to
pursue a specialized  business  model for  succeeding in these Greater China and
United States markets.

     Under the  Technology  Transfer  Agreement,  the Company has  acquired  all
copyrights,  trademarks,  trade  secrets  and know how for a product  line of 10
vitamins  and  nutriceuticals,  and a product  line of  personal  care  products
including  IceDrops,  an alcohol based hand sanitizer (together "New Products").
The  products  have  been   formulated  to  be  in  compliance  with  prevailing


                                      -3-
<PAGE>

regulations of the appropriate  government regulatory agencies in China, Taiwan,
Hong Kong and the U.S.  Final  submission  of labeling  and product  performance
claims,  to the same  regulatory  agencies,  is  pending.  We intend to take the
necessary steps to market the products in these jurisdictions and will undertake
manufacturing  through  qualified  third  party  sources.  In all of these major
markets, New Management has experience marketing and selling similar products.

     The Company now has an up-scale suite of consumer products including:

          o    Hand Sanitizer Lotion, water free
          o    Hand Sanitizer Lotion with Aloe, water free
          o    Supplement multivitamins, 4 fruit flavors (for children)
          o    Supplement Calcium, 4 fruit flavors
          o    Supplement Vitamin C, orange flavor
          o    Adjunctive supplement Immune booster
          o    Adjunctive supplement energy booster
          o    Adjunctive supplement for improved cognition
          o    Adjunctive   supplement   for   reducing   the  side  effects  of
               chemotherapy
          o    Adjunctive  supplement  for  symptoms  of  type II  diabetes  and
               pre-diabetes
          o    Adjunctive supplement for the symptoms of menopause
          o    Adjunctive supplement for stress reduction

     Copyright  protection is secured for all of the New Products'  formulations
except for the adjunctive supplement for the symptoms of menopause, for which an
application for copyright is being submitted and awaiting receipt of a copyright
registration number. The products will be tailored to the target market segments
by age group,  purchasing  power,  lifestyle,  medical  condition or therapeutic
objective.  The product  mix is  segmented  by package  size so as to meet price
points  in major  retail  channels  such as  convenience  stores  (small  pack),
pharmacy and supermarket (standard pack), and hypermarkets (large pack).

     In consideration for the Transferred Technology, the Company issued 242,811
shares of its common stock to Mr. Peter Cunningham, 138,069 shares of its common
stock to Mr. Joseph Cunningham, and 95,220 shares of its common stock to Mr. Hao
Zhang.  This  aggregate of 476,100 shares  represents  90% of Gamma's  currently
outstanding  shares of common  stock.  Following  the  Company's  18 for 1 stock
dividend,  effective May 15, 2006, the aggregate number of shares owned by these
3 persons was 9,045,500.

     Upon the effectiveness of the Technology Transfer Agreement,  Gamma's Board
of  Directors  has resigned and has been  replaced by Mr. Peter  Cunningham,  as
Chairman of the Board of Directors,  Mr. Joseph  Cunningham,  Company Secretary,
and Mr. Hao Zhang. Gamma's officers also resigned and were replaced by Mr. Peter
Cunningham  (Chief Executive  Officer),  Mr. Joseph  Cunningham (Chief Financial
Officer and Secretary),  and Mr. Hao Zhang (Chief Marketing Officer).  Following
the effectiveness of the Technology Transfer Agreement,  the name of the Company
was changed from Emerging Gamma  Corporation to Sunburst  Pharmaceuticals,  Inc.
and, as of July 14, 2006, was changed again to Gamma Pharmaceuticals Inc.


                                      -4-
<PAGE>

     In connection with the  consummation of the Technology  Transfer  Agreement
and the Employment  Agreements  (described  below), the address of our principal
executive  officers  was changed to 2225  Angelfire  Street,  Las Vegas,  Nevada
89128.  The Company  plans to move to new larger  office space as the  situation
merits.

Employment Agreements with New Management

     Also on April 7, 2006, Gamma executed five-year employment  agreements (the
"Employment  Agreements")  with Mr. Peter  Cunningham,  Chief Executive  Officer
("CEO")  and  designated  Chairman  of  the  Board  of  Directors,   Mr.  Joseph
Cunningham,  Chief Financial  Officer ("CFO") and designated member of the Board
of Directors and Company  secretary and Mr. Hao Zhang,  Chief Marketing  Officer
("CMO")  and  designated  member  of the  Board of  Directors.  Pursuant  to the
Employment  Agreements,  each of the  members of New  Management  is required to
devote his full time  professional  activities to the conduct of the business of
the Company.

     Mr. Peter Cunningham became Gamma's new Chief Executive Officer,  effective
April 7 2006.  He will  receive an annual base  salary of  $125,000  and various
benefits  afforded to the Company's other  executives.  If Gamma  terminates Mr.
Peter  Cunningham  for any reason not specified or Gamma does not give Mr. Peter
Cunningham notice of non-renewal on or before the four-year  anniversary date of
his Employment  Agreement,  it will be obligated to pay Mr. Peter Cunningham six
months base salary plus any earned but unpaid bonus and benefits.

     Mr. Joseph Cunningham became Gamma's new Chief Financial Officer, effective
April 7, 2006.  He will receive an annual base salary of  $120,000,  and various
benefits  afforded to the Company's other  executives.  If Gamma  terminates Mr.
Joseph Cunningham for any reason not specified or Gamma does not give Mr. Joseph
Cunningham notice of non-renewal on or before the four-year  anniversary date of
his Employment Agreement,  it will be obligated to pay Mr. Joseph Cunningham six
months base salary plus any earned but unpaid bonus and benefits.

     Mr. Hao Zhang became Gamma's new Chief Marketing  Officer,  effective April
7, 2006. He will receive an annual base salary of $115,000, and various benefits
afforded to the Company's other  executives.  If Gamma  terminates Mr. Hao Zhang
for any reason  not  specified  or Gamma  does not give Mr. Hao Zhang  notice of
non-renewal  on or  before  the  four-year  anniversary  date of his  Employment
Agreement, it will be obligated to pay Mr. Hao Zhang six months base salary plus
any earned but unpaid bonus and benefits.

Letter Agreement

     The  Technology  Transfer  Agreement  and the  Employment  Agreements  were
entered into  pursuant to the terms of a Letter  Agreement  dated March 7, 2006,
which was  amended  and  restated  effective  as of April 7, 2006,  between  the
Company and Joseph Cunningham,  acting on behalf of New Management.  In addition
to outlining the  intention of the Company and New  Management to enter into the
Technology  Transfer  Agreement  and  the  Employment  Agreements,  such  Letter
Agreement also included the following additional terms:


                                      -5-
<PAGE>

         (a) The  Company was to replace the  outstanding  stock  options of its
four (4) resigning Directors with stock grants totaling 9,300 shares (pre-18 for
1 stock dividend).

         (b) Upon the effective date of the Technology Transfer  Agreement,  the
Company was to pay Allen  Campbell,  the  Company's  resigning  Chief  Executive
Officer  and  Chairman  of the Board,  a success fee in the amount of $35,000 in
cash and 10,000 shares of common stock (after the 18 for 1 stock dividend).  Mr.
Campbell also received a $5,000 due diligence fee.

         (c) New  Management  was to seek to raise  $3,000,000 of private equity
from  investors in the U.S.,  Europe and Asia,  and if they fail to do so within
eight (8) months,  former  management,  on behalf of Company  shareholders,  may
request that the Technology  Transfer Agreement be terminated and the Employment
Agreements be terminated  without severance pay, in which case the Company is to
return to New Management all intellectual  property  transferred pursuant to the
Technology Transfer Agreement in return for all shares issued to New Management.

         (d) Former  officers and  directors,  Allen Campbell and Jerry Jarrell,
were to receive a  compensation  bonus of 10,000  shares of Gamma  common  stock
(following the 18 for 1 stock dividend) and to serve as advisors to the Board of
Directors.

History and Development of the Company

     The  Company  was  incorporated  under the laws of the State of Delaware on
February  10,  1993,  for the  purpose of seeking  out  business  opportunities,
including acquisitions that the Board of Directors, in its discretion,  believed
to be good  opportunities.  In 2002,  after a  tender  offer  for the  Company's
shares,  a new Board of Directors  succeeded the original Board,  but maintained
the same goal of seeking out new  business  opportunities.  This goal led to the
acquisition of the  Transferred  Technology and new business  described above in
connection with the Technology  Transfer  Agreement.  Such  acquisition has also
resulted  in  bringing  into the Company  specialized  management  to enable the
Company to use the new  technology to develop a business  based on the marketing
and  sale of  vitamins  and  nutriceuticals,  OTC  pharmaceutical  products  and
personal  care  products in Greater China and the United  States.  However,  the
marketing of vitamins and nutriceuticals,  OTC pharmaceuticals and personal care
products in Greater  China and vitamins  and  nutriceuticals  and personal  care
products in the U.S.,  or any other  business  opportunity  in which the Company
ultimately  participates,  will  likely be highly  risky  and  speculative.  The
Company's  current cash balance will not be adequate for the Company to continue
its  operations  for this fiscal  year;  and, in order to compete in this or any
other new business  opportunity an additional cash infusion will be required and
without such  additional cash infusion the Company will very quickly deplete its
current cash reserve.

Corporate Development

     On April 7, 2006, Gamma entered into the aforementioned Technology Transfer
Agreement and Employment Agreements, and Gamma's officers and directors changed.


                                      -6-
<PAGE>

The future of the  business is now  entrusted  to Mr.  Peter  Cunningham,  Chief
Executive Officer,  Mr. Joseph Cunningham,  Chief Financial Officer, and Mr. Hao
Zhang, Chief Marketing Officer.

     Together these events represent a material change in our business  profile.
We  will  now  seek  to  exploit  business  opportunities  in  the  vitamin  and
nutriceuticals  industry in the greater China regional marketplace including the
Peoples  Republic  of China,  Hong  Kong,  Macau,  and  Taiwan and in the United
States.

Capitalization

     As of June 30, 2006, following the issuance of shares to New Management,  a
reduction  in par value from  $1.00 to $.001 per  share,  and the 18 for 1 stock
dividend,  the  authorized  capital of the Company  consists of: (i)  20,000,000
shares of common stock ("Common  Stock"),  par value $.001, of which  10,051,000
shares are issued and  outstanding,  and (ii) 500,000 shares of preferred  stock
("Preferred  Stock"),  par  value  $.001,  no shares  of which  are  issued  and
outstanding.  The Company,  as of June 30, 2006,  had no  outstanding  warrants,
options or convertible loans.

Our Business

     On April 7, 2006, we entered into a Technology Transfer Agreement for a new
line of consumer goods in the vitamins and nutriceuticals  sector focused mainly
on  the  greater  China  healthcare,   vitamins  and  nutriceutical  goods,  OTC
pharmaceutical,  and  personal  care  product  markets and in the United  States
vitamins and nutriceuticals and personal care product markets.  Also on April 7,
2006, we hired a new Chief Executive Officer,  Chief Financial Officer and Chief
Marketing Officer. New Management is experienced  operating in the greater China
and US markets and has a marketing platform and proprietary technologies that we
believe  will  provide  Gamma  with a  specialized  business  model  for  use in
developing a greater China consumer goods and OTC pharmaceutical business.

Our Growth Strategy

     Our strategy is to focus  initially on  developing,  marketing  and selling
products in the  Lifestyle  of Health &  Sustainability  ("LOHAS")  marketplace.
(LOHAS is a term popularized by the Natural Marketing Institute for the American
Botanical  Council and  others).  The LOHAS market is an  identifiable  consumer
category.  In the LOHAS  category,  there are found high growth  sub-segments of
selected vitamins and nutriceuticals,  over-the-counter  ("OTC")  pharmaceutical
products,  and personal care products.  We believe that these  categories of the
LOHAS market are fast  developing,  in both Greater China and the United States.
We further believe that the Greater China market offers the fastest path to grow
revenues and achieve  profitability in this business.  In China, the economy has
grown  between 8% and 10% in each year of this  decade.  According to IMS Market
Prognosis Asia 2003 - 2007, the  pharmaceutical  industry is expected to grow at
11% in 2006 and 11.3% in 2007, and the OTC pharmaceutical market (IMS classifies
vitamins and nutriceuticals in their OTC pharmaceutical analysis) is expected to
see the fastest growth,  nearly 30% per year. In the United States, LOHAS is the
fastest growing market in the nutritional  supplement category, and according to
research  reports from the LOHAS Market  Review,  the U.S.  LOHAS market grew by
approximately 1% new joiners and 10% new spending per year to reach $355 billion


                                      -7-
<PAGE>

in 2004.  The Natural  Marketing  Institute for the American  Botanical  Council
reports that the LOHAS market now includes  more than 14% of the  population  in
the U.S., or  conservatively  40 million  persons.  The Hartman  Group, a market
research  company,   classifies   certain  vitamins,   nutriceuticals   and  OTC
pharmaceutical  products  as  "wellness  products."  They report that nearly $66
billion was spent on wellness  products in 2004. At that level of spending,  the
wellness  products  category  accounts  for  approximately  25% of the  spending
amongst the LOHAS consumer category.

     Under New  Management,  the  Company  will aim to become a  technology  and
formulation  leader in the wellness  products category of the fast growing LOHAS
market. Our new management team has experience with formulation,  production and
commercialization for medicated  confectionary  supplement products and personal
care products.  We have  proprietary  formulations  for vitamin and  nutritional
supplements,  and have developed  formulations for adjunctive therapies for type
II diabetes, symptoms of menopause, cognition, stress reduction, and relief from
selected  side  effects  of  chemotherapies.  Also,  we expect to be a leader in
personal care products.  For example,  the new products  acquired by the Company
include one of the leading hand  sanitizer  products  currently on the market in
Beijing, China.

     Our  management  team has decades of experience in the personal  care,  OTC
pharmaceutical  and  prescription  pharmaceutical  industries  worldwide and, in
particular, in Asia. We have developed our product offering to take advantage of
the following market place characteristics:

          o    High incidence and high growth of targeted medical conditions and
               lifestyle objectives;
          o    Identifiable  market segments for our products and known consumer
               purchasing patterns by targeted customers;
          o    High growth  markets in Asia  including  Greater China and in the
               United States;
          o    Low cost  manufacturing  or repacking  mainly from China but also
               located in the United States;
          o    Multi-tiered price points for product and market differentiation;
               and
          o    Branded consumer product preferences.

     We  believe  the  combination  of the  above  marketplace  characteristics,
combined with our  management  expertise and products,  will enable our business
model to achieve long term sustained profitability.

     We will initially  develop our corporate  infrastructure as a marketing and
sales organization. We will not initially seek to acquire manufacturing in China
but will  instead look to leverage New  Management's  contacts and  expertise to
outsource  manufacturing  to  a  third  party  original  equipment  manufacturer
("OEM"). We believe this will provide us with an advantage in cost of goods sold
manufacturing  margins and improve our return on assets.  We may, in the future,
look to acquire or partner more closely with a single  manufacturer  for certain
products.  Our  objective  is to utilize New  Management's  marketing  and sales
abilities and resources to generate  revenue and establish a market  presence in
key product  categories  that can be expanded  as we develop  local  capacity in


                                      -8-
<PAGE>

Asia.  Our aim is to establish a known and  recognized  product  brand that,  we
believe, will attract attention from local suppliers and retailers who will seek
to carry our product offerings.

     Our corporate organization today is comprised of a US based headquarters in
Las  Vegas,  Nevada.  In the  future  we expect to  incorporate  a wholly  owned
subsidiary in Hong Kong to facilitate  doing business in greater China.  We also
expect  to open a  Representative  Office  in  Beijing  China  and to  appoint a
Representative  in China.  We plan to use a variety of contract  and third party
resources in China and will  undertake all invoicing for their services from our
Hong Kong subsidiary.

Employees

     We have three  employees.  We intend to hire additional full time employees
to fill specific  functions in our organization.  We will also hire part-time or
independent contractors in connection with certain projects in Greater China and
the United  States.  We expect to have  full-time-equivalent  employees  working
directly  for  our  distributors,  manufacturers,  and  advertising  and  public
relations agencies. We will vary employment as product demand dictates.

Intellectual Property

     Our performance  and ability to compete depends to a significant  degree on
our proprietary knowledge. We rely or intend to rely on a combination of patent,
copyright and trade secret laws, non-disclosure agreements and other contractual
provisions to establish, maintain and protect our proprietary rights.

     On April 7, 2006, we entered into a Technology  Transfer Agreement pursuant
to  which  we have  obtained  all  copyrights,  trademarks,  and  know-how  to a
portfolio of vitamin and nutriceutical products and personal care products. This
Transferred  Technology is based on proprietary  formulation  technology that we
believe  represents  improved  versions of certain current branded  products now
being marketed by other companies.

Products

     We plan to develop additional vitamins and nutriceuticals and personal care
products  suitable  for both the  Greater  China  market and the  United  States
market. All of our formulations are or will be copyright protected. The products
we intend to sell will be tailored to the targeted market segments by age group,
purchasing power,  lifestyle,  medical condition or therapeutic  objective.  The
product  mix will then be  segmented  again by package  size so as to meet price
points  in major  retail  channels  such as  convenience  stores  (small  pack),
pharmacy and supermarket (standard pack), and hypermarkets (large pack).

Manufacturing

     At this time,  we intend to  contract  to  manufacture  our  products  with
leading supply manufacturers.  We believe that this is a lower-risk strategy and
will preserve capital investment  particularly  during the next 12-month period.
We believe that there is a surplus of manufacturing capacity for our products in
China and in the  United  States  and as such,  pricing  pressure  may result in


                                      -9-
<PAGE>

manufacturers  allowing for price  concessions,  providing us additional support
for managing our gross margins. We will aim to diversify our manufacturing where
possible so not to become too  dependent  on any one  manufacturing  group.  New
Management  has  worked  with  several  manufacturing  groups in the past and we
believe  the  relationship  with these  groups  will help the Company to quickly
organize its manufacturing resources.

Raw materials

     The  principal  raw  materials  required in our  operations  are  vitamins,
minerals,  herbs,  confectionary base and packaging components. We will purchase
the majority of our vitamins, minerals and herbs from raw material manufacturers
and  distributors  in North America and Asia. We believe that there are adequate
sources of supply for all of our principal raw  materials.  We also believe that
our strong relationships with our suppliers will yield improved quality, pricing
and overall  service to our  customers.  Although there can be no assurance that
our sources of supply for our principal  raw  materials  will be adequate in all
circumstances,  in the event that such sources are not adequate, we believe that
alternate sources can be developed in a timely and cost-effective manner.

Distribution

     We will focus on expanding our distribution  channels and networks in order
to extend our sales network  coverage in all major  provinces and cities of Asia
including Greater China and the west coast of the United States.  This expansion
of distribution networks we believe will enable us to introduce our new products
into target markets more  effectively.  We will use exclusive and  non-exclusive
third  party  distributors  for  specific  products  and  specific  distribution
territories.

     We will seek to hire  regional  sales  representatives  and  embed  certain
specialists with our distribution  partners on a full time equivalent  basis. We
also plan to use  commission-based  sales specialists.  Although there can be no
assurance of our success,  our objective is to expand into approximately  10,000
retail  outlets  in Asia and the  United  States  over the  next 18  months.  By
diversifying our distribution  base we will not have to rely on any single group
for the bulk of our sales.

Competition

     The market for  vitamins  and  nutritional  supplement  products  is highly
competitive.  Competition is based primarily on price, quality and assortment of
products, customer service, marketing support, and availability of new products.
We believe we can compete favorably in all of these areas.

     Our direct  competition  consists primarily of publicly and privately owned
companies,  which  tend to be highly  fragmented  in terms of both  geographical
market coverage and product categories.  We also compete with companies that may
have broader  product lines and/or larger sales volumes.  Our products will also
compete with  nationally  advertised  brand name products.  Most of the national
brand companies have resources greater than our resources.


                                      -10-
<PAGE>

     There are  numerous  companies  in the vitamin and  nutritional  supplement
industry selling products to retailers, including mass merchandisers, drug store
chains,  independent  drug stores,  supermarkets  and health food  stores.  Many
companies  within the industry are privately held.  Therefore,  we are unable to
precisely  assess  the  size  of all of our  competitors  or  where  we  rank in
comparison  to  such  privately  held  competitors  with  respect  to  sales  to
retailers.

Industry Overview

     China

     China  is  one  of  the  world's  major   producers  of   ingredients   for
pharmaceuticals,  herbal supplements,  nutritional supplements and personal care
products.  The Chinese  Statistics Bureau reports that, as of April 2003, in the
Chinese pharmaceutical industry, including the OTC pharmaceutical segment, there
were approximately 6,300 pharmaceutical  manufacturers  operating in China, with
the capacity to produce 1,350 prescription drugs and more than 8,000 traditional
Chinese  medicines  (typically  herbal  supplements  or  herbal  competitors  to
synthetic pharmaceutical products). In 2000, China's pharmaceutical industry had
aggregate  sales of US$28.2  billion,  which  represented  a 22%  increase  over
aggregate sales in 1999.  According to the Chinese  Statistics  Bureau, in 2002,
China  exported  approximately  US$3.43  billion  in  pharmaceutical   products,
consisting  primarily  of western  medicines,  and imported  US$2.33  billion in
western medicines.

     Due in part to the relaxation of trade barriers following China's accession
to the World Trade  Organization  ("WTO") in January 2002, we believe China will
become one of the world's  largest  pharmaceutical  markets by the middle of the
twenty-first  century.  As a result,  we believe the Chinese  market  presents a
significant  opportunity for both domestic and foreign drug manufacturers.  With
the Chinese accession to the WTO, the Chinese pharmaceutical industry is gearing
up to face the new patent  regime that is required  by WTO  regulation,  and the
Chinese  government has begun to reduce its average  tariff on  pharmaceuticals.
China has also  agreed  that  foreign  companies  will be allowed to import most
products, including pharmaceuticals, into any part of China.

     Foreign  companies  are expected to benefit  from China's WTO  accession in
four significant  areas:  First,  they will be able to acquire a larger share of
the Chinese  market.  Second,  they may be able to gain  increased  control over
their  distribution  networks and may not have to rely on the complex and costly
Chinese supply network. Third, open competition will give foreign drug companies
a better  chance of having their  products  included on China's  provincial  and
municipal lists of drugs that are subject to state  reimbursement.  Finally, the
intellectual property rights of foreign drug companies will be accorded enhanced
protection. However, given China's past performance in adhering to international
agreements,  there can be no assurance that any or all of these benefits will be
achieved.

     The  development  of the retail  drugstore  sector in China  since the most
recent  round  of  healthcare  reforms  began  in 1998  has  been  rapid.  Chain
drugstores soon followed; since the promulgation of Chain Drugstores Regulations
in  1998,  more  than  260  companies  have  been  approved  by the  State  Drug
Administration  ("SDA") as chain  drugstores.  Of the  roughly  120,000  Chinese
retail pharmacies as of December 2002, 260 were chain drugstore enterprises that


                                      -11-
<PAGE>

managed in the  aggregate  5,096 retail  outlets.  According to recent  industry
figures,  there are an average of 26 retail  drugstores for each chain;  and the
largest chain had a total of 231  interregional  retail outlets.  As of December
2002,  the  largest  retail  sales of a chain  drugstore  in China  amounted  to
RMB300.0 million, or US$36.59 million.

     United States

     In  the  United  States,  LOHAS  is  the  fastest  growing  market  in  the
nutritional  supplement  category,  and  according to research  reports from the
LOHAS Market Review,  the U.S. LOHAS market grew by approximately 1% new joiners
and 10% new  spending  per year to reach  $355  billion  in  2004.  The  Natural
Marketing  Institute for the American  Botanical  Council reports that the LOHAS
market  now  includes  more  than  14%  of  the   population  in  the  U.S.,  or
conservatively 40 million persons. The Hartman Group, a market research company,
classifies certain vitamins,  nutriceuticals and OTC pharmaceutical  products as
"wellness  products."  They report that nearly $66 billion was spent on wellness
products in 2004.  At that level of  spending,  the wellness  products  category
accounts  for  approximately  25% of the  spending  amongst  the LOHAS  consumer
category.

Government Regulation

     China

     Our principal  sales market  initially will be in the People's  Republic of
China. For certain  products we will be subject to China's (OTC)  Pharmaceutical
Administrative  Law, which governs the licensing,  manufacturing,  marketing and
distribution  of  pharmaceutical  products  in  China  and  sets  penalties  for
violations of the law. We will also be subject to China's Food  Sanitation  Law,
which provides the food sanitation standards to be followed by manufacturers and
distributors.  Our products are subject to  registration  as foods with the Food
and Drug  Administration  ("FDA")  and  their  equivalent  organizations  in all
countries.  In China, the equivalent organization is the SFDA (State Food & Drug
Administration).  We  are  currently  planning  to use a  representative  office
located in Beijing PRC to represent our commercial  activities in the PRC and to
direct  contracting  to  our US  headquarters  through  our  planned  Hong  Kong
subsidiary.  For such an  organization  arrangement  we will be  subject  to the
foreign  company  provisions  of the  Company  Law of China,  which  governs the
conduct  of   representative   offices  and  their  appointed   representatives.
Additionally,  we will also be subject in varying degrees to regulations and the
permit system administered by the Chinese government.

     United States

     The   formulation,   manufacturing,   packaging,   labeling,   advertising,
distribution  and sale of our  products  are  subject to  regulation  by federal
agencies,  including the FDA, the Federal Trade  Commission,  or FTC, the Postal
Service, the Consumer Product Safety Commission,  the Department of Agriculture,
the Environmental  Protection Agency, and also by various agencies of the states
and localities in which our products are sold. In particular,  the FDA, pursuant
to the Federal Food, Drug, and Cosmetic Act, or FDCA, regulates the formulation,
manufacturing,   packaging,   labeling,   distribution   and  sale  of   dietary
supplements, including vitamins, minerals and herbs, and of over-the-counter, or


                                      -12-
<PAGE>

OTC, drugs,  while the FTC regulates the advertising of these products,  and the
Postal Service regulates  advertising  claims with respect to such products sold
by mail order.

                                  RISK FACTORS

The  business,  financial  condition  and  operating  results of Gamma  could be
adversely affected by any of the following  factors,  in which case the value of
the equity  securities of Gamma could decline,  and investors could lose part or
all of their investment. The risks and uncertainties described below are not the
only  ones that the  Company  faces.  Additional  risks  and  uncertainties  not
presently  known  to  management,   or  that  management  currently  thinks  are
immaterial, may also impair future business operations.

RISKS RELATING TO OUR COMPANY.

Our  limited  operating  history  makes it  difficult  to  evaluate  our  future
prospects and results of operations.

     We have a limited operating  history.  We were established in 1993, for the
purpose of seeking out business  opportunities,  including acquisitions that the
Board  of  Directors,  in its  discretion,  believes  to be good  opportunities.
Pursuant to the Technology Transfer Agreement and the Employment Agreements with
New  Management  the Company is poised to begin  operations  in the field of OTC
pharmaceuticals,   vitamins,  and  supplements.  The  Company  will  be  heavily
dependent  on the  skills,  talents,  and  abilities  of its New  Management  to
successfully  implement its business  plan.  The marketing and sale of vitamins,
nutriceuticals,  OTC  pharmaceutical  and personal care products is highly risky
and speculative. The Company's current cash balance will not be adequate for the
Company to  continue  its  operations  for this  fiscal  year;  and, in order to
compete in this new business  opportunity  an  additional  cash infusion will be
required and without such additional cash infusion the Company will very rapidly
deplete its current cash  reserve.  In such event,  the Company may be forced to
cease operations and investors' shares would become worthless.

     Accordingly, you should consider our future prospects in light of the risks
and uncertainties  experienced by early stage companies in evolving markets such
as the growing market for vitamins and  nutriceuticals  in Greater China and the
United States. Some of these risks and uncertainties relate to our ability to:

          o    offer products to attract and retain a larger customer base;
          o    attract additional customers and increased spending per customer;
          o    increase awareness of our brands and continue to develop customer
               loyalty;
          o    respond to competitive market conditions;
          o    respond to changes in our regulatory environment;
          o    manage risks associated with intellectual property rights;
          o    maintain effective control of our costs and expenses;
          o    raise sufficient capital to sustain and expand our business;
          o    attract, retain and motivate qualified personnel; and


                                      -13-
<PAGE>

          o    upgrade  our  technology  to  support  additional   research  and
               development of new products.

     If we are unsuccessful in addressing any of these risks and  uncertainties,
our business may be materially and adversely affected.

We will need additional  capital to fund our operations,  and we may not be able
to  obtain  sufficient  capital  and may be  forced  to limit  the  scope of our
operations.

     The Company currently has less than $5,000 in cash. New Management plans to
raise $3,000,000 of private equity capital to begin executing its business plan,
but there can be no assurance that the Company will be able to raise such funds.
Even if we are able to raise  the  initial  $3,000,000  of  capital  to begin to
execute our business  plan,  as we continue to implement our plan to expand into
additional markets,  we will experience  increased capital needs and we will not
have enough capital to fund our future  operations  without  additional  capital
investments.  Our capital needs will depend on numerous  factors,  including (1)
our profitability;  (2) the release of competitive  products by our competition;
(3) the level of our investment in research and development;  and (4) the amount
of our capital expenditures. We cannot assure you that we will be able to obtain
capital in the future to meet our needs.

     If we cannot obtain initial or additional funding, we may be required to:

          o    limit our marketing efforts; and
          o    decrease or eliminate capital expenditures.

     Such  reductions  could  materially  adversely  affect our business and our
ability to compete.

     Even if we do find a source of initial and additional  capital,  we may not
be able to negotiate  terms and conditions for receiving the additional  capital
that are  acceptable  to us.  Any future  capital  investments  could  dilute or
otherwise materially and adversely affect the holdings or rights of our existing
shareholders.  In addition,  new equity or convertible debt securities issued by
us to obtain financing could have rights,  preferences and privileges  senior to
our common stock. We cannot give you any assurance that any additional financing
will be available to us, or if available, will be on terms favorable to us.

     We need to manage growth in operations to maximize our potential growth and
achieve our expected revenues.

     In order to maximize potential growth in our current and potential markets,
we believe that we must expand our marketing operations. To fund our anticipated
expansion,  we need an increased amount of working capital.  This expansion will
place a significant  strain on our management and our  operational,  accounting,
and information  systems. We expect that we will need to continue to improve our
financial controls, operating procedures, and management information systems. We
will also need to effectively  train,  motivate,  and manage our employees.  Our


                                      -14-
<PAGE>

failure to manage our growth could disrupt our operations and ultimately prevent
us from generating the revenues we expect.

If we are not  able to  implement  our  strategies  in  achieving  our  business
objectives,  our business operations and financial  performance may be adversely
affected.

     Our business plan is based on  circumstances  currently  prevailing and the
bases and assumptions that certain circumstances will or will not occur, as well
as  the  inherent  risks  and  uncertainties   involved  in  various  stages  of
development.  However,  there  is no  assurance  that we will be  successful  in
implementing  our strategies or that our strategies,  even if implemented,  will
lead to the  successful  achievement  of our  objectives.  If we are not able to
successfully  implement our  strategies,  our business  operations and financial
performance may be adversely affected.

We  may  have  difficulty  defending  our  intellectual   property  rights  from
infringement.

     We regard our service marks,  trademarks,  copyrights,  trade secrets,  and
similar  intellectual  property  as  critical  to our  success.  We will rely on
trademark,  copyright,  patent and trade secret law, as well as  confidentiality
and license  agreements  with our employees,  customers,  partners and others to
protect our  proprietary  rights.  We have  registered a trademark in the United
States and will seek to utilize  our US  trademark  approval  in all  markets of
interest  including  the People's  Republic of China.  No assurance can be given
that our  copyrights,  trademarks  or other  intellectual  property  will not be
challenged,  invalidated,  infringed or  circumvented,  or that our intellectual
property  rights  will  provide  competitive  advantage  to us.  There can be no
assurance that we will be able to obtain a license from a third-party technology
that we may need to conduct our business or that such technology can be licensed
at a reasonable cost.

     We intend to sell our products mainly in China, the United States and other
significant  territories in the greater China area  including Hong Kong,  Macau,
Taiwan,  (Greater  China) and South Korea.  Asia  including  Greater  China will
remain our primary market for the  foreseeable  future.  We are looking at other
markets,  but we do not have  immediate  plans to market our  products  into any
other countries or regions. Other than the United States, China and Hong Kong we
have not applied for any trademark or patent  protection in any other  countries
but  intend to do so in the near  future.  Therefore,  the  measures  we take to
protect  our  proprietary  rights may be  inadequate  and we cannot give you any
assurance that our competitors will not independently  develop  formulations and
processes that are  substantially  equivalent or superior to our own or copy our
products.

Intense  competition  from  existing and new entities may  adversely  affect our
revenues and profitability.

     We compete  with other  companies,  many of whom are  developing  or can be
expected to develop  products similar to ours. Our market is a large market with
many competitors.  Many of our competitors are more established than we are, and
have significantly greater financial,  technical,  marketing and other resources
than we presently possess. Some of our competitors have greater name recognition
and a larger  customer  base.  These  competitors  may be able to  respond  more
quickly to new or changing  opportunities  and customer  requirements and may be


                                      -15-
<PAGE>

able to undertake more extensive promotional  activities,  offer more attractive
terms to customers,  and adopt more aggressive  pricing  policies.  We intend to
brand our  products  and create  brand  awareness  for our brands so that we can
successfully compete with our competitors.  We cannot assure you that we will be
able to  compete  effectively  with  current or future  competitors  or that the
competitive pressures we face will not harm our business.

The products and the processes we use could expose us to substantial liability.

     We face an inherent  business risk of exposure to product  liability claims
in the event that the use of our  technologies  or  products  is alleged to have
resulted in adverse side  effects.  Side  effects or marketing or  manufacturing
problems  pertaining  to any of our products  could result in product  liability
claims or  adverse  publicity.  These  risks will  exist for those  products  in
clinical  development  and with  respect to those  products  that have  received
regulatory  approval for commercial  sale. We plan to carry  insurance  policies
which are  customary  for  enterprises  in our  industry.  We do not  expect any
special  restrictions  or  exceptions  attached  to  this  coverage  other  than
fraudulent or criminal conducts on part of the claimant.

We depend on our key  management  personnel and the loss of their services could
adversely affect our business.

     We will place  substantial  reliance  upon the efforts and abilities of our
executive officers, Peter Cunningham,  our Chairman and Chief Executive Officer;
Joseph  Cunningham,  our Chief Financial Officer and Hao Zhang,  Chief Marketing
Officer.  The loss of the services of any of our executive officers could have a
material adverse effect on our business,  operations,  revenues or prospects. We
do not maintain key man life  insurance  on the lives of these  individuals.  On
April 7, 2006, we entered into employment  agreements with each of our three key
executive officers.

We may never pay any dividends to our shareholders.

     Our board of directors does not intend to distribute  dividends in the near
future. The declaration, payment and amount of any future dividends will be made
at the discretion of the board of directors,  and will depend upon,  among other
things,  the  results of our  operations,  cash flows and  financial  condition,
operating and capital requirements,  and other factors as the board of directors
considers  relevant.  There is no assurance that future  dividends will be paid,
and if dividends are paid,  there is no assurance  with respect to the amount of
any such dividend.

Our future  success  will depend on our ability to  anticipate  and respond in a
timely manner to changing consumer demands.

     Our future success will depend on our products'  appeal to a broad range of
consumers whose  preferences  cannot be predicted with certainty and are subject
to change. If our products do not meet consumer demands,  our sales may decline.
In addition, our growth depends upon our ability to develop new products through
product line extensions and product modifications, which involve numerous risks.
We may not be able to accurately identify consumer preferences and translate our
knowledge  into  customer-accepted  products  or  successfully  integrate  these


                                      -16-
<PAGE>

products  with  our  existing  product  platform  or  operations.  We  may  also
experience  increased expenses incurred in connection with product  development,
marketing and advertising  that are not  subsequently  supported by a sufficient
level of sales, which would negatively affect our margins. Furthermore,  product
development  may divert  management's  attention from other  business  concerns,
which could cause sales of our existing products to suffer. We cannot assure you
that  newly  developed  products  will  contribute  favorably  to our  operating
results.

If the Company's  products fail to perform  properly,  its business could suffer
with increased costs and reduced income.

     The Company's products may fail to meet consumer  expectations.  Failure of
our products to meet expectations could:

          o    damage its reputation;
          o    decrease sales;
          o    incur costs related to returns;
          o    delay market acceptance of its products;
          o    result in unpaid accounts receivable; and
          o    divert its resources to reformulation or alternative products.

If we fail to develop and maintain an effective system of internal controls,  we
may not be able to accurately  report our financial results or prevent fraud; as
a result,  current  and  potential  shareholders  could lose  confidence  in our
financial  reports,  which could harm our business and the trading  price of our
common stock.

     Effective  internal  controls  are  necessary  for us to provide  financial
reports and effectively prevent fraud.  Section 404 of the Sarbanes-Oxley Act of
2002 requires us to evaluate and report on our internal  controls over financial
reporting and have our independent  registered  public  accounting firm annually
attest to our  evaluation,  as well as issue their own  opinion on our  internal
controls  over  financial  reporting,  beginning  with our Annual Report on Form
10-KSB  for the  fiscal  year  ended  March 31,  2007.  We plan to  prepare  for
compliance with Section 404 by  strengthening,  assessing and testing our system
of  internal  controls  to  provide  the basis for our  report.  The  process of
strengthening  our internal controls and complying with Section 404 is expensive
and time consuming,  and requires significant  management attention,  especially
given  that  we  have  not  yet  undertaken  any  efforts  to  comply  with  the
requirements  of Section  404.  We cannot be certain  that the  measures we will
undertake will ensure that we will maintain adequate controls over our financial
processes  and reporting in the future.  Furthermore,  if we are able to rapidly
grow our  business,  the  internal  controls  that we will need will become more
complex,  and  significantly  more  resources  will be  required  to ensure  our
internal controls remain effective.  Failure to implement required controls,  or
difficulties  encountered  in their  implementation,  could  harm our  operating
results  or  cause us to fail to meet our  reporting  obligations.  If we or our
auditors discover a material weakness in our internal  controls,  the disclosure
of  that  fact,  even  if the  weakness  is  quickly  remedied,  could  diminish
investors'  confidence in our financial  statements and harm our stock price. In
addition,  non-compliance  with  Section  404 could  subject  us to a variety of
administrative sanctions, including the suspension of trading, ineligibility for
listing on one of the Nasdaq Stock Markets or national securities exchanges, and


                                      -17-
<PAGE>

the inability of registered broker-dealers to make a market in our common stock,
which would further reduce our stock price.

RISKS RELATING TO THE PEOPLE'S REPUBLIC OF CHINA

There could be changes in  government  regulations  towards the  pharmaceutical,
health supplement and food industries that may adversely affect our business.

     The  import,  manufacture  and  sale of  food  products,  supplements,  and
personal care products in the PRC is heavily regulated by many state, provincial
and local authorities.  These regulations  significantly increase the difficulty
and costs  involved  in  obtaining  and  maintaining  regulatory  approvals  for
marketing new and existing  products.  Our future growth and profitability  will
depend to a large extent on our ability to obtain regulatory approvals.

     The State Food and Drug  Administration  of China recently  implemented new
guidelines for licensing of food and  supplement  products.  All  manufacturers,
importers and marketers are subject to business license approval and achievement
of quality standards for consumer protection as outlined in the regulations.

     Moreover,  the laws and regulations regarding  acquisitions of any of food,
personal  care,  supplement  or  pharmaceutical  industries  in the PRC may also
change and may significantly impact our ability to grow through acquisitions.

There are risks associated with the Chinese economy that is in transition from a
command economy to a market economy.

     A  substantial  amount of our business will be located in the PRC, and much
of our revenue will likely be sourced from the PRC. Accordingly,  our results of
operations  and  financial  position  are  subject  to a  significant  degree to
economic,  political and legal  developments in the PRC, including the following
risks:

Economic, political and social conditions and government policies in China could
have a material adverse effect on our business,  financial condition and results
of operations.

     The economy of China differs from the economies of most developed countries
in many respects, including, but not limited to:

          o    structure                     o    capital re-investment
          o    government involvement        o    allocation of resources
          o    level of development          o    control of foreign exchange
          o    growth rate                   o    rate of inflation

     The  economy of China has been  transitioning  from a planned  economy to a
more  market-oriented  economy.  Although in recent years the PRC government has
implemented  measures  emphasizing the utilization of market forces for economic
reform,  a substantial  portion of productive  assets in China is still owned by
the  PRC  government.  In  addition,  the  PRC  government  continues  to play a
significant role in regulating  industries by imposing industrial  policies.  It


                                      -18-
<PAGE>

also  exercises   significant  control  over  Chinese  economic  growth  through
allocation of  resources,  controlling  payment of foreign  currency-denominated
obligations,  setting  monetary policy and providing  preferential  treatment to
particular industries or companies.

     Policies and other  measures  taken by the PRC  government  to regulate the
economy  could have a  significant  negative  impact on economic  conditions  in
China,  with a resulting  negative  impact on our  business.  For  example,  our
financial  condition and results of operations  may be materially  and adversely
affected by:

          o    new laws and regulations and the interpretation of those laws and
               regulations;
          o    the  introduction  of measures to control  inflation or stimulate
               growth;
          o    changes in the rate or method of taxation;
          o    the imposition of additional  restrictions on currency conversion
               and remittances abroad; or
          o    any actions which limit our ability to develop,  produce,  import
               or sell our  products  in China,  or to finance  and  operate our
               business in China.

Further  movements in exchange  rates may have a material  adverse effect on our
financial condition and results of operations.

     We expect  that the  majority  of our China  sales will be  denominated  in
Renminbi and our export sales will be denominated  primarily in U.S. dollars. In
addition,  we  expect to incur a  portion  of our cost of sales in  Euros,  U.S.
dollars,  Australian  Dollars and Canadian Dollars in the course of our purchase
of imported production  equipment and raw materials.  Since 1994, the conversion
of the  Renminbi  into  foreign  currencies  has been  based on rates set by the
People's Bank of China, and the exchange rate for the conversion of the Renminbi
to U.S. dollars had generally been stable. However, starting from July 21, 2005,
the PRC government moved the Renminbi to a managed floating exchange rate regime
based on market supply and demand with reference to a basket of currencies. As a
result,  the  Renminbi  is no longer  directly  pegged to the U.S.  dollar.  The
exchange  rate of the  U.S.  dollar  against  the  Renminbi  was  adjusted  from
approximately  RMB8.28  per U.S.  dollar on July 20,  2005 to  RMB8.11  per U.S.
dollar on July 21, 2005. The exchange rate may become volatile, the Renminbi may
be revalued  further against the U.S. dollar or other currencies or the Renminbi
may be permitted to enter into a full or limited free float, which may result in
an appreciation  or  depreciation in the value of the Renminbi  against the U.S.
dollar or other currencies, any of which could have a material adverse effect on
our financial condition and results of operations.

Governmental  control  of  currency  conversion  may  affect  the  value of your
investment.

     The PRC government  imposes controls on the convertibility of Renminbi into
foreign  currencies and, in certain cases, the remittance of currency outside of
China. We expect to receive the majority of our revenues in Renminbi.  Shortages
in the  availability  of foreign  currency  may  restrict  our  ability to remit
sufficient  foreign  currency  to pay  dividends  or other  payments  to us,  or
otherwise satisfy its foreign currency denominated  obligations.  Under existing
PRC foreign exchange regulations,  payments of current account items,  including
profit  distributions,  interest  payments and expenditures  from  trade-related
transactions,  can be made in foreign currencies without prior approval from the
PRC  State   Administration  of  Foreign  Exchange  by  complying  with  certain


                                      -19-
<PAGE>

procedural   requirements.   However,   approval  from  appropriate   government
authorities is required in those cases in which Renminbi is to be converted into
foreign currency and remitted out of China to pay capital expenses,  such as the
repayment of bank loans  denominated in foreign  currencies.  The PRC government
may also at is discretion  restrict  access in the future to foreign  currencies
for  current  account  transactions.  If the  foreign  exchange  control  system
prevents us from obtaining  sufficient  foreign currency to satisfy our currency
demands,  we may not be able  to pay  dividends  in  foreign  currencies  to our
shareholders.

We will be subject to restrictions on making payments from China.

     We are incorporated in the State of Delaware and at present do not have any
assets or  conduct  any  business  operations,  but our plan is for our  initial
business  to be  conducted  in China.  As a result,  we will rely on payments or
dividends from our China cash flow to fund our corporate overhead and regulatory
obligations.  The PRC  government  also imposes  controls on the  conversion  of
Renminibi into foreign currencies and the remittance of currencies out of China.
We may  experience  difficulties  in completing  the  administrative  procedures
necessary to obtain and remit foreign currency.  If we are unable to receive all
of  the  revenues  from  our   operations   through   contractual   or  dividend
arrangements, we may be unable to pay dividends on our shares of common stock.

Uncertainties with respect to the PRC legal system could adversely affect us.

     We will conduct our business in China  primarily  through a  representative
office in the PRC. A representative office in China is limited in its commercial
activities.  We will use our  representative  office  for  marketing  and  sales
administration  for sales  conducted  between  China and our  parent  company or
designate. Our operations in China will be governed by PRC laws and regulations.
We  are  generally  subject  to  laws  and  regulations  applicable  to  foreign
investments in China. The PRC legal system is based on written  statutes.  Prior
court decisions may be cited for reference but have limited precedential value.

     Since 1979, PRC legislation and regulations have significantly enhanced the
protections afforded to various forms of foreign investments in China.  However,
China has not  developed a  fully-integrated  legal system and  recently-enacted
laws  and  regulations  may not  sufficiently  cover  all  aspects  of  economic
activities  in China.  In  particular,  because these laws and  regulations  are
relatively  new, and because of the limited  volume of published  decisions  and
their nonbinding  nature,  the  interpretation and enforcement of these laws and
regulations involve uncertainties. In addition, the PRC legal system is based in
part on government  policies and internal rules (some of which are not published
on a timely basis or at all) that may have a retroactive effect. As a result, we
may not be aware of our  violation  of these  policies and rules until some time
after the violation.  In addition, any litigation in China may be protracted and
result in substantial costs and diversion of resources and management attention.





                                      -20-
<PAGE>

It may be  difficult to effect  service of process  upon us or our  directors or
senior management who live in the PRC or to enforce any judgments  obtained from
non-PRC courts.

     Initially, the majority of our operations will be conducted within the PRC.
In addition,  one of our Directors and executive  officers resides in China. You
may  experience  difficulties  in  effecting  service  of  process  upon us, our
Director  or our senior  management  as it may not be  possible  to effect  such
service of process inside China. In addition, we are advised that China does not
have  treaties  with the United  States and many other  countries  providing for
reciprocal   recognition   and  enforcement  of  court   judgments.   Therefore,
recognition  and  enforcement  in China of  judgments  of a court in the  United
States or certain other jurisdictions may be difficult or impossible.

RISKS RELATING TO OUR STOCK

An active trading market for our common stock may not develop or be sustained.

     There can be no assurance as to when and if the shares of common stock will
become quoted on any stock  exchange and, even if the shares of common stock are
quoted, there can be no assurance that an active trading market will develop for
such shares.  If an active public  trading  market does not develop or continue,
investors  have limited  liquidity and may be forced to hold their shares of our
common stock for an indefinite period of time. Further, the prices and volume of
trading  in  the  Company's  common  stock  may  be  adversely  affected  if its
securities are not listed or quoted.

Our Certificate of incorporation  authorizes the issuance of shares of preferred
stock, the rights, preferences, designations and limitations of which may be set
by the board of directors.

     Our certificate of incorporation  has authorized  issuance of up to 500,000
shares of preferred stock ("Preferred  Stock") in the discretion of its board of
directors. Any undesignated shares of Preferred Stock may be issued by our board
of directors;  no further shareholder action is required. If issued, the rights,
preferences,  designations  and limitations of such Preferred Stock would be set
by  the  board  of  directors  and  could  operate  to the  disadvantage  of the
outstanding common stock. Such terms could include, among others, preferences as
to  dividends  and  distributions  on  liquidation,  or could be used to prevent
possible corporate takeovers.

We cannot guaranty the existence of an established public trading market.

     We plan to make an application  for a common stock ticker symbol on the OTC
Bulletin  Board,  but a regular  trading  market for our  securities  may not be
sustained in the future. The National Association of Securities Dealers ("NASD")
has enacted  recent  changes that limit  quotations on the OTC Bulletin Board to
securities  of  issuers  that  are  current  in  their  reports  filed  with the
Securities and Exchange Commission. We cannot determine the effect of these rule
changes and other  proposed  changes on the OTC Bulletin Board at this time. The
OTC Bulletin  Board is an  inter-dealer,  over-the-counter  market that provides
significantly  less liquidity than the NASD's  automated  quotation  system (the


                                      -21-
<PAGE>

"NASDAQ Stock Market"). Quotes for stocks included on the OTC Bulletin Board are
not listed in the  financial  sections of newspapers as are those for the NASDAQ
Stock Market. Therefore, prices for securities traded solely on the OTC Bulletin
Board may be  difficult  to obtain and holders of common  stock may be unable to
resell  their  securities  at or near their  original  offering  price or at any
price.  Market  prices for our common  stock will be  influenced  by a number of
factors, including:

          o    the  issuance  of new  equity  securities  pursuant  to a  future
               offering;
          o    changes in interest rates;
          o    competitive developments,  including announcements by competitors
               of  new  products  or  services  or   significant   contracts  or
               acquisitions,
          o    strategic partnerships, joint ventures or capital commitments;
          o    variations in quarterly operating results;
          o    change in financial estimates by securities analysts;
          o    the depth and liquidity of the market for our common stock;
          o    investor  perceptions of our company and the OTC  pharmaceutical,
               nutritional  supplement and personal care  industries  generally;
               and
          o    general economic and other national conditions.

     There may be short selling  activities in the market where our common stock
is quoted. Short-selling is market selling position not backed by any possession
of the subject  shares.  Often such short sales are  conducted  by  speculators.
Short-selling may further depress our common stock price.

Broker-dealer requirements may affect the trading and liquidity of shares of our
common stock.

     Section 15(g) of the Securities Exchange Act of 1934, as amended,  and Rule
15g-2 promulgated  thereunder by the SEC require broker-dealers dealing in penny
stocks to provide  potential  investors with a document  disclosing the risks of
penny stocks and to obtain a manually  signed and dated  written  receipt of the
document  before  effecting any  transaction in a penny stock for the investor's
account.

     Potential  investors  in our common stock are urged to obtain and read such
disclosure  carefully before  purchasing any shares that are deemed to be "penny
stocks." Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve
the account of any investor for  transactions  in such stocks before selling any
penny stock to that investor.  This procedure  requires the broker-dealer to (i)
obtain from the investor information  concerning his or her financial situation,
investment  experience and investment  objectives;  (ii)  reasonably  determine,
based on that  information,  that  transactions in penny stocks are suitable for
the investor and that the investor has sufficient knowledge and experience as to
be reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written  statement  setting forth the basis on which
the  broker-dealer  made the  determination  in (ii) above;  and (iv)  receive a
signed and dated copy of such  statement from the investor,  confirming  that it
accurately reflects the investor's  financial situation,  investment  experience


                                      -22-
<PAGE>

and investment  objectives.  Compliance with these requirements may make it more
difficult  for  holders  of our  common  stock to resell  their  shares to third
parties or to otherwise dispose of them in the market.

The sale of material  amounts of our common  stock could reduce the price of our
common stock and encourage short sales.

     Sales of significant  amounts of shares held by our directors and executive
officers,  or the prospect of these  sales,  could  adversely  affect the market
price of our common stock. See "Security  Ownership of Certain Beneficial Owners
and  Management"  for  information  about the  ownership  of common stock by our
current executive officers, directors and principal shareholders.

Existing shareholders may experience some dilution.

     There is no current trading of our common stock, and we have no outstanding
warrants.  If we raise  additional  funds  through the issuance of new equity or
equity-linked  securities,  other  than  on a pro  rata  basis  to our  existing
shareholders,  the  percentage  ownership  of the existing  shareholders  may be
reduced.  Existing  shareholders may experience  subsequent dilution and/or such
newly issued  securities may have rights,  preferences and privileges  senior to
those of the existing shareholders.

Our  principal  shareholders,  current  executive  officers and  directors own a
significant  percentage of our company and will be able to exercise  significant
influence over our company.

     Our  principal  shareholders,  current  executive  officers  and  directors
together beneficially own over 90% of our common stock.  Accordingly,  if acting
together,  these  shareholders  will be able to determine the composition of our
board of  directors,  will  retain the  effective  voting  power to approve  all
matters  requiring  shareholder  approval,  will  prevail in  matters  requiring
shareholder  approval,  including,  in  particular  the  election and removal of
directors, and will continue to have significant influence over our business. As
a result of their ownership and positions,  our directors and executive officers
collectively  are able to influence all matters  requiring  shareholder  action,
including approval of significant corporate transactions.  In addition, sales of
significant amounts of shares held by our directors and executive  officers,  or
the  prospect of these  sales,  could  adversely  affect the market price of our
common  stock.  See  "Security   Ownership  of  Certain  Beneficial  Owners  and
Management" for  information  about the ownership of common stock by our current
executive officers, directors and principal shareholders.

Item 2.   DESCRIPTION OF PROPERTY

     In connection with the  consummation of the Technology  Transfer  Agreement
and the Employment Agreements,  the address of the Company's principal executive
office was changed to 2225  Angelfire  Street,  Las Vegas,  Nevada  89128.  Such
office  comprises  approximately  300 square feet.  The Company pays no rent for
this headquarters space, which is in good condition.  This office space is owned
by the Company's new Chief  Executive  Officer and Chairman of the Board,  Peter
Cunningham. The Company plans to move to new, larger space, as merited.


                                      -23-
<PAGE>

Item 3.   LEGAL PROCEEDINGS

     We are currently not involved in any litigation  that we believe could have
a materially adverse effect on our financial condition or results of operations.
There is no action, suit, proceeding,  inquiry or investigation before or by any
court,  public board,  government agency,  self-regulatory  organization or body
pending or, to the knowledge of the executive  officers of our Company or any of
our subsidiaries, threatened against or affecting our Company, our common stock,
or our Company's  officers or directors in their capacities as such, in which an
adverse decision could have a material adverse effect.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Effective  April 4, 2006 we amended our  Certificate of  Incorporation,  to
increase our  authorized  shares of common stock from 200,000 to 20,000,000  and
its authorized  shares of preferred  stock from 50,000 shares to 500,000 shares.
This  amendment  was  accomplished   through  a  shareholder  meeting  in  which
approximately  70% of the  outstanding  shares  were  present  and voted for the
amendment.  Effective  April 25, 2006,  we further  amended our  Certificate  of
Incorporation  to reduce the par value of our common  and  preferred  stock from
$1.00 to $.001 per share.  Such  amendment  was  necessary  to issue the 476,100
shares to the Assignors  under the Technology  Transfer  Agreement,  and further
anticipated  the planned 18 for 1 stock  dividend.  In addition,  we amended our
Certificate of Incorporation to change our name from Emerging Gamma  Corporation
to Sunburst  Pharmaceuticals,  Inc.,  and then on July 14, 2006 changed our name
once again to Gamma Pharmaceuticals, Inc. These latter three (3) amendments were
made  pursuant  to  written  consent of the New  Management,  who own 90% of the
outstanding shares of the Company.

                                     PART II

Item 5.   MARKET  FOR  COMMON  EQUITY,  RELATED  STOCKHOLDER  MATTERS  AND SMALL
          BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

     The Company's Common Stock has not traded.  As of June 30, 2006, there were
approximately  303 stockholders of record.  No dividends have been paid and none
are expected to be paid in the foreseeable future.

Item 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

     The following discussion covers operations of the Company through March 31,
2006,  the end of the  Company's  most  recent  fiscal  year  and  prior  to the
execution of the  Technology  Transfer  Agreement  and issuance of shares to New
Management.


                                      -24-
<PAGE>

Selected Financial Information

     The following  sets forth  selected  financial  information as of March 31,
2002,  2003,  2004,  2005 and 2006 is qualified in its entirety by the financial
statements  appearing elsewhere in this report. The Company's fiscal year end is
March 31st.

Balance Sheet Data

                      March 31   March 31   March 31   March 31   March 31
                        2002       2003       2004       2005       2006
-------------------   --------   --------   --------   --------   --------
Cash...............   $293,643   $274,024   $208,124   $115,742   $ 61,215
Total Assets.......    293,643    275,084    208,548    122,426     61,215
Total Liabilities..      1,500      5,395      4,431      2,046     20,705
Shareholders Equity    292,143    269,689    204,117    120,380     40,510


     The  Company was formed in 1993 and,  through  March 31,  2006,  engaged in
efforts intended to identify possible merger or acquisition  "targets" and other
organizational  matters.  The Company  earned $ 2,539 in interest  income during
2006 and $1,566 in 2005.  The  increase  in  interest  income in 2006 was due to
higher interest rates.

     The Company's  primary  activity in 2006 and 2005 was the active pursuit of
business  opportunities  for possible merger or acquisition.  Costs and expenses
for the  years  ended  March  31,  2006  and  2005  were  $82,409  and  $85,303,
respectively. The Company's costs and expenses consist primarily of fees paid to
the  Company's  management,  legal  and  travel  expenses  related  to  pursuing
potential business acquisitions and office rent.

     A summary of the cost and expenses for 2005 and 2006 are as follows:

                                                2006      2005
                                              -------   -------
          Consulting fees - management        $22,500   $45,000
          Legal expense                        31,019    17,071
          Travel expense                        3,291    10,584
          Accounting and audit expense          4,195     3,379
          Office rent and expense              18,986     6,621
          Transfer agent fees                   1,908     1,800
          Other expenses                          510       848
                                              -------   -------

          Total costs and expenses            $82,409   $85,303
                                              =======   =======

     The decrease in expenses in 2006 is primarily due to  consulting  fees that
totaled  $22,500 in 2006  compared to $45,000 in 2005 as a result of a narrowing
of activity in pursuing business opportunities. Also in 2006, the Company rented
office  space in Austin  effective  January  1, 2005;  rent  expense in 2006 was
$12,745.  The Company engaged two directors to serve as Chief Executive  Officer


                                      -25-
<PAGE>

and as Chief  Financial  Officer  at the  rate of  $3,000  and  $750 per  month,
respectively.  In fiscal  years 2005 and 2006,  the total  amounts  paid the two
directors were $45,000 and $22,500, respectively.

     In fiscal  2006,  the  Company  devoted  significant  time and expense to a
potential  business  opportunity with a group that owned a suite of intellectual
property for vitamins and nutriceuticals aimed primary at Chinese consumers. The
net  result of our  efforts  was the  signing  of a Letter of Intent on March 7,
2006,  to  acquire  the  intellectual  property  and to employ  three  principal
officers in our Company.

     The Company  recognized  net losses of $79,870 in 2006 and $83,737 in 2005.
The  Company  expects to incur  additional  losses,  at least for the near term,
until such time that its newly acquired  business is operational and profitable.
The  Company's  cash  position has been reduced by the past three year's  losses
from  $274,000  as of March  31,  2003 to  $61,215  as of March  31,  2006.  The
Company's  cash  balance of $61,215 as of March 31, 2006 will not be adequate to
enable the  Company to continue  its  operations  for the next year.  Without an
infusion  of capital  the  Company  will  deplete its cash which will effect our
ability to find a successful commercial opportunities or a business combination.

     The Company had a lease commitment for the office in Austin, Texas, through
December 31, 2005.  The rent for the nine months  through  December 31, 2005 was
approximately  $12,745.  This lease has since  expired and the Company has moved
offices  to 2225  Angelfire  Street,  Las  Vegas,  NV  89128,  where  no rent is
currently required.

Liquidity and Capital Resources

     As of the date of this Annual  Report on Form 10-KSB,  the Company has less
than $5,000 in available cash. Accordingly,  without a cash infusion the Company
will be unable  to meet its  liquidity  requirements  for the next  twelve  (12)
months.  New  Management  will seek an  initial  investment  by way of a private
placement of up to $3,000,000 of its common stock. New Management plans to raise
this private  capital in the United States,  Europe and Asia. New Management has
held initial discussions with investment banks in the United States to represent
the  Company,  but there can be no  assurance  that such  investment  banks will
represent the Company or will be successful in raising the necessary funds.

     Pursuant to the Letter Agreement, if New Management does not raise at least
$3,000,000  in funding for the Company  within eight (8) months of the effective
date of the Technology Transfer Agreement, then Allen Campbell, the former Chief
Executive  Officer  of the  Company  or any  other  person  duly  acting  as the
representative  of the Company's  existing  shareholders  prior to the effective
date of the Technology Transfer Agreement, may elect to terminate the Technology
Transfer Agreement.  In such event, the Assignors will return to the Company the
shares that have been issued to the  Assignors  (adjusted  for stock  splits and
dividends)  and the  Company  will  return  to the  Assignors  all  intellectual
property transferred pursuant to the Technology Transfer Agreement. In addition,
the  Employment  Agreements  with  New  Management  will be  terminated  without
severance  pay. In such event,  the  Company  would  probably be forced to cease
operations and investors' shares would become worthless.


                                      -26-
<PAGE>

Expenses

     The Company expects to incur  additional  losses in the foreseeable  future
and at least until such time as it  commences  production  of its  products  and
successfully  launches its  marketing  and public  relations  campaigns  for its
products.  Accordingly,  there is no historical  financial or other  information
about Gamma that can be used to extrapolate its future performance.

     During the next twelve  (12)  months,  the  Company  plans to seek to raise
additional capital to pay operating expenses. Pending these fundraising efforts,
New Management  intends to fund Company  operations  through personal loans. New
Management  will  accrue but not pay  management  salaries  until new capital is
raised.

     In December 2004, the Financial  Accounting Standards Board ("FASB") issued
SFAS No. 123R,  "Share-Based  Payment,"  This standard  requires that  companies
measure and record the fair value of their stock  based  compensation  awards at
fair  value on the date  they are  granted  to  employees.  This  fair  value is
determined  based on a  variety  of  assumptions,  including  volatility  rates,
forfeiture  rates and the option  pricing  model used  (e/g.  binomial  or Black
Scholes).  These  assumptions  could  significantly  differ from those currently
utilized.  This standard is effective for the first interim  period of the first
fiscal  year  beginning  after  December  15,  2005 (the  Company's  fiscal year
beginning  April 1, 2006),  at which time companies can select whether they will
apply  the  standard  retroactively  by  restating  their  historical  financial
statements or prospectively  for new stock-based  compensation  arrangements and
the unvested portion of existing arrangements.

     In May 2005,  the FASB issued SFAS No. 154,  "Accounting  Changes and Error
Corrections  - a  Replacement  of APB Opinion No. 20 and FASB  Statement No. 3."
SFAS No.  154  requires  retrospective  application  to prior  period  financial
statements of changes in accounting  principle,  unless it is  impracticable  to
determine  either the  period-specific  effects or the cumulative  effect of the
change. SFAS No. 154 also redefines  "restatement" as the revising of previously
issued  financial  statements  to  reflect  the  correction  of an  error.  This
statement is effective for accounting  changes and corrections of errors made in
fiscal years beginning after December 15, 2005.

Item 7.   FINANCIAL STATEMENTS

     The financial  statements of the Company  required to be included in Item 7
are set forth in the Financial Statements Index.

Item  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

     None.


                                      -27-
<PAGE>

ITEM 8A.  CONTROLS AND PROCEDURES

     (a)  Evaluation  of  disclosure   controls  and  procedures.   We  maintain
disclosure controls and procedures designed to provide reasonable assurance that
information  required  to be  disclosed  in the  reports we file with the SEC is
recorded,  processed,  summarized and reported within the time periods specified
in the rules of the SEC. Within 90 days prior to the filing of the Annual Report
on Form 10-KSB,  we carried out an  evaluation,  under the  supervision  and the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer,  of the design and operation of these disclosure controls and
procedures pursuant to the Exchange Act Rule 13a-14. Based upon that evaluation,
our Chief  Executive  Officer and 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 our
periodic SEC filings.

     (b)  Changes in internal  controls.  There were no  significant  changes in
internal  control over financial  reporting  during our most recently  completed
fiscal year that has materially affected,  or is reasonably likely to materially
affect, our internal control over financial reporting.

ITEM 8B.  OTHER INFORMATION

     None.


                                    PART III

Item 9.   DIRECTORS,   EXECUTIVE   OFFICERS,   PROMOTERS  AND  CONTROL  PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Directors and Executive Officers as of March 31, 2006

     Directors are elected to serve until the annual meeting of shareholders and
until their  successors  have been  elected  and have  qualified.  Officers  are
appointed to serve,  subject to the discretion of the Board of Directors,  until
the meeting of the Board following the annual meeting of shareholders  and until
their successors have been elected and have qualified.  The following  directors
and officers held their  positions from the change in management on November 26,
2002,  with the  exception of Mr.  Jarrell,  who was elected in 1994,  until the
management change described above on April 7, 2006.

Name                           Age       Office with the Company
----                           ---       -----------------------

Allen F. Campbell              62        Chairman, President and Chief Executive
                                         Officer and Director

Dermot S. L. Butler            64        Director


                                      -28-
<PAGE>

Laurence M. Cottingham         72        Director

Jerry W. Jarrell               63        Chief Financial Officer, Secretary
                                         and Director

Current Officers and Directors

     In  connection  with  the  Technology  Transfer  Agreement  and the  Letter
Agreement,  the following  four (4) current  directors of Gamma  resigned  their
positions:  Allen  Campbell,  Jerry  Jarrell,  Lawrence  Cottingham,  and Dermot
Butler.  The  number of Board  members  was set at three  (3) and the  following
persons were elected by the outgoing  Directors to fill those positions:  Joseph
Cunningham, Peter Cunningham, and Hao Zhang.

     Also in connection  with the Technology  Transfer  Agreement and the Letter
Agreement,  the  following  persons  resigned as officers of the Company:  Allen
Campbell,  as  President  and  Chief  Executive  Officer  and Jerry  Jarrell  as
Secretary and Chief Financial Officer. The newly elected officers of the Company
are as follows: Peter Cunningham,  Chairman and Chief Executive Officer;  Joseph
Cunningham,  Chief  Financial  Officer  and  Secretary;  and  Hao  Zhang,  Chief
Marketing Officer.

     The new officers and directors assumed their positions as of April 7, 2006.

The following are our Company's current Officers and Directors:

   ------------------------------------- ------------------------------ -------
   Name                                  Title                          Age
   ------------------------------------- ------------------------------ -------
   Peter Cunningham                      Chief Executive Officer        51
   ------------------------------------- ------------------------------ -------
   Joseph Cunningham                     Chief Financial Officer        44
   ------------------------------------- ------------------------------ -------
   Hao Zhang                             Chief Marketing Officer        31
   ------------------------------------- ------------------------------ -------

     The following sets forth certain information with respect to each executive
officer and director of the Company.  In the coming  months we intend to add key
employees and to expand the number on our Board of Directors.

     Mr. Peter  Cunningham,  Chairman  and Chief  Executive  Officer.  Mr. Peter
Cunningham is a Senior Executive with extensive  experience in the international
pharmaceutical industry. Mr. Cunningham has worked for approximately 10 years in
the  pharmaceutical  industry  and an  additional  10  years  consulting  to the
pharmaceutical   industry,  with  some  of  the  best  known  companies  in  the
pharmaceutical  industry,  including  Glaxo Smith Kline,  Bristol  Myers Squibb,
Baxter,  Becton  Dickinson,  Novartis  & Roche,  and  most  recently,  AXM.  Mr.
Cunningham's consulting practice was established as a joint venture with Coopers
& Lybrand  (PriceWaterhouse  Coopers).  Products Mr.  Cunningham  has  launched,
developed  or  marketed  worldwide  generate  more than US$ 800 million in sales
annually.  Mr. Peter Cunningham has an MBA from George Washington University and
an undergraduate  degree in Sociology from the State University of New York. Mr.
Peter Cunningham is the brother of Joseph  Cunningham,  a Director and our Chief
Financial Officer.


                                      -29-
<PAGE>

     Mr. Joseph  Cunningham,  Director and Chief Financial  Officer.  Mr. Joseph
Cunningham is an expert in financial  management,  corporate  control,  banking,
fund raising,  strategic  planning and business  start-up.  Mr.  Cunningham is a
trained economist and former think-tank  practitioner.  He is also an Investment
Banker and has  originated  and  executed  more than US$ 5.0 billion in deals in
Asia,  from his  former  offices  in  Singapore  and  London.  His  most  recent
experience  is with  Amaroq  Capital  LLC,  a  merchant  bank  focused  on Asian
Healthcare. Mr. Cunningham has an international MBA from Thunderbird, the Garvin
School of International Management,  and an undergraduate degree in Economic and
Business Administration from Northeastern University, Boston Massachusetts.  Mr.
Joseph Cunningham is the brother of Peter Cunningham, our Chairman and our Chief
Executive Officer.

     Mr. Hao Zhang,  Director,  Chief Marketing  Officer.  Mr. Zhang is a senior
executive  with  significant  experience and success in the  pharmaceutical  and
personal care products  industries.  Mr. Zhang has worked for  approximately  10
years  in  consulting,  with  some of the  best-known  companies  in the  World,
including Pfizer,  Roche, Johnson & Johnson, GE, GSK, and Bayer. The products he
worked on generate  approximately US$ 200 million/in sales annually in China. In
2004, the Ogilvy Group  acquired his consulting  firm in Beijing ZZAD. Mr. Zhang
has a PHD in electrical engineering from the University of British Columbia.

Indemnification

     Section  145 of the  Delaware  General  Corporation  Law  provides  for the
indemnification of officers,  directors and other corporate agents under certain
circumstances for liabilities  (including  reimbursement for expenses incurred).
Article  5 of  the  Registrant's  Bylaws  provides  for  indemnification  of the
Company's  directors,  officers,  employees  and other  agents to the extent and
under the circumstances  permitted by the Delaware General  Corporation Law. The
Company also plans to obtain  director's  and officer's  liability  insurance if
such is available at reasonable prices, but has not done so to date.

     The extent to which the indemnification  provisions of the Delaware General
Corporation  Law and the  Company's  certificate  of  incorporation  and  bylaws
provide  indemnification to officers and directors for violations of the federal
securities laws has not been settled by court precedent. The Company understands
that,  in  the  position  of  the  Securities  and  Exchange  Commission,   such
indemnification is against public policy and is unenforceable.

Board Committees and Meetings

Audit Committee

     For the fiscal year ended March 31, 2006, our audit committee  consisted of
Lawrence  M.  Cottingham,  Dermot S. L. Butler and Jerry W.  Jarrell.  The audit
committee  makes  recommendations  to  the  board  of  directors  regarding  the
selection of  independent  auditors,  reviews the results and scope of the audit
and other  services  provided by our  independent  auditors  and  evaluates  our
internal accounting procedures.  The audit committee held one meeting during the


                                      -30-
<PAGE>

fiscal year ended March 31,  2006.  The new audit  committee  for fiscal 2007 is
comprised of Peter Cunningham and Joseph Cunningham.

Compensation Committee

     For the fiscal  year  ended  March 31,  2006,  our  compensation  committee
consisted of Dermot S. L. Butler,  Lawrence M.  Cottingham and Jerry W. Jarrell.
The compensation  committee  reviews and approves  compensation and benefits for
our  executive  officers.   The  compensation  committee  also  administers  our
compensation and stock plans and makes recommendations to the board of directors
regarding such matters.  The compensation  committee held one meeting during the
fiscal year ended March 31, 2006. The new compensation committee for fiscal year
2007 is comprised of Peter Cunningham and Joseph  Cunningham.  Joseph Cunningham
meets the SEC's definition of a "financial expert".

Director Meetings

     Directors  are paid $500 should they travel out of town to attend a meeting
and are reimbursed for customary and reasonable  expenses  incurred in attending
board of directors and committee  meetings.  Generally our director meetings are
held  telephonically  and do not  require  out of  town  travel  to  attend  the
meetings.

                COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     Section 16(a) of the Exchange Act requires the Company's executive officers
and directors,  and persons who own more than ten percent of a registered  class
of the Company's equity securities,  to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission (SEC).
The Company is required to  disclose  whether it has  knowledge  that any person
required to file such a report may have failed to do so in a timely manner.  The
Company  believes  that during  fiscal year 2005,  all  officers,  directors and
persons  owning  more than 10  percent  of  equity  securities  subject  to such
reporting obligations have satisfied all Section 16(a) filing requirements.

Code of Ethics

     In 2006 we  completed  a code  of  ethics  that  applies  to our  principal
executive officers,  principal financial or principal accounting officer. A copy
of the  code  will  be  available  on the  Company's  website  when  it  becomes
operational.

Item 10.  EXECUTIVE COMPENSATION

Director Compensation.

     Directors currently do not receive any cash compensation for serving on the
Board of Directors,  or for any other services  rendered to the Company in their
capacity as a director of the Company,  but are  reimbursed  for  expenses  they
incur in connection with their attendance.  The Company had adopted a 1993 Stock
Plan, under which its four (4) former Directors were entitled to and did receive


                                      -31-
<PAGE>

stock options.  In connection with the effectiveness of the Technology  Transfer
Agreement and the Employment  Agreement with New  Management,  four (4) outgoing
directors had their options cancelled and replaced by stock grants.  Such former
directors received the following number of newly issued shares of Company common
stock (prior to the 18 for 1 stock  dividend):  Allen  Campbell - 4,300  shares;
Jerry Jarrell - 2,000  shares;  Lawrence  Cottingham - 1,500 shares;  and Dermot
Butler - 1,500 shares.  Mr.  Campbell and Mr.  Jarrell will continue to serve as
members of the Company's advisory board. The 1993 Stock Option Plan has expired.
New Management  expects to recommend the adoption by the  shareholders  of a new
stock plan which would allow for the  issuance of  incentive  and  non-qualified
stock options to officers and directors.

Management Compensation.

     The  following  table  provides  information  concerning  the  compensation
expected to be earned during fiscal 2007 by Peter Cunningham,  the Company's new
Chief Executive Officer,  Joseph  Cunningham,  the Company's new Chief Financial
Officer, and Hao Zhang, the Company's new Chief Marketing Officer. The following
table also provides information concerning the compensation earned during Fiscal
2004, 2005 and 2006 by Messrs.  Campbell and Jarrell who were the only executive
officers  of the  Company  during  that time  period.  Such five (5) persons are
referred to as "Named Executive Officers."















                                      -32-
<PAGE>
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                         Summary Compensation Table Annual

-------------------------------------------------------------------------------------------------------------
                                                          Annual Compensation

--------------------------------------- ------------ ------------------------------ -------------------------
<S>                                     <C>          <C>             <C>            <C>
                                                                                       Other Compensation
                                                                                       ------------------
                                                                                     All Other Compensation,
                                                                                      including Annual and
                                        Fiscal                                              Long-Term
                                        Year ended                                         Compensation
                                        ----------                                         ------------
Name and Principal Position             March 31     Salary          Bonus
---------------------------             --------     ------          -----

--------------------------------------- ------------ --------------- -------------- -------------------------
Peter Cunningham, CEO and               2007         $125,000 (1)    $ 0            $ 0
Director

--------------------------------------- ------------ --------------- -------------- -------------------------
Joseph Cunningham, CFO and              2007         $120,000 (1)    $ 0            $ 0
Director

--------------------------------------- ------------ --------------- -------------- -------------------------
Hao Zhang,  Chief Marketing  Officer    2007         $115,000 (1)    $ 0            $ 0
and  Director

--------------------------------------- ------------ --------------- -------------- -------------------------
Allen Campbell, Former President((5))   2006         $  18,000       $ 40,000 (2)   $ 53,750 (3)
                                        2005         $  36,000       $ 0            $ 0
                                        2004         $  36,000       $ 0            $ 0

--------------------------------------- ------------ --------------- -------------- -------------------------
Jerry Jarrell, Former CFO((5))          2006         $    4,500      $ 0            $ 25,000 (4)
                                        2005         $    9,000      $ 0            $ 0
                                        2004         $    9,000      $ 0            $ 0
--------------------------------------- ------------ --------------- -------------- -------------------------
</TABLE>

(1)  The Company will accrue,  but not pay, the salaries of New Management until
     the Company has raised sufficient capital to make such payments.

(2)  Mr. Campbell received a cash bonus of $35,000 as consideration for his work
     in consummating the Technology Transfer Agreement on behalf of the Company,
     and an additional $5,000 due diligence fee.

(3)  Mr. Campbell  received a stock grant of 4,300 (pre 18 for 1 stock dividend)
     shares valued at $12.50 per share.

(4)  Mr. Jarrell  received a stock grant of 2,000 (pre 18 for 1 stock  dividend)
     shares valued at $12.50 per share.

(5)  Pursuant to the Letter  Agreement dated April 7, 2006, Mr. Campbell and Mr.
     Jarrell are entitled to receive, after the planned 18 for 1 stock dividend,
     20,000 shares and 10,000  shares,  respectively,  of Gamma common stock for
     past services to the Company.





                                      -33-
<PAGE>
<TABLE>
<CAPTION>

The following  table shows the number of shares  acquired by exercise of options
during Fiscal 2006 by the Named Executive Officers,  the value realized, and the
number of  unexercised  options  held by the Named  Executive  Offices and their
value.

------------------------------------------------------------------------------------------------------------------------
                 Aggregate Option Exercises During Fiscal 2006 and Fiscal 2006 Year End Option Values

------------------------------------------------------------------------------------------------------------------------
                                                  Number of Unexercised Securities   Value of Unexercised In the Money
                                                   Underlying Options at Year End         Options at Year End (1)
                                                              -------------------                    --------
------------------- ----------------- ----------- ---------------------------------- -----------------------------------
<S>                 <C>               <C>         <C>                                <C>
                         Shares
                        Acquired        Value
Name                   on Exercise     Realized       Exercisable/Unexercisable          Exercisable/Unexercisable
----                   -----------     --------       -------------------------          -------------------------
------------------- ----------------- ----------- ---------------------------------- -----------------------------------
Peter Cunningham                  0          0                              0/0                              $0/$0

------------------- ----------------- ----------- ---------------------------------- -----------------------------------
Joseph Cunningham                 0          0                              0/0                              $0/$0

------------------- ----------------- ----------- ---------------------------------- -----------------------------------
Hao Zhang                         0          0                              0/0                              $0/$0

------------------- ----------------- ----------- ---------------------------------- -----------------------------------
Allen Campbell                    0          0                                                               $0/$0
                                                                        4,300/0
------------------- ----------------- ----------- ---------------------------------- -----------------------------------
Jerry Jarrell                     0          0                                                               $0/$0
                                                                        2,000/0
------------------- ----------------- ----------- ---------------------------------- -----------------------------------
</TABLE>

-------------------
(1)  Calculated  using $12.50 per share as the fair market value of Gamma common
     stock at March 31, 2006.  There is no active trading market for Gamma stock
     so the fair market value is an estimate made by Gamma in good faith.

Item 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

     The  following  tables sets forth  certain  information  regarding  Gamma's
common stock  beneficially  owned on June 30, 2006,  after giving  effect to the
issuance  of  shares  to New  Management  pursuant  to the  Technology  Transfer
Agreement and the 18 for 1 stock  dividend  effective May 15, 2006, for (i) each
stockholder  known to be the beneficial  owner of 5% or more of the  outstanding
common stock, (ii) each current  executive  officer and director,  and (iii) all
executive  officers  and  directors  as a group.  The  table  assumes a total of
10,051,000 shares of common stock outstanding.












                                      -34-
<PAGE>

----------------------------- ------------------------ ----------------------

                                Amount of Beneficial     Percent Beneficial
  Name of Beneficial Owner            Ownership               Ownership
----------------------------- ------------------------ ----------------------
Peter Cunningham              4,613,409                45.9%

----------------------------- ------------------------ ----------------------
Joseph Cunningham             2,623,311                26.1%

----------------------------- ------------------------ ----------------------
Hao Zhang                     1,809,180                18.0%

----------------------------- ------------------------ ----------------------
All Gamma Executive           9,045,900                90.0%
Officers and Directors as a
group (three (3) persons)

----------------------------- ------------------------ ----------------------

Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The following transactions were or will be entered into with our promoters,
executive officers, directors and 5% or greater shareholders. These transactions
may or will  continue in effect and may result in conflicts of interest  between
us and these  individuals.  Although our executive  officers and directors  have
fiduciary  duties  to us and our  shareholders,  we  cannot  assure  that  these
conflicts  of  interest  will always be resolved in our favor or in the favor of
our shareholders.

     In connection  with the Technology  Transfer  Agreement and pursuant to the
Letter  Agreement  dated April 7, 2006,  the former  officers and directors were
entitled to receive the following:

         (a) The Company replaced the outstanding  stock options of its four (4)
resigning  directors  with the  following  grants of common  stock (pre 18 for 1
stock dividend):

             Allen Campbell            4,300 shares;

             Jerry Jarrell             2,000 shares;

             Lawrence Cottingham       1,500 shares; and

             Dermot Butler             1,500 shares.

         (b) Allen Campbell, the Company's resigning Chief Executive Officer and
Chairman  of the Board,  was paid a success fee in the amount of $35,000 in cash
and  10,000  shares of common  stock  (after the 18 for 1 stock  dividend).  Mr.
Campbell was also paid a $5,000 due diligence fee.


                                      -35-
<PAGE>

         (c) The  former  officers  and  directors,  Allen  Campbell  and  Jerry
Jarrell,  are to each receive a  compensation  bonus for past services of 10,000
shares of Gamma common stock (following the 18 for 1 stock dividend).

Item 13.  EXHIBITS

 3.1      Amended and Restated Certificate of Incorporation of the Registrant**
 3.2      Certificate of Amendment to Certificate of Incorporation,  dated April
          4, 2006***
 3.3      Certificate of Amendment to Certificate of  Incorporation  filed April
          25, 2006*
 3.4      Certificate of Amendment to Certificate  of  Incorporation  filed July
          13, 2006*
 3.5      Bylaws of the Registrant**
 4.1      Form of Certificate of Common Stock of Registrant**
10.1      Letter Agreement,  dated as of April 7, 2006, between Gamma and Joseph
          Cunningham, on behalf of New Management***
10.2      Technology  Transfer  Agreement  between  Gamma and Peter  Cunningham,
          Joseph Cunningham and Hao Zhang, dated April 7, 2007***
10.3      Employment Agreement with Peter Cunningham, CEO***
10.4      Employment Agreement with Joseph Cunningham, CFO***
10.5      Employment Agreement with Hao Zhang, CMO***
31        Certification  pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 302 of the Sarbanes Oxley Act of 2002*
32        Certification  pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes Oxley Act of 2002*

------------------------
*         means filed herewith
**        means filed in original registration  statement on Form SB-2, File No.
          33-61890-FW
***       means filed with Form 8-K on April 13, 2006

Item 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     Pannell Kerr Forster of Texas, P.C.  aggregate fees billed for professional
services rendered for the audit of our annual financial  statements for the 2006
and 2005 fiscal years and the review of the financial statements included in our
Forms  10-QSB and Forms 8K for the 2006 and 2005  fiscal  years were  $4,195 and
$2,554, respectively.  The engagement of Pannell Kerr Forster of Texas, P.C. for
the 2006 fiscal year and the scope of the audit-related services,  including the
audit and reviews described above were pre-approved by our audit committee.

Audit-Related Fees

     Pannell Kerr Forster of Texas,  P.C. did not provide any other assurance or
related service for fiscal years 2006 and 2005.


                                      -36-
<PAGE>

Tax Fees

     Pannell  Kerr  Forster  of Texas,  P.C.  did not  provide  any  tax-related
services for fiscal years 2006 and 2005.

All Other Fees

     Pannell Kerr Forster of Texas,  P.C. did not render any other  services for
us in 2006 or 2005.




















                                      -37-
<PAGE>

     SIGNATURES

     In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on July 13, 2006.

                                           GAMMA PHARMACEUTICALS INC.
                                           (formerly Emerging Gamma Corporation)

                                           By: /s/ Peter Cunningham
                                              ----------------------------------
                                              Peter Cunningham
                                              Chairman

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

By: /s/ Peter Cunningham                                   Dated:  July 13, 2006
   ------------------------------                          ---------------------
   Peter Cunningham
   Chairman of the Board and Director
   (Principal Executive Officer)

By: /s/ Joseph Cunningham                                  Dated:  July 13, 2006
   ------------------------------                          ---------------------
   Joseph Cunningham
   Chief Financial Officer, Secretary and Director
   (Principal Financial and Accounting Officer)












                                      -38-
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

                                                                            PAGE

Report of Independent Registered Public Accounting Firm                      F-2

Balance Sheet as of March 31, 2006                                           F-3

Statements of Operations for the Years Ended March 31, 2006 and 2005         F-4

Statements of Stockholders' Equity for the Years Ended March 31, 2006
  and 2005                                                                   F-5

Statements of Cash Flows for the Years Ended March 31, 2006 and 2005         F-6

Notes to Financial Statements                                                F-7




















                                      F-1
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Gamma Pharmaceuticals, Inc.:

We have audited the  accompanying  balance sheet of Gamma  Pharmaceuticals  Inc.
(formerly Emerging Gamma Corporation),  a Delaware corporation,  as of March 31,
2006, and the related  statements of operations,  stockholders'  equity and cash
flows for the years ended March 31, 2006 and 2005.  These  financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Gamma Pharmaceuticals,  Inc. as
of March 31, 2006,  and the results of its operations and its cash flows for the
years ended March 31, 2006 and 2005, in conformity with U.S.  generally accepted
accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements,  the Company has limited cash and no external financing to
fund its future  operations,  which raises doubt about the Company's  ability to
continue  as a going  concern.  Management's  plans in regard to this matter are
also  described  in  Note  1.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.


/s/ Pannell Kerr Forster of Texas P. C.
Houston, Texas
July 13, 2006








                                      F-2
<PAGE>

                           GAMMA PHARMACEUTICALS INC.
                                  BALANCE SHEET
                                 MARCH 31, 2006


                                     ASSETS

Current assets:
  Cash and cash equivalents                                           $  61,215

Total current assets                                                     61,215
                                                                      ---------


Total Assets                                                          $  61,215
                                                                      =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expense                                  $  20,705
                                                                      ---------
Total current liabilities                                                20,705

Long-term liabilities:                                                     --

Total liabilities                                                        20,705
                                                                      ---------

Stockholders' equity:
Preferred Stock $.001 par value; 500,000 shares authorized,
no shares, issued or outstanding                                           --
Common stock, $.001 par value; 20,000,000 shares authorized; 828,400
issued and outstanding                                                      828
Additional paid-in capital                                              295,003
Retained earnings (deficit)                                            (255,321)
                                                                      ---------
Total stockholders' equity                                               40,510
                                                                      ---------
Total Liabilities and Stockholders' Equity                            $  61,215
                                                                      =========



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





                                      F-3
<PAGE>

                           GAMMA PHARMACEUTICALS INC.
                            STATEMENTS OF OPERATIONS



                                                   Year Ended
                                             ----------------------
                                             March 31,    March 31,
                                               2006         2005
                                             ---------    ---------

INTEREST INCOME                              $   2,539    $   1,566
COST AND EXPENSE                                82,409    $ (85,303)
                                             ---------    ---------

TAX PROVISION                                     --           --
                                             =========    =========
NET LOSS                                     $ (79,870)   $ (83,737)

BASIC AND DILUTED LOSS PER SHARE             $    (.10)   $    (.11)
                                             ---------    ---------

WEIGHTED AVERAGE NUMBER OF BASIC
AND DILUTED SHARES OUTSTANDING                 828,400      828,400
                                             ---------    ---------















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





                                      F-4
<PAGE>
<TABLE>
<CAPTION>

                                       GAMMA PHARMACEUTICALS INC.
                                   STATEMENTS OF STOCKHOLDERS' EQUITY


------------------------- ----------------- ------------------ ------------ -------------- -----------
<S>                       <C>               <C>                <C>          <C>            <C>
                                                                Additional
                                                                 Paid-in      Accumulated
                           Preferred Stock     Common Stock      Capital        Deficit       Total


------------------------- ----------------- ------------------ ------------ -------------- -----------
                           Shares   Amount   Shares    Amount
------------------------- -------- -------- --------- -------- ------------ -------------- -----------
Balance, March 31, 2004         -        -   828,400     $828     $295,003     ($91,714)    $204,117

------------------------- -------- -------- --------- -------- ------------ -------------- -----------
Net Loss                        -        -         -        -            -      (83,737)    ($83,737
                                                                                --------    --------

------------------------- -------- -------- --------- -------- ------------ -------------- -----------
Balance, March 31, 2005                      828,400     $828      295,003     (175,451)    $120,380

------------------------- -------- -------- --------- -------- ------------ -------------- -----------
Net Loss                                                                        (79,870)    (79,870)
                                                                                --------    --------
------------------------- -------- -------- --------- -------- ------------ -------------- -----------
Balance, March 31, 2006         -        -   828,400     $828     $295,003    ($255,321)    $40,510
                                =        =   =======     ====     ========    ==========    =======

------------------------- -------- -------- --------- -------- ------------ -------------- -----------
</TABLE>














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





                                      F-5
<PAGE>

                           GAMMA PHARMACEUTICALS INC.
                            STATEMENTS OF CASH FLOWS



                                                           Year Ended
                                                     ----------------------
                                                     March 31,    March 31,
                                                       2006         2005
                                                     ---------    ---------

Cash flows from operating activities:
  Net loss                                           $ (79,870)   $ (83,737)
Adjustments to reconcile net loss to net cash used
  in operating activities:
       (Increase) decrease in prepaid expenses           6,687       (6,260)
  Increase (decrease) in accounts payable               18,659       (2,385)
                                                     ---------    ---------
Net cash used in operating activities                  (54,527)     (92,382)
                                                     ---------    ---------

Decrease in Cash and Cash Equivalents                  (54,527)     (92,382)
                                                     ---------    ---------

Cash and Cash Equivalents - beginning of year          115,742      208,124
                                                     ---------    ---------

Cash and Cash Equivalents - end of year              $  61,215    $ 115,742
                                                     ---------    ---------











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





                                      F-6
<PAGE>

                           GAMMA PHARMACEUTICALS INC.

                          NOTES TO FINANCIAL STATEMENTS

                             MARCH 31, 2006 AND 2005

1.   DESCRIPTION OF ORGANIZATION:

Emerging  Gamma  Corporation  ("Gamma") was  incorporated  under the laws of the
State of Delaware on February 10, 1993,  for the purpose of seeking out business
opportunities,  including  acquisitions  that  the  Board of  Directors,  in its
discretion, believed to be good opportunities. In 2002, after a tender offer for
Gamma's  shares,  a new Board of Directors  succeeded  the original  Board,  but
maintained  the same goal of seeking out new business  opportunities.  This goal
led to the acquisition of the Transferred  Technology and new business described
above in connection  with the  Technology  Transfer  Agreement on April 7, 2006.
After the  acquisition,  Gamma  amended its  Certificate  of  Incorporation  and
changed its name to Sunburst Pharmaceuticals, Inc. and then to its current name,
Gamma Pharmaceuticals Inc.  (hereinafter,  the "Company").  Such acquisition has
also resulted in bringing into the Company specialized  management to enable the
Company to use the new  technology to develop a business  based on the marketing
and  sale of  vitamins  and  nutriceuticals,  OTC  pharmaceutical  products  and
personal  care  products in Greater China and the United  States.  However,  the
marketing of vitamins and nutriceuticals,  OTC pharmaceuticals and personal care
products in Greater  China and vitamins  and  nutriceuticals  and personal  care
products in the U.S.,  or any other  business  opportunity  in which the Company
ultimately  participates,  will  likely be highly  risky  and  speculative.  The
Company's  current cash balance will not be adequate for the Company to continue
its  operations  for this fiscal  year;  and, in order to compete in this or any
other new business  opportunity an additional cash infusion will be required and
without such  additional cash infusion the Company will very quickly deplete its
current cash reserve.

As of the date of this Annual  Report on Form 10-KSB,  the Company has less than
$5,000 in available cash. Accordingly,  without a cash infusion the Company will
be unable to meet its  liquidity  requirements  for the next twelve (12) months.
The Company will seek an initial  investment by way of a private placement of up
to  $3,000,000  of its common  stock.  The Company  plans to raise this  private
capital in the United  States,  Europe and Asia. New Management has held initial
discussions with investment banks in the United States to represent the Company,
but there can be no assurance  that such  investment  banks will  represent  the
Company or will be  successful  in raising the  necessary  funds.  The financial
statements  have been prepared  assuming that the Company is a going concern and
do not  contain  any  adjustment  that  might  arise  from the  outcome  of this
uncertainty.

2.   SIGNIFICANT ACCOUNTING POLICIES:

The Company  considers  all highly liquid  investments  with a maturity of three
months or less when  purchased to be cash  equivalents.  At March 31, 2006,  all
cash was invested in a money market account.


                                      F-7
<PAGE>

The Company  follows the asset and liability  method of accounting  for deferred
income taxes prescribed by Statement of Financial  Accounting Standards ("SFAS")
No.  109  "Accounting  for  Income  Taxes".   The  Statement  provides  for  the
recognition of a deferred tax asset for deductible temporary timing differences,
capital and operating loss carry forwards, and tax credit carry forwards, net of
a "valuation allowance". The valuation allowance is provided for that portion of
the asset,  for which it is deemed  more  likely  than not,  that it will not be
realized. There are no temporary differences between financial reporting and tax
basis of assets and liabilities. The Company has incurred a cumulative loss from
operations  since  inception.  Therefore,  a full  valuation  allowance has been
provided  against the deferred tax asset  resulting  from the net operating loss
(NOL) carry  forward.  No benefit was provided for the net loss incurred in 2006
or  2005.   The  net  operating  loss  carry  forward  at  March  31,  2006  was
approximately $255,321, which will be available to offset future taxable income,
NOL carry forwards will expire beginning in 2008 through 2025.

The Company accounts for stock options in accordance with Accounting  Principles
Board Opinion No. 25,  "Accounting  for Stock Issued to  Employees",  whereby no
compensation  expense is  recognized  upon  grant.  The fair value and other pro
forma  disclosures  required  by  SFAS  No.  123,  "Accounting  for  Stock-based
Compensation"  as  amended  by SFAS  No.  148,  have not  been  included  in the
financial  statements as such  disclosures  are not  considered  material to the
financial statements.

Subsequent  to year end and in  conjunction  with the  acquisition  described in
Notes 1 and 8, the Company  increased its authorized  common and preferred stock
to 20,000,000 and 500,000 shares respectively, decreased the par value of common
stock from $1.00 to $0.001 and  declared an 18 for 1 stock  dividend.  The stock
dividend  and  change  in par  value  have been  reflected  in the  accompanying
financial statements by retroactively restating all share and per share amounts.

Basic earnings per common share amounts are calculated  using the average number
of common  shares  outstanding  during each period.  Diluted  earnings per share
assumes the exercise of all stock options having  exercise  prices less than the
average market price of the common stock using the "treasury stock method".  All
options were excluded from the computation of diluted earnings per share because
they were antidilutive.

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

3.   CASH CONCENTRATION

The Company  maintains its cash in a U.S.  cash money market fund.  The terms of
these  deposits  are on demand to minimize  risk.  The Company has not  incurred
losses related to these deposits.


                                      F-8
<PAGE>

4.   RELATED PARTY TRANSACTIONS:

Officers and directors are compensated based on actual time and expenses devoted
to the Company's  business.  During fiscal 2006 and 2005, monthly fees of $3,000
and $750 were paid to the Company's Chief Executive Officer and to the Company's
Chief Financial  Officer,  respectively.  Total amounts paid amounted to $22,500
and $45,000 for 2006 and 2005, respectively.

5.   STOCK OPTION PLAN:

The Company's  1993 Stock Option Plan (the "Plan")  provides for the issuance of
up to 2 million  shares of common  stock at no less than 85% of market  value at
the time of grant (for  non-qualified  options)  and no less than 110% of market
value for incentive stock options (110% if the optionee holds 10% or more of the
Company's common stock).

A summary  of the  Company's  stock  options  as of March 31,  2006 and 2005 and
changes during the years then ended are presented below:

                                                Number         Weighted-Average
                                              of Shares         Exercise Price

     Outstanding at March 31, 2004              9,300               $14.35
          Granted                                 --                   --
          Exercised                               --                   --
          Canceled                                --                   --

     Outstanding at March 31, 2005              9,300               $14.35
          Granted                                 --                   --
          Exercised                               --                   --
          Canceled                                --                   --
     Outstanding at March 31, 2006              9,300               $14.35

     Exercisable at March 31, 2006              9,300               $14.35

All stock options expire March 14, 2008.

All options were excluded  from the  computation  of diluted  earnings per share
because they were antidilutive.

All options were  converted to stock grants in April 2006 and the plan  expired.
Following the stock  dividend,  this resulted in 176,700  shares of common stock
issued to the former option holders.


                                      F-9
<PAGE>

6.   STOCK WARRANTS

The Company issued stock warrants to purchase 208 shares of the Company's common
stock to the provider of the  Company's  web site.  The warrants  were issued on
December 16, 2002 at an exercise price of $25.00 per share and expired  December
15, 2005. The stock warrants  became  exercisable  only if the web site led to a
reverse merger transaction with the Company prior to expiration.

7.   NEW ACCOUNTING PRONOUNCEMENT ISSUED BUT NOT YET ADOPTED

In December 2004, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 123R,  "Share-Based  Payment," This standard requires that companies measure
and record the fair value of their stock based compensation awards at fair value
on the date they are granted to employees.  This fair value is determined  based
on a variety of assumptions,  including  volatility rates,  forfeiture rates and
the  option  pricing  model  used  (e/g.  binomial  or  Black  Scholes).   These
assumptions  could  significantly  differ from those  currently  utilized.  This
standard is  effective  for the first  interim  period of the first  fiscal year
beginning after December 15, 2005 (the Company's  fiscal year beginning April 1,
2006),  at which time  companies can select whether they will apply the standard
retroactively   by  restating   their   historical   financial   statements   or
prospectively  for new stock-based  compensation  arrangements  and the unvested
portion of existing arrangements.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections  - a  Replacement  of APB Opinion No. 20 and FASB  Statement No. 3."
SFAS No.  154  requires  retrospective  application  to prior  period  financial
statements of changes in accounting  principle,  unless it is  impracticable  to
determine  either the  period-specific  effects or the cumulative  effect of the
change. SFAS No. 154 also redefines  "restatement" as the revising of previously
issued  financial  statements  to  reflect  the  correction  of an  error.  This
statement is effective for accounting  changes and corrections of errors made in
fiscal years beginning after December 15, 2005.

8.   SUBSEQUENT EVENTS

     On April 7, 2006,  Gamma  Pharmaceuticals  Inc.  (formerly  Emerging  Gamma
Corporation),  a Delaware  corporation (the "Company") entered into a Technology
Transfer Agreement (the "Technology  Transfer  Agreement") pursuant to which the
Company has obtained all  copyrights,  trademarks,  and know-how  (collectively,
"Transferred  Technology") to a portfolio of vitamin and nutriceutical  products
and personal care products.  The Transferred  Technology is based on proprietary
formulation  technology,  and the Company  believes such  technology  represents
improved  versions  of  branded  products  currently  being  marketed  by  other
companies. The new products are aimed at consumers in (i) Greater China (Peoples
Republic of China [China], Hong Kong and Republic of China [Taiwan]) healthcare,
vitamins and  nutriceutical  markets,  over-the-counter  ("OTC")  pharmaceutical
markets,  and  personal  care  markets and (ii) the United  States  vitamins and
nutriceutical  markets,  OTC pharmaceutical  markets, and personal care markets.
The Company believes that the products, technologies and marketing platform will


                                      F-10
<PAGE>

enable us to pursue a specialized business model for succeeding in these Greater
China and United States markets.

     In consideration for the Transferred  Technology,  Gamma has issued 242,811
shares of its common stock to Mr. Peter Cunningham, 138,069 shares of its common
stock to Mr. Joseph Cunningham, and 95,220 shares of its common stock to Mr. Hao
Zhang.  This  aggregate of 476,100 shares  represents  90% of Gamma's  currently
outstanding  shares of common  stock.  Following  the  Company's  18 for 1 stock
dividend, effective May 15, 2006, New Management owned an aggregate of 9,045,900
shares of the Company's common stock out of a total 10,051,000 outstanding.

     Upon the effectiveness of the Technology Transfer Agreement,  the Company's
Board of Directors has resigned and has been  replaced by Mr. Peter  Cunningham,
as Chairman of the Board of Directors, Mr. Joseph Cunningham, Company Secretary,
and Mr. Hao Zhang. Gamma's officers also resigned and were replaced by Mr. Peter
Cunningham  (Chief Executive  Officer),  Mr. Joseph  Cunningham (Chief Financial
Officer  and  Secretary),  and Mr.  Hao Zhang  (Chief  Marketing  Officer).  The
Company's name was changed to Sunburst  Pharmaceuticals,  Inc. on April 25, 2006
and then changed again to Gamma Pharmaceuticals Inc. as of July 13, 2006.

     In connection with the  consummation of the Technology  Transfer  Agreement
and the Employment  Agreements the address of the Company's  principal executive
officers was changed to 2225 Angelfire Street, Las Vegas, Nevada 89128.















                                      F-11
<PAGE>

                                INDEX TO EXHIBITS
                                -----------------

 3.1      Amended and Restated Certificate of Incorporation of the Registrant**
 3.2      Certificate of Amendment to Certificate of Incorporation,  dated April
          4, 2006***
 3.3      Certificate of Amendment to Certificate of  Incorporation  filed April
          25, 2006*
 3.4      Certificate of Amendment to Certificate  of  Incorporation  filed July
          13, 2006*
 3.5      Bylaws of the Registrant**
 4.1      Form of Certificate of Common Stock of Registrant**
10.1      Letter Agreement,  dated as of April 7, 2006, between Gamma and Joseph
          Cunningham, on behalf of New Management***
10.2      Technology  Transfer  Agreement  between  Gamma and Peter  Cunningham,
          Joseph Cunningham and Hao Zhang, dated April 7, 2007***
10.3      Employment Agreement with Peter Cunningham, CEO***
10.4      Employment Agreement with Joseph Cunningham, CFO***
10.5      Employment Agreement with Hao Zhang, CMO***
31        Certification  pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 302 of the Sarbanes Oxley Act of 2002*
32        Certification  pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes Oxley Act of 2002*

------------------------
*         means filed herewith
**        means filed in original registration  statement on Form SB-2, File No.
          33-61890-FW
***       means filed with Form 8-K on April 13, 2006