**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**AMENDMENT
        NO. 2 TO**


**FORM 10-K**




(Mark
      One)




x
            **ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                OF 1934**




For
      the
      fiscal year ended December 31, 2007




or




o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                OF 1934**




For
      the
      transition period from __________ to __________




**Commission
      file number: 01-31937**





**YANGLIN
      SOYBEAN, INC.**


(Exact
      name of registrant as specified in its charter)




**Nevada**
              (State or other jurisdiction
              of incorporation or organization)
            
            **20-4136884**
              (I.R.S. Employer
              Identification No.)





**NO.
      99 FANRONG STREET, JIXIAN COUNTY**


**SHUANG
      YA SHAN CITY**


**HEILONGJIANG
      PROVINCE**


**CHINA,
      155900**


(Address
      of Principal Executive Offices)




**86-469-469300**


(Registrant’s
      Telephone Number, Including Area Code)




**VICTORY
      DIVIDE MINING COMPANY**


(Former
      Name, Former Address And Former Fiscal Year, If Changed Since Last
      Report)





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




**Securities
      registered pursuant to Section 12(g) of the Act:**





**Title of Each Class:**
            
            **Name of Each Exchange on Which Registered**Common Stock, par value $0.001
            
            None





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.


Yes o No þ




Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act.


Yes o No þ












Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 12 months (or for such shorter period that the
      registrant was required to file such reports), and (2) has been subject to
      such filing requirements for the past 90 days. Yes þ No o




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the
      best of registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any
      amendment to this Form 10-K. Yes o No þ




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filed. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):





Large accelerated filero
            Accelerated filero


Non-accelerated filerþ
            Smaller
                Reporting Companyo(Do
                not check if a Smaller Reporting Company)




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


Yes o No þ





The
      total
      revenue for the most recent fiscal year is US $155,206,867.





There
      was
      no active public trading market as of the last business day of the Company’s
      second fiscal quarter.





As
      of March 31, 2008, there are 20,000,003 shares of common stock outstanding.





EXPLANATORY
      NOTE


This
        Amendment No. 2 to our annual report on Form 10-K, for the fiscal year ended
        on
        December 31, 2007, initially filed with the Securities and Exchange Commission
        (“SEC”) on March 31, 2008 is being filed in response to SEC’s comment letter
        dated July 23, 2008.









**YANGLIN
      SOYBEAN, INC.**


**(A
      Nevada Corporation)**





**TABLE
      OF CONTENTS**




**Page****PART
                I**Item 1
            Business
            
            3Item 1A
            Risk
                Factors
            
            16Item 1B
            Unresolved
                Staff Comments
            
            25Item 2
            Properties
            
            26Item 3
            Legal
                Proceedings
            
            27Item 4
            Submission
                of Matters to a Vote of Security Holders
            
            27**PART II**Item 5
            Market
                for Registrant’s Common Equity, Related Stockholder Matters and Issuer
                Purchases of Equity Securities
            
            27Item 6
            Selected
                Financial Data
            
            27Item 7
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operation
            
            29Item 7A
            Quantitative
                and Qualitative Disclosures About Market Risk
            
            44Item 8
            Financial
                Statements and Supplementary Data
            
            44Item 9
            Changes
                in and Disagreements With Accountants on Accounting and Financial
                Disclosure
            
            45Item 9A
            Controls
                and Procedures
            
            45Item 9B
            Other
                Information
            
            47**PART III**Item 10
            Directors,
                Executive Officers and Corporate Governance
            
            47Item 11
            Executive

                Compensation
            
            48Item 12
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            
            50Item 13
            Certain
                Relationships and Related Transactions, and Director
                Independence
            
            53Item 14
            Principal
                Accounting Fees and Services
            
            54**PART IV**Item 15
            Exhibits
                and Financial Statement Schedules
            
            55




-2-




**PART I**





**Item 1.
      Business**




***Organizational
      History***





Yanglin
      Soybean Inc. (formerly known as Victory Divide Mining Company, the “Company”)
      was incorporated in the state of Nevada on May 26, 1921. Prior to October 3,
      2007 the company has only nominal operations and assets.





On
      October 3, 2007, the Company executed a reverse-merger with Faith Winner
      Investments Limited (“Faith Winner (BVI)”) by an exchange of shares whereby the
      Company issued 18,500,000 common shares at $0.001 par value in exchange for
      all
      Faith Winner (BVI) shares.





Faith
      Winner (BVI) formed Faith Winner (Jixian) Agriculture Development Company
      (“Faith Winner (Jixian)” or “WFOE”), which entered into a series of agreements
      with Heilongjiang Yanglin Soybean Group Co., Ltd. (“Yanglin”) including but not
      limited to management, loan, purchase option, consignment, trademark licensing,
      non-competition, etc. As a result of entering the abovementioned agreements,
      WFOE is deemed to control Yanglin as a Variable Interest Entity as required
      by
      FASB Interpretation No. 46 (revised December 2003) Consolidated of Variable
      Interest Entities, an Interpretation of ARB No. 51.





The
      contractual agreements were utilized instead of a direct acquisition of
      Yanglin’s assets because current PRC law which took effect on September 8, 2006
      does not specifically establish the approval procedures and detailed
      implementation regulations for a non-PRC entity’s equity to be used as
      consideration to acquire a PRC entity's equity or assets. This makes it highly
      uncertain, if not impossible, for a non-PRC entity to use its equity to acquire
      a PRC entity. If acquisition of a PRC entity using foreign equity were possible,
      we could have acquired 100% of the stock of Yanglin in exchange for shares
      of
      our common stock. While PRC law does allow for the purchase of equity interests
      in (or assets of) a PRC entity by a non-PRC entity for cash, the purchase price
      must be based on the appraised value of such equity (or assets). Because we
      presently do not have sufficient cash to pay the estimated full value of all
      of
      the assets of Yanglin, we, through WFOE, purchased the maximum amount of assets
      possible with the net proceeds of the private placement on October 7, 2007,
      and
      leased from Yanglin the remainder of the assets used in Yanglin’s
      business.





The
      reverse-merger also included an equity financing of $21,500,000 by the issuance
      of 10,000,000 Series A Convertible Preferred Stock at $2.15 per share to 10
      accredited investors.





The
      Company, through its subsidiaries and Yanglin (hereinafter, collectively
      referred to as “the Group”), is now in the business of manufacturing,
      distribution, and selling of non-genetically modified soybean oil, salad oil,
      and soybean meal throughout the Province of Heilongjiang, China.





On
      January 17, 2008, the Company changed its name from “Victory Divide Mining
      Company” to Yanglin Soybean, Inc.”





***Our
      Industry***





We
      are a
      leading non-genetically modified (non-GM) soybean processor in the PRC. We
      currently manufacture soybean oil in bulk package and soybean meal which are
      sold throughout China our customers directly or through distributors. Most
      of
      our customer (approximately 80%) are located in Northern China.





Our
        manufacturing process includes sifting, crushing, heating and pressing soybeans,
        extracting and separating oil from crushed soybeans, and cleansing, hydrating
        and packaging oil as well as drying and packaging soybean meal. Currently,
        our
        main products include soybean oil, salad oil and soybean meal. We plan to
        broaden our product line to include high end products such as squeezed oil,
        powdered oil and protein concentrates, textured protein, and defatted soybean
        powder, while greatly enlarging the production capacity of salad oil. We
        have
        installed the equipment for manufacturing squeezed oil and expanded the
        production line for salad oil and have started production of these products
        by
        the end of 2007. The production facilities for powdered oil have been built
        and
        are now in trial production phase. We have also begun to build facilities
        for
        manufacturing soybean protein concentrates, textured protein and defatted
        soy
        powder. The
        production of c oncentrated
        protein and defatted soy powder will be launched within the last quarter
        of
        2008, and the
        production line of textured
        protein will
        be
        put into operations within
        the 2 nd quarter
        of 2009 .




***The
      Soybean Processing Industry***





Soybean
      processing is a traditional industry. Typically, soybeans are ground and refined
      into soybean oil and protein meal, which in turn are processed into refined
      oils, animal feed, proteins and more value-added products such as foods,
      pharmaceuticals and cosmetics.




-3-




*(i)*  *Soybean
      Oil and Soybean Salad Oil*





Soybean
      oil is obtained by the extraction of oil from soybean seeds. Soybean oil
      contains various vitamins, minerals and unsaturated fatty acids which are
      essential to the well-being of the human body. It is an important ingredient
      in
      products such as salad dressings, margarine, paint and medicines. The price,
      adaptability and performance of soybean oil make it appropriate for a broad
      range of food, chemical and medical manufacturing applications. Soybean oil
      refers to Grade IV oil, as compared to the more refined salad oil. Both oils
      are
      for human consumption.





*(ii)*  *Soybean
      Meal*





Soybean
      meal is manufactured by grinding soybean flakes which remain after removal
      of
      most of the oil from soybeans by a solvent or mechanical extraction process.
      Soybean meal is an important raw material used in the animal feed and farming
      industry due to its high protein content, low fat composition and edible
      characteristics. Given the PRC’s closer proximity to customers in the Asian
      region, there is a growing demand for PRC produced soybean meal from countries
      such as Korea and Japan. This in turn has led to an increase in demand for
      our
      soybean meal products.




***Growth
      in the Soybean Industry***





Apart
      from being a food commodity, soybean oil is also used in the cosmetics,
      pharmaceutical and medical industries.  As soybean oil consumption in the
      PRC has been rapidly increasing, the PRC has imported soybean oil from other
      countries, such as Argentina, Brazil and the USA.





**World
      Vegetable Oil Consumption 2006**










Million
              Short
                Tons
            
            Million
              Metric
                TonsPalm
            
            
            42.0
            
            
            38.1Soybeans
            
            
            39.3
            
            
            35.7Rapeseed
            
            
            19.7
            
            
            17.8Sunflower
                seed
            
            
            11.3
            
            
            10.2Peanut
            
            
            5.4
            
            
            4.9Cottonseed
            
            
            5.2
            
            
            4.8Palm
                Kernel
            
            
            4.8
            
            
            4.3Coconut
            
            
            3.6
            
            
            3.3Olive
            
            
            3.2
            
            
            2.9Total
            
            
            134.5
            
            
            122.0


Source:
      USDA




-4-




**World
      Protein Meal Consumption 2006**










**Million**
              **Short Tons**
            
            **Million**
              **Metric**
              **Tons**Soybeans
            
            
            166.7
            
            
            151.3Rapeseed
            
            
            30.2
            
            
            27.4Cottonseed
            
            
            16.4
            
            
            14.9Sunflower
                seed
            
            
            12.7
            
            
            11.5Peanut
            
            
            6.3
            
            
            5.7Fish
            
            
            6.0
            
            
            5.5Palm
                Kernel
            
            
            6.1
            
            
            5.5Copra
            
            
            1.9
            
            
            1.7Total
            
            
            246.3
            
            
            223.4





*Source:
      USDA*





In
      the
      past few years, the soybean industry has seen a period of sustained growth.
      We
      believe that the soybean industry in the PRC has significant potential for
      further growth and we, through Yanglin, are well positioned to take advantage
      of
      such growth. Soybeans are grown for their oil and protein and are used to
      manufacture various products including soybean oil and soybean meal. According
      to the Food and Agriculture Organization of the United Nations, global
      consumption of oils and fats has been steadily increasing, rising at an average
      rate of approximately 3-4%.


Specifically,
      the PRC is a major importer of soybeans. In recent years, there has been a
      marked increase in the volume of soybeans imported by the PRC from countries
      such as the USA, Argentina and Brazil. The latest statistics of China’s Customs
      showed that the PRC imported 30.8 million tons of soybeans in 2007, at a growth
      of about 9% over the previous year. We estimated that the total consumption
      of
      soybeans from 2005 to 2006 (October 2005 to September 2006) was 42.32 million
      tons..





We
      believe that such growth in consumption of soybeans in the PRC market is
      beneficial to our business operations and presents great potential for our
      further development.




-5-







Source: http://sjzl.agri.gov.cn/rpt/reportControl/reports.aspx?Target=_self&ReportID=21





***Non-Genetically
      Modified Soybean Products***





Genetically
      modified soybean plants are widespread in the world’s leading soybean producing
      countries (such as Brazil, Argentina and the United States) and genetically
      modified soybeans comprise a very large proportion of the world’s soybean
      production. Conversely, most of the soybean food products exported from the
      PRC
      is primarily made from non-genetically modified soybeans that are cultivated
      and
      grown in the PRC.




We
        believe that a growing number of consumers prefer their food products to
        be made
        from non-genetically modified raw materials, and food products include soybean
        based products. Such
        non-genetically modified soybean products are perceived to be “green” and hence
        more desirable to certain classes of consumers than genetically modified
        soybean
        products, especially with respect to soy protein and other value-added soybean
        products. Furthermore, we believe that as a result of the increasing affluence
        and sophistication of the consumers in the PRC, European Union, Korea and
        Japan,
        they have also become more aware of potential health issues arising from
        the
        consumption of genetically modified soybean products and are willing to pay
        a
        premium for non-genetically modified soybean products.





As
      a
      producer of non-genetically modified soybean products, we believe we are well
      positioned to take advantage of such growth.





***Government
      Support for the Soybean Industry***





In
      addition, there has been strong government support for the development of our
      industry. In recent years, the PRC government has sought to differentiate
      soybean exports from the PRC from those from other international exporters
      of
      soybeans such as the United States and Argentina. Specifically, the PRC
      government has take measures to promote industries and enterprises, such as
      our
      business operations, that produce non-genetically modified soybean food
      products. In 2003, the PRC Ministry of Agriculture announced a plan to develop
      the PRC’s northeastern region (including the Heilongjiang province where we are
      located) into the world’s largest non-genetically modified soybean production
      centre for export within five years.





In
      addition, the Heilongjiang provincial government has introduced a number of
      measures to develop its organic farming industry such as improving its local
      agriculture infrastructure and promoting the development of large industrial
      groups that produce green and organic food products. Over the past five years,
      Heilongjiang's green food industry has grown significantly and has become an
      important growth sector in Heilongjiang’s burgeoning economy. Further, we
      believe that the proportion of “deep-processed” soybean food products produced
      by the PRC will increase and is expected to grow significantly, particularly
      with the completion of the PRC’s largest non-genetically modified soybean
      deep-processing base in by 2010.




-6-




We
      believe that these various government initiatives at national and local level
      will have a positive impact on the further development of our business
      operations.





**Our
      Competitive Advantages**





We
      believe that we have several competitive advantages:





1.
 
      Our products have favorable brand recognition because of the superior quality
      of
      our products;





2. Our
      workers have great skills and experience in the soybean industry. Many of them
      worked in the industry for more than 20 years;





3. Our
      business is better managed and is more flexible than many larger state-owned
      soybean processors. As a privately owned business, we are more efficient and
      in
      better financial conditions.





4. Our
      costs are lower than those of our major competitors because our management
      is
      lean and efficient.





5. We
      have vast sales networks covering the most areas of China and better
      arrangements of the distributors which save cost and promote higher efficiency.




6. We
      believe that we are one of the largest players in the non-genetically modified
      soybean industry. Given that large international agricultural conglomerates
      such
      as Archer Daniels Midlands and Cargill produce predominantly genetically
      modified soybean food products, we do not face direct competition from these
      players in our niche market.




**Our
      Strategy**





***Increase
      Our Sources of Supply***




Due
      to
      the increasing market demand, we expect our business to grow significantly
      in
      the next few years. Our need for soybean supply will only increase. In order
      to
      increase our raw material supplies, we intend to expand the soybean cultivation
      area supplying us through the development of further supply arrangements with
      other private and state-owned farms within the Heilongjiang province. Currently,
      we have access to soybeans produced in approximately 164,745 acres of farmland
      and we plan to increase our access to approximately 823,723 acres of farmland
      in
      the next few years in other locations by signing up more soybean farmers and
      through other arrangements.





***Expand
      Capacity by Building New Plants or through
      Acquisitions***





To
      meet
      the demand for soybean products, we plan to increase our capacity. We intend
      to
      expand our production facilities by acquiring of 3 or 4 additional factories.
      We
      expect that these acquisitions will allow us to increase our current annual
      soybean processing capacity to approximately 1.5 million tons of soybeans over
      the next 3 years.





***Expansion
      of our Sales Network***




We
      currently sell more in the northern China than other parts of China and
      currently do not have many sales offices in the South. We plan to expand our
      sales and marketing network by establishing more sales offices within the PRC.
      In addition, we are talking to potential agents in Southeast Asia and Russia.
      We
      intend to use Chinese export agents to manage currency risk. Our plan is to
      expand internationally into countries such as Singapore, Malaysia, Canada and
      the United States.




-7-




***Expansion
      of our Product Line***





We
      believe that value added soybean products will yield higher profits margins
      for
      our operations. We intend to expand our product lines to include the following
      high end soybean products:





*(i)*  *Powdered
      Soybean Oil*





Powdered
      soybean oil is manufactured by processing soybean oil and soybean salad oil
      together with corn syrup and other raw materials. Powdered soybean oil not
      only
      retains the nutritional value of liquid soybean oil , but also has a long shelf
      life and can be easily packaged and transported. In addition, powdered soybean
      oil can be used as a cheap substitute for milk or powdered milk because it
      can
      be easily dissolved or mixed with other ingredients in water to produce a
      mixture that has a strong fragrance similar to that of milk, as well as
      containing beneficial proteins and minerals.





*(ii)*  *Textured
      Protein*





Textured
      protein products are manufactured from soy protein. Textured protein products
      are hydrated in the production process and accordingly have a symmetrical,
      consistent and smooth texture and specific structure. Textured protein can
      be
      added to food products to impart a taste that is similar to that of meat.
      Therefore, textured protein can be used as a food substitute for beef and pork.
      In addition, textured protein contains anti-oxygenation ingredients that could
      prolong the shelf-life of certain food products.





*(iii)*  *Defatted
      Soybean Powder*





Defatted
      soybean powder is manufactured from specially-extracted soy meal and has a
      high
      protein content (higher than 50 per cent.). Defatted soybean powder can be
      added
      to fish, noodles, meat, dairy products and candy to improve the quality and
      taste of food. Further, defatted soybean powder can prolong shelf life [and
      reduce cost.





*(iv)*  *Squeezed
      Oil*





Squeezed
      oil is made by extracting crude soybean oil from selected soybeans through
      traditional methods of refining and hydration in order to remove the acids
      in
      the oil. Squeezed oil is readily absorbed by the human body and contains no
      cholesterol. It possesses vitamins such as A, D, and E, as well as other
      nutrients which have been shown to help growth, improve immunity and prevent
      hypertension and arteriosclerosis.





*(v)*  *Concentrated
      Soy Protein*





Concentrated
      soy protein has a high protein content of up to 98% and contains no cholesterol.
      Concentrated soy protein can be used as an ingredient in food products to
      improve their texture and nutritional value. Concentrated soy protein is used
      as
      an ingredient in a wide range of food products, including nutritional
      supplements, seafood, processed meats, frozen food, nutritional beverages,
      cream
      soups, sauces and snacks.





**Our
      Current Products**





Our
      current products include the following:





**Product**
            
            **Use**
            
            **Major Customers**
            
            **2007 Volume (tons)**Soybean
                Oil
            
            Cooking
            
            Yingkou
                Bohai Grease Industrial Co. Ltd., Yi Liping
            
            49,566Salad
                Oil
            
            Cooking
            
            Yingkou
                Bohai Grease Industrial Co. Ltd., Yu Guanghai
            
            15,207Soybean
                Meal
            
            Animal
                Feed
            
            Yingkou
                Bohai Grease Industrial Co. Ltd., Tongliao Hongzhan Animal Feed Factory,
                Li Yuqiu, Gu Changchun, Wang Chunyu
            
            319,706




-8-




We
      sell
      our products under the “Yanglin” brand name to various geographic regions of the
      PRC through our various distribution channels (see “ *Sales
      and Marketing* ”
below)
      directly to our customers primarily within the PRC market. In the fiscal
      year ending 2007, we processed approximately 385,000 tons of soybeans and
      generated total revenues amounting to approximately $155.2 million with net
      income amounting to $10.3 million. Within the 2007 production volume of our
      main
      products, namely soybean meal, soybean oil and salad oil, soybean meal occupied
      a major share of about 83%, while soybean oil and salad oil made up 17%
      together.





**Our
      Suppliers of Soybeans**





Maintaining
      a stable supply of raw materials (soybeans) is one of the key components for
      our
      success. We purchase all our soybean supplies from various farms in the
      Heilongjiang province. We have established and maintained good relationships
      with these farms.





The
      following is a list of our top ten major suppliers of soybeans for the financial
      year ended December 31, 2007:





Supplier
            
            Amount
              Purchased
              (in US$)
            
            % of
              Total
              Purchases
              (%)Baoqing
                North Granary
            
            
            10,905,894.11
            
            
            7.46Cui
                Bingyan
            
            
            6,138,677.51
            
            
            4.20Duan
                Xufeng
            
            
            5,437,402.67
            
            
            3.72Chi
                Cuie
            
            
            5,211,779.68
            
            
            3.56Wang
                Li
            
            
            5,176,965.99
            
            
            3.54Tang
                Lijun
            
            
            4,890,610.42
            
            
            3.35Jiang
                Minghui
            
            
            4,279,171.14
            
            
            2.93Bai
                Wenlong
            
            
            4,261,078.14
            
            
            2.91Chen
                Fuzhen
            
            
            3,622,287.92
            
            
            2.48Chen
                Libin
            
            
            3,534,869.87
            
            
            2.42





*Note:
      the amounts are converted from RMB value using the yearly average rate of 2007,
      1USD = 7.6172RMB.*





Our
      top
      ten suppliers together made up an aggregate of 36.6% of our total supply of
      soybeans, but our biggest supplier only supplied less than 7.5% of our total
      supply, while none of the other top suppliers occupied a share of over 5%.
      We
      believe this diversification of supply is beneficial to us as it increases
      our
      bargaining power and prevents us from being over-reliant on any single
      supplier.





We
      have
      been using a unique type of arrangements with soybean suppliers. Through our
      affiliate company, Heilongjiang Yanglin Group Seed Co. Ltd., we supply these
      farmers with “Yanglin” soybean seeds which provide higher oil yield. Pursuant to
      annual supply contracts, the farmers sell the harvested soybeans back to us.
      We
      extend favorable commercial terms to these farmers, such as low price and credit
      payment terms, for them to purchase “Yanglin” soybean seeds, and offer favorable
      price, which is higher than average market price, and cash-upon-delivery payment
      terms to the farmers for our purchases of the harvested soybeans grown from
      “Yanglin” soybean seeds. These arrangements ensure that we maintain good
      relations with our suppliers, enjoy a stable supply of soybeans that meet our
      high quality standards at competitive rates, and allow us to maintain a low
      rate
      of expenditure on raw materials.





To
      further ensure a consistent and supply of soybeans and to increase its volume,
      we intend to enter into similar supply agreements with other soybean farmers
      in
      the PRC.





**The
      Supplier of “Yanglin” Soybean Seeds**





Heilongjiang
      Yanglin Group Seed Co, Ltd. is owned and managed by Mr. Shulin Liu, our chief
      executive officer.




-9-




Heilongjiang
      Yanglin Group Seed Co., Ltd has developed several strains of non-genetically
      modified soybean seeds (collectively, “Yanglin” seeds”). The Yanglin “East Nong
      42” and the “Black Nong 44” boast high protein and fat content. It has also
      developed the high oil content “Yang 02-01”, “Yang 03-02” and “Yang 03-03”
soybean seeds, the high protein content “Yang 03-656” soybean seeds and the high
      protein and high yielding “Yang 03-149” soybean seeds.





A
      brief
      summary of the characteristics of each strain of soybean seed is set forth
      below:





Soybean
            
            Oil Content
            
            Protein Content
            
            Status of Development“East
                Nong 42”
            
            19.33%
            
            45%
                - 46.4%
            
            Completed“Black
                Nong 44”
            
            21.56%
                - 22.61%
            
            38.56%
                - 46.69%
            
            Completed“Yang
                02-01” (high oil)
            
            22.3%-22.6%
            
            37.8%-40.2%
            
            Received
                governmental approval“Yang
                03-02” (high oil)
            
            21.9%-22.7%
            
            37.2%-41.5%
            
            In
                trial phase“Yang
                03-03” (high protein)
            
            21.7%-22.1%
            
            38.4%-45.9%
            
            In
                trial phase“Yang
                03-656” (high protein)
            
            19.8%-20.6%
            
            39.7%-45.3%
            
            In
                trial phase“Yang
                03-149” (high protein)
            
            20.3%-21.9%
            
            41.5%-44.7%
            
            In
                trail phase





**Major
      Customers**





Our
      customers are primarily distributors of soybean oil and soybean meal, with
      some
      of them being soybean food processors and animal feed manufacturers. The
      following is a list of our top ten major customers for fiscal year 2007. All
      of
      our major customers are located in the PRC.





**Customers**
            
            **Type of Product**
            
            **Fiscal 2007 Sales**
              **(USD)**
            
            **% of Total Sales**
              **(%)**Yingkou Bohai
                Grease Industrial Co. Ltd.
            
            Soybean
                Oil
            
            
            15,705,039.65
            
            
            10.1
            %Wang
                Chunyu
            
            Soybean
                Meal
            
            
            5,290,261.11
            
            
            3.4
            %Huang
                Zujian
            
            Soybean
                Meal
            
            
            5,184,750.61
            
            
            3.3
            %Tongliao
                Hongzhan Animal Feed Factory
            
            Soybean
                Meal
            
            
            4,553,189.66
            
            
            2.9
            %Wang
                Linli
            
            Soybean
                Meal
            
            
            4,233,973.89
            
            
            2.7
            %Gu
                Changchun
            
            Soybean
                Meal
            
            
            3,764,879.43
            
            
            2.4
            %Wang
                Xihe
            
            Soybean
                Meal
            
            
            3,669,944.96
            
            
            2.4
            %Li
                Yuqiu
            
            Soybean
                Meal
            
            
            3,666,983.30
            
            
            2.4
            %Li
                Zhengqian
            
            Soybean
                Meal
            
            
            3,407,444.15
            
            
            2.2
            %Yu
                Guanghai
            
            Soybean
                Meal
            
            
            3,379,734.87
            
            
            2.2
            %





*Note:
      the amounts are converted from RMB value using the yearly average rate of 2007,
      1USD = 7.6172RMB.*





Our
      sales
      are widely diversified among our customers. Our largest customer accounts for
      only 10.1 % of our total sales in fiscal 2007 while our top ten customers
      accounted for about 34 % of our net sales in fiscal 2007. As such, we are not
      dependent on any single customer and have accordingly maintained our bargaining
      position in relation to our customers. Holding such a diversified customer
      base,
      we have mitigated the commercial risk and associated impact of the loss of
      sales
      from any single customer. As we begin to expand our product offering to include
      “high end” soybean products, our customer base will accordingly change to
      include more industrial users and some retail consumers.




**Sales
      of Products by Type and Locations**





The
      following table shows the breakdown of sales volume by customer
      type.




**Salad Oil**
              
              **Soy Oil**
              
              **Soy Meal****Type**
              
              **Volume**
                **(Tonnes)**
              ****
              **Number**
                **of**
                **customers**
              ****
              **%**
              ****
              **Volume**
                **(****Tonnes)**
              ****
              **Number**
                **of**
                **customers**
              ****
              **%**
              ****
              **Volume**
                **(Tonnes)**
              ****
              **Number**
                **of**
                **customers**
              ****
              **%**Distributor
              
              
              14,898
              
              
              71
              
              
              98
              
              
              48,080
              
              
              85
              
              
              97
              
              
              287,740
              
              
              85
              
              
              90Food
                  Manufacturer
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,877
              
              
              8
              
              
              0.9Animal
                  Feed Manufacturer
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              25,576
              
              
              14
              
              
              8Others
              
              
              309
              
              
              5
              
              
              2
              
              
              1,486
              
              
              8
              
              
              3
              
              
              3,513
              
              
              4
              
              
              1.1Total
              
              
              15,207
              
              
              76
              
              
              100
              
              
              49,566
              
              
              93
              
              
              100
              
              
              319,706
              
              
              111
              
              
              100




-10-




All
      our
      sales are primarily made to customers within the PRC, though some of our
      products may be exported by some of the distributors to countries such as Japan,
      Korea, Russia and India. The geographical distribution of our sales in the
      PRC
      for fiscal 2007 is shown below.





**Sales Revenue (Salad Oil)**
            
            **Sales Revenue (Soybean Oil)**
            
            **Sales Revenue (Soybean**
              **Meal)****Province**
            
            **Volume**
              **(Tonnes)**
            
            **Value (USD)**
            
            **Volume**
              **(Tonnes)**
            
            **Value (USD)**
            
            **Volume**
              **(Tonnes)**
            
            **Value (USD)**Heilongjiang
            
            
            13,686
            
            
            14,014,298.24
            
            
            29,752
            
            
            28,254,752.43
            
            
            35,970
            
            
            10,414,262.27Jilin
            
            
            1,521
            
            
            1,557,485.58
            
            
            17,355
            
            
            16,481,622.36
            
            
            36,936
            
            
            10,693,944.71Liaoning
            
            
            
            
            
            
            
            
            2,459
            
            
            2,335,265.89
            
            
            64,841
            
            
            18,773,177.10Inner
                Mongolia
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            8,999
            
            
            2,605,447.49Beijing
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            9,994
            
            
            2,893,526.19Tianjin
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            9,598
            
            
            2,778,873.76Shandong
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            15,987
            
            
            4,628,657.52Shanxi
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            15,789
            
            
            4,571,331.31Henan
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            14,798
            
            
            4,284,410.71Sha’anxi
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            9,591
            
            
            2,776,847.08Gansu
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10,285
            
            
            2,977,778.36Guangxi
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            17,987
            
            
            5,207,710.19Sichuan
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            18,976
            
            
            5,494,051.74Hebei
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            49,955
            
            
            14,463,424.53




*Note:
      the amounts are converted from RMB value using the yearly average rate of 2007,
      1USD = 7.6172RMB.*





**Our
      Competitors**





Our
      competitors are the non-genetically modified soybean processors operating in
      the
      PRC. Our main competitor is Heilongjiang 93 Oil and Fat Co., Ltd., an integrated
      state-owned enterprise which is located in Heilongjiang, Dalian and Tianjin.
      The
      rest of our competitors are smaller state-owned enterprises.





**Position**
            
            **Company**
            
            **Estimated Annual Non-GM**
              **Production Capacity**
              **(in Tonnes)**
            
            **Estimated**
              **Market Share**1
            
            Heilongjiang
              Jiushan 93 Group (SOE)
            
            
            600,000
            
            
            6.7
            %**2**
            
            **Yanglin
              Soybean Group, Ltd**
            
            
            **520,000**
            
            
            **5.0**
            **%**3
            
            Shandong
              Gaotang Lanshan Group (SOE)
            
            
            200,000
            
            
            2.2
            %4
            
            Henan
              Xuchang Vegetable Oil Company (SOE)
            
            
            100,000
            
            
            1.1
            %5
            
            Qitaihe
              City Nature Oil Company
            
            
            100,000
            
            
            1.1
            %6
            
            Shandong
              Guanxian Vegetable Oil Company
            
            
            100,000
            
            
            1.1
            %7
            
            Jiamusi
              Zhenda Company
            
            
            90,000
            
            
            1.0
            %





*Source:
      Information from respective companies' websites and Yanglin
      estimates*





Generally
      speaking, we do not compete with companies that are engaged primarily in the
      manufacturing of genetically modified soybean products, especially those
      international agriculture conglomerates. Currently most major producers of
      genetically modified soybean products are state-owned enterprises and joint
      ventures of global agriculture companies. Their operations are mostly located
      in
      the coastal cities in Southern China, which enables them to conveniently import
      genetically modified soybean from US, Brazil, Argentina and other countries
      in
      bulk volume at acceptable price. The market for their products is also mainly
      in
      the southern parts of China. Meanwhile our supply sources, production facilities
      and customers are mostly in Northern China, where there is abundant supply
      of
      non-genetically modified soybean. It is obvious that there is a geographical
      division between the market for genetically modified soybean products and that
      for non-genetically modified soybean products. Thus we state that generally
      speaking we do not have direct competition with genetically modified
      counterparts.




-11-




**Sales
      and Marketing**





Apart
      from our high product quality, our marketing efforts have also contributed
      to
      our success in PRC markets. Presently, our main method of selling our products
      is direct marketing, supplemented with indirect marketing. Given that we are
      located in the Heilongjiang province, we are in close proximity to our suppliers
      and customers, so it’s easier for us to deal with them directly (as opposed to
      going through the Dalian Commodities Exchange).





We
      have
      sales offices in more than 5 cities in the PRC with approximately 40 independent
      distributors spread over approximately 27 provinces. These provinces include
      locations in the northeastern, northwestern and southern regions of the PRC.
      Furthermore, we have a dedicated in-house sales team with approximately 10
      salespersons. Their duties include monitoring the soybean industry, collecting
      market and price information, developing and managing distributors, providing
      recommendations for our marketing and sales strategy and pricing policies,
      filling sales orders and after-sale services.





The
      following map illustrates the geographical coverage of our sales and
      distribution network within the PRC:











In
      addition to our direct marketing efforts in the PRC, and as part of our
      international expansion plans, we plan to appoint sales agents in North America,
      Europe, Russia, Japan, Korea and other countries in southeast Asia in the near
      future.





**Advertising**




We
      advertise our products through various forms of media, including billboards
      alongside highways. We are now building our own business website ( www.yanglin.com.cn ).




-12-




In
      addition, our marketing team develops and maintains a unified and distinctive
      image throughout all our corporate publicity materials, including our corporate
      billboard advertisements, media publicity and corporate branding.





**Publicity**




We
      hold
      an annual conference with the distributors and potential customers to promote
      our products. We regularly attend exhibitions in different regions to market
      our
      products, and plan to attend the Guangzhou Commodity Fair to promote our high
      end products when we begin to produce them. We plan to maintain and strengthen
      our existing customer relations through symposiums, guided tours of the company
      and direct correspondences that provide further information of our product
      offering. We will also strengthen communications with the relevant government
      departments in order to keep abreast of new policies and guidelines. This will
      enable us to adapt quickly to any changes, better seize business opportunities
      and develop new markets.





**Delivery
      of Products**




Approximately
      70 % of our products are transported to our customers by railways, thanks to
      our
      easy access to the PRC railroad network (see “ *Our
      Competitive Advantages* ”).
      The
      costs of transportation are borne by our customers and are pre-paid in advance
      ahead of delivery of the products. The remainder of our products is collected
      from our facilities by our customers.





**Pricing
      and Terms**




Prices
      of
      our products are determined based on the daily spot market price, which is
      determined by the average of ex-works prices of local producers and the
      quotation on commodities exchanges. We distinguish between long-term customers
      and short-term customers and provide rebate policies accordingly. Our short-term
      customers (typically customers we have been dealing with for less than a year)
      are required to pay us the full retail price in cash in advance of delivery
      of
      their ordered products. For our long-term customers, we may offer credit terms
      as well as certain preferential terms to them depending on the size of their
      orders. Since we are paid with cash in advance most of the time, there are
      almost no accounts receivables.





The
      current prices for our products, as of December 31, 2007 are: (including
      VAT)




**Products**
            
            **Price**
              **(USD/metric**
              **ton)**Soybean
                oil (Grade IV)
            
            $
            1,451Salad
                oil
            
            $
            1,533Soybean
                meal
            
            $
            472





Based
      on
      the basis exchange rate of 1US$ = 7.3046 RMB as published on the website of
      People’s Bank of China on December 28, 2007.




For
      the
      past three years, the price of soybean meal has been in the range of $246 per
      metric ton to $493 per metric ton (converted at the above mentioned foreign
      exchange rate published on the website of People’s Bank of China on December 28,
      2007; the same rate is used hereinafter). By comparison the price range of
      soybean oil has been in the range of $659 per metric ton to $1,451 per metric
      ton, while the price range of salad oil was from $746 per metric ton to $1,533
      per metric ton. The prices of our products are determined by taking into account
      the costs of labour as well as the seasonality of demand in the soybean market.
      Traditionally, our prices of our raw materials are lowest during the soybean
      harvest period between October and December. Our prices then peak from January
      to February because of the New Year and Spring Festival.




-13-




**Intellectual
      Property**





We
      have
      registered the following trademarks in the PRC, which are currently used for
      all
      our products:





**Trademark**
            
            **Country of**
              **Registration**
            
            **Class**
            
            **Registration**
              **Number**
            
            **Date of**
              **Registration**
            
            **Validity Period**“Yanglin”logo
            
            PRC
            
            
            [29
            ]
            
            1587278
            
            June
              14, 2001
            
            From
              June 14, 2001 to June 13, 2011“Yanglin”logo
            
            PRC
            
            
            [31
            ]
            
            1586742
            
            June
              14, 2001
            
            From
              June 14, 2001 to June 13, 2011





Class
      29
      is for meat, fish, poultry and game; meat extracts, preserved, dried and cooked
      fruits and vegetables; jellies, jams, fruit sauces; eggs, milk and milk
      products; edible oils and fats. Class 31 is for agricultural, horticultural
      and
      forestry products and grains not included in other classes; live animals, fresh
      fruits and vegetables; seeds, natural plants and flowers; foodstuffs for
      animals, malt.




**Employees**





Currently
      we have 466 employees, most of whom are involved in production and
      operations.





The
      functional breakdown of our full-time employees as at December 31, 2005, 2006
      and 2007 was:





FY2005
            
            FY2006
            
            FY2007Production
                and operations
            
            
            212
            
            
            291
            
            
            291Sales
            
            
            6
            
            
            10
            
            
            10Management
            
            
            30
            
            
            163
            
            
            165Total
                number of employees
            
            
            248
            
            
            464
            
            
            466





Along
      with staff incentive policies, we provide social security to every employee
      who
      signs a long term contract with us, and we have paid all social security fees
      as
      required by laws and regulations.





We
      have a
      system of periodic performance reviews that are conducted annually.





**Insurance**





We
      have
      the following insurance policies:





**Description of Policy**
            
            **Term**
            
            **Coverage ($)**
            
            **Premium ($)**
            
            **Insured**China
                Pacific Insurance Co., AAAH0300003307
            
            From
                Jan. 29, 2007 to Jan. 28, 2008
            
            30,327.72
            
            174.73
            
            The
                boiler of Factory No. 1China
                Dadi Insurance Co., PQZA200723010600000008
            
            From
                Jul. 10, 2007 to Jul. 9, 2008
            
            1,782,920.71
            
            2,396.77
            
            Workshop
                and Office Building of Factory No. 3China
                Dadi Insurance Co., PQZA200723010600000007
            
            From
                Jul. 10, 2007 to Jul. 10, 2008
            
            2,221,703.38
            
            2,986.62
            
            Machinery
                of Factory No. 3China
                Dadi Insurance Co., PQZA200723010600000008
            
            From
                Jul. 12, 2007 to Jul. 11, 2008
            
            260,319.11
            
            1,849.71
            
            The
                boiler of Factory No. 3China
                Pingan Insurance Co., 21900004601010700013
            
            From
                Sep. 29, 2007 to Sep. 29, 2008
            
            2,886,315.47
            
            4,157.20
            
            Machinery
                of Factory No. 1China
                Life Insurance Co.
            
            From
                Jun. 30, 2007 to May. 29, 2008
            
            -
            
            2,441.84
            
            The
                employees of the three factories





*Note:
      the amounts in the column Coverage are converted from RMB value using the year
      end rate of 2007, 1USD = 7.3141RMB, and those in the column Premium are
      converted from RMB value using the yearly average rate of 2007, 1USD =
      7.6172RMB.*




-14-




**Government
      Regulations**





We
      are
      subject to various government regulations, such as Food Sanitation Law,
      Environment Protection Law and Fire Prevention Law, and to national standards
      for food issued by the national Food and Drug Administration. We have obtained
      the Sanitation Admission certificate from the local Sanitation Bureau as well
      as
      the industrial production permit, and our facilities are regularly inspected
      by
      local authorities.




In
      addition, we have been issued an ISO 9001-2000 Certificate by the Beijing
      Zhongjing Kehuan Quality Authorization Co. Ltd and a Certificate of Class A
      Green Food by the China Center of Development of Green Food.





**Environmental
      Compliance**





We
      are
      subject to the PRC environmental laws, rules and regulations governing our
      type
      of manufacturing facility. We have complied with the prescribed standard of
      environmental protection as evidenced by a certificate issued by the Jixian
      Environment Protection Bureau dated February, 2007.





The
      treatment of our waste water is subject to the PRC Environment Protection Law.
      Our process of treating waste water meets the strict requirement of this law.




-15-




**Item
      1A. Risk Factors**





**Cautionary
      Statement Regarding Future Results, Forward-Looking Information And Certain
      Important Factors**





In
      this
      report we make, and from time to time we otherwise make, written and oral
      statements regarding our business and prospects, such as projections of future
      performance, statements of management’s plans and objectives, forecasts of
      market trends, and other matters that are forward-looking statements ..
      Statements containing the words or phrases “will likely result,” “are expected
      to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,”
“expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,”
“should” or similar expressions identify forward-looking statements, which may
      appear in documents, reports, filings with the Securities and Exchange
      Commission, news releases, written or oral presentations made by officers or
      other representatives made by us to analysts, stockholders, investors, news
      organizations and others, and discussions with management and other of our
      representatives.




-16-




Our
      future results, including results related to forward-looking statements, involve
      a number of risks and uncertainties. No assurance can be given that the results
      reflected in any forward-looking statements will be achieved. Any
      forward-looking statement speaks only as of the date on which such statement
      is
      made. Our forward-looking statements are based upon assumptions that are
      sometimes based upon estimates, data, communications and other information
      from
      suppliers, government agencies and other sources that may be subject to
      revision. Except as required by law, we do not undertake any obligation to
      update or keep current either (i) any forward-looking statement to reflect
      events or circumstances arising after the date of such statement, or
      (ii) the important factors that could cause our future results to differ
      materially from historical results or trends, results anticipated or planned
      by
      us, or which are reflected from time to time in any forward-looking
      statement.





We
      face
      special risks for doing business in China. We face the risk of changes in the
      policies of the PRC government, the risk of recent PRC regulations restricting
      the establishment of offshore companies by PRC residents, the risk of
      ineffective contractual control of Yanglin, the risk of uncertain legal
      environment in China, the risk of substantial influence by the PRC government
      over the manner we conduct our business activities, the risk of inflation in
      China, the risk of restrictions on currency exchange, the risk of fluctuation
      of
      Renminbi exchange rate, the risk of distribution our assets upon liquidation,
      the risk of being treated as a resident enterprise for PRC tax purposes, the
      risk of limited business insurance coverage, and the risk of future outbreaks
      of
      SARS and Avain Flu in China.





In
      addition to other matters identified or described by us from time to time in
      filings with the SEC, there are several important factors that could cause
      our
      future results to differ materially from historical results or trends, results
      anticipated or planned by us, or results that are reflected from time to time
      in
      any forward-looking statement. Some of these important factors, but not
      necessarily all important factors, include the following:




**Risks
      Related To Our Business**





**Our
      raw material supply is vulnerable to natural disasters, which could severely
      disrupt the normal operation of our business and therefore adversely affect
      our
      business.**





As
      soybeans are our main raw materials and most of our soybeans are grown in and
      obtained from farmers in the Heilongjiang province, natural disasters such
      as
      drought, earthquakes, floods, and heavy rains in Heilongjiang may lead to a
      shortage in our supply of soybeans and result in soybean price increases, and
      consequently adversely affect our operations.





**Our
      efforts to manufacture value added products may not be
      successful.**





In
      order
      to grow our business and achieve higher profit margins, we have begun to
      construct new plants and add new equipment to manufacture value added products
      such as high-grade oil, protein concentrate, textured protein, powdered oil,
      etc. If the consumers do not accept our new products, the market for such
      products has not fully developed, or we do not have experienced sales personnel
      to market such products, we may not achieve the result as we expect and our
      business operation and financial conditions may be adversely affected.





**Soybean
      prices fluctuate greatly. This may adversely affect our
      operations.**





As
      a
      commodity, soybeans are subject to the price fluctuation of the commodity market
      in China and indirectly to the international commodity market. For example,
      the
      soybean price went up from RMB 1.23 per 500 grams at the beginning of the last
      year to RMB2.13 per 500 grams at the end of 2007, and in early March 2008 it
      has
      climbed to as high as RMB 2.75 per 500 grams, due to both the shortage in
      soybean supply caused by a severe drought in 2007 and farmers’ cutting growing
      areas of soybeans brought by the continuously low price level by the end of
      2006. If the soybean price increases significantly, we may have a problem caused
      by increased demand on working capital to satisfy the raw materials needs of
      our
      operations.





**Our
      full capacity may be reached soon. Our growth may be impacted if we could
      not expand our capacity in the near future.**





The
      designed capacity of our facilities is 520,000 tons per year and the maximum
      utilization rate for our industry is approximately 90%. We processed 385,000
      tons of soybean in 2007 and we expect to process about 420,000 tons in 2008.
      We
      will soon need additional capacity to grow our business. If we are not able
      to
      build or acquire new facilities in 2009, the growth of our business maybe
      adversely affected.




-17-




**We
      do not have long-term soybean supply contracts, which could have a material
      adverse effect on us.**





Currently,
      we source about 70% of our raw materials from farmers with whom we have a long
      term relationship and about 30% from intermediaries who purchase directly from
      other farmers. However, we do not have long term contracts with the farmers
      or
      the intermediaries. All current supply contracts with the soybean farmers are
      one-year contracts without fixed prices. Therefore, we may not be able to
      control supply risks. Any significant fluctuation in price of our raw materials
      could have a material adverse effect on the manufacturing cost of our products.





We
      have
      tried to mitigate the risks by paying attractive premium to those farmers who
      will purchase “Yanglin” soybean seeds, cultivate and plant them and then sell
      the soybeans to us in order to guarantee our soybean supplies. However, if
      our
      competitors also pay premium or even pay higher premium to attract the
      suppliers, we may lose our advantage in purchasing price and lose some of the
      soybean supplies.





**The
      soybean price is largely beyond our control in addition to natural disaster
      or
      supply competition.**





The
      soybean price may also be affected by other factors in addition to natural
      disaster or supply competition, such as global commodity price increase,
      government control or suppliers’ financial difficulties. We may have limited
      options in the short-term for alternative supply if our suppliers fail for
      any
      reason, including suppliers’ business failure or financial difficulties to
      continue the supply of raw materials. Moreover, identifying and accessing
      alternative sources may increase our costs. Although raw materials are generally
      available and we have not experienced any raw material shortage in the past,
      we
      cannot assure that the necessary materials will continue to be available to
      us
      at prices currently in effect or acceptable to us.





**Some
      of our land may be reclaimed by the government and this may materially impact
      our operations.**





Most
      land
      in China is state-owned and land use rights may be granted, transferred, leased
      or allocated. Allocated land use rights are generally provided by the government
      for an indefinite period (usually to state-owned entities) and cannot be
      pledged, mortgaged, leased, or transferred by the user. As the same time,
      allocated land can be reclaimed by the government at any time. The lands
      occupied by Factory No. 1 and No. 2 is allocated land and accordingly subject
      to
      the risk of being reclaimed. We are in the process of applying for the land
      use
      rights over Factory No. 2 to be changed to transferred. Although the risk being
      reclaimed is very small because the government is encouraging the growth of
      our
      industry and in general the market economy system and will continue to support
      our business, we cannot guarantee the land will not be reclaimed in the
      future.





**We
      may lose our advantages if there is emergence of new production technologies
      for
      other competitors.**





Our
      business is dependent on our ability to utilize current technologies to produce
      high quality products with low cost. Currently, we employ advanced technologies
      now available in our manufacturing process. However, newer and better
      manufacturing technologies may emerge. If we are unable to adapt the production
      processes to newer and more efficient manufacturing technologies that may be
      used by our competitors to manufacture products that are of higher quality
      or at
      a lower cost, we may lose market share and our financial performance may be
      adversely affected because we do not have the financial resources to build
      new
      facilities using such new technologies.




**Our
      manufacturing process is highly dangerous, which could cause adverse effects
      on
      our operation.**




In
      our
      manufacturing process, we use highly inflammable and explosive chemical
      solutions. Therefore, fires and explosions could occur, which could cause delay
      in our production, damages to our facilities and injuries to our
      workers.





**We
      receive a significant portion of our revenues from a small number of customers.
      Our business will be harmed if our main customers reduce their orders from
      us.**





Our
      customers mainly comprise approximately 40 distributors of soybean oil and
      other
      soybean products, as well as soybean food product and animal feed manufacturers.
      Although our sales are widely diversified among our customers and our largest
      customer accounts for only 10% of our total sales, our top ten customers
      accounted for about 34% of our net sales in fiscal 2007. Dependence on a few
      customers could make it difficult to negotiate attractive prices for our
      products and could expose us to the risk of substantial losses if a single
      dominant customer ceases purchasing. If we lose any customers and are unable
      to
      replace them with other customers that would purchase a similar amount of our
      products, our revenues and net income would decline considerably.




-18-




**Our
      product delivery is dependent upon the efficiency of the rail system and any
      disruption in the services or increase in transportation costs will have a
      material adverse impact on our operations.**





Approximately
      70% of our products are transported to our customers by rail. We are largely
      dependent upon the efficiency of China’s rail system and network to deliver our
      products. Any disruption of their service will largely impact our ability to
      fulfill our orders on a timely basis and recognize revenue. Also any increase
      in
      transportation costs may deter our customers and lead them to source products
      from other nearby suppliers, thus negatively affecting our sales.





**Potential
      environmental liability could have a material adverse effect on our operations
      and financial condition.**





To
      the
      knowledge of management, we have complied with the prescribed standard of
      environment protection as evidenced by a certificate issued by the government.
      Although it has not been alleged by government officials that we have violated
      any current environmental regulations, we cannot assure that the government
      will
      not amend the current environmental protection laws and regulations. Our
      business and operating results may be materially and adversely affected if
      we
      were to be held liable for violating existing environmental regulations or
      if we
      were to increase expenditures to comply with environmental regulations affecting
      our operations.





**Inadequate
      funding for our capital expenditure may affect our growth strategy and
      profitability.**




Our
      continued growth depends upon our ability to raise capital from outside sources.
      To maintain our profitability, we should increase the efficiency and achieve
      economies of scale in production of those low-margin products, and at the same
      time to develop those high-margin profit products. Adequate funding is needed
      to
      expand the production scale or develop new products. However, adequate funding
      is dependent upon a number of factors, including but without limitation the
      nation’s or the world’s economy, our business condition, the financial
      environment as well as the relevant legal environment. If we are unable to
      obtain sufficient financing, our growth and profitability may be adversely
      limited.





**The
      sales price fluctuation for our products is periodic, which could affect on
      our
      financial results.**





The
      prices of our products vary seasonably, among others, by the change of soybean
      supply and demand. Usually, our prices are lowest during the soybean harvest
      time between October and December and on the peak from January to February
      because of the New Year and Spring Festival. However, the price also subject
      to
      other conditions. As a result, we believe that period-to-period comparisons
      of
      our historical results of businesses are not necessarily meaningful and that
      you
      should not rely on them as an indication for future performance. It is also
      possible that our quarterly results of operations may be below the expectations
      of public market analysts and investors.




**Risks
      Related To Our Management and Internal Control**




**It
      will probably cost us a long time to establish adequate management and internal
      controls. As a result, there may be some operation risks with respect to our
      business management.**





We
      are
      constantly striving to establish and improve our business management and
      internal accounting control to forecast, budget and allocate our funds. However,
      as a Chinese company that has just become a US public company, it is difficult
      for us to hire and retain a sufficient number of qualified employees of
      management and internal control in a short period. It will also probably take
      us
      a long time to educate our employees about the internal control. As a result,
      we
      may experience difficulty in collecting financial data and preparing financial
      statements, books of account and corporate records, and instituting business
      practices that meet international standards in a short period.





The
      following is a description of each deficiency or weakness with respect to our
      internal controls over financial reporting identified by our outside
      auditors.





1)
            The
                Company has not formulated a complete Code of Conduct applicable
                to all
                staff, with Chinese and English version, defining acceptable business
                conduct, conflict of interests and other expected moral behavior,
                and
                including anti-fraud mechanism. Also the procedure ruling the drafting,
                revision, reviewing, approval and issue of the Code should be formulated.
                Besides, no formal system has been set up for reporting of
                fraud.





2)
            The
                Company does not have a formal system for employees to report and
                expose
                fraud.





3)
            The
                Company currently does not have a complete set of Articles for the
                board
                of directors. The Company now does not have any independent director.





4)
            The
                special committees of the board, including audit committee, appointment
                committee and compensation committee, have not been
                established.





5)
            The
                Company does not have an accounting policy manual based on U.S. GAAP
                and
                have not formulated formal procedures on the accounting treatment
                of
                significant transactions and processes.





6)
            The
                Company does not have a formal procedure on review, update and approval
                of
                the management procedures.





Because
      of the above-referenced deficiencies and weaknesses in our disclosure controls
      and procedures and internal control over financial reporting, we may be unable
      to to comply with the Sarbanes-Oxley Act’s internal controls requirements, and
      therefore may not be able to obtain the independent auditor certifications
      that
      the Sarbanes-Oxley Act requires publicly-traded companies to
      obtain.





**We
      depend on key personnel for our business operations, whose discontinuance could
      incur our high replacement cost.**





Our
      future success depends substantially on the continued services of our executive
      officers, especially Mr. Shulin Liu, our chairman and chief executive officer,
      Mr. Zhongtai Guo, chief operating officer, and Mr. Shaocheng Xu, chief financial
      officer. If one or more of our key executive officers are unable or unwilling
      to
      continue in their present positions, we may not be able to replace them readily,
      if at all. Therefore, our business may be severely disrupted, and we may incur
      additional expenses and take additional time to recruit and retain new
      officers.




-19-




**We
      may not be able to effectively protect our proprietary rights, which could
      harm
      our business and competitive position.**




Our
      success depends, in part, on our ability to protect our proprietary rights.
      At
      present, we have registered the trademarks for “Yanglin” logo in China which are
      currently used for all our products. We cannot assure you that we will be able
      to effectively protect our trademarks in the future. Currently, implementation
      of PRC intellectual property-related laws has historically been lacking,
      primarily because of ambiguities in the PRC laws and difficulties in
      enforcement. Accordingly, intellectual property rights and confidentiality
      protections in the PRC may not be as effective as in the United States
      or other developed countries. Policing unauthorized use of proprietary
      technology is difficult and expensive, and we might need to resort to litigation
      to enforce our rights or defend us, or to determine the enforceability, scope
      and validity of our proprietary rights or those of others. Such litigation
      may
      require significant expenditure of cash and management efforts and could harm
      our business, financial condition and results of operations. An adverse
      determination in any such litigation will impair our intellectual property
      rights and may harm our business, competitive position, business prospects
      and
      reputation.




**We
      may be exposed to intellectual property infringement and other claims by third
      parties, which, if successful, could cause us to pay significant damage awards
      and incur other costs.**





While
      we
      believe that the technology we use is not protected by any patent or
      intellectual property rights, we face the risk of being the subject of
      intellectual property infringement claims. The validity and scope of claims
      relating to the manufacturing of soybean products may involve complex technical,
      legal and factual questions and analysis and, therefore, may be highly
      uncertain. The defense and prosecution of intellectual property suits, patent
      opposition proceedings and related legal and administrative proceedings can
      be
      both costly and time consuming and may significantly divert the efforts and
      resources of our technical and management personnel. An adverse determination
      in
      any such litigation or proceedings to which we may become a party could subject
      us to significant liability, including damage awards to third parties, require
      us to seek licenses from third parties, to pay ongoing royalties, or to redesign
      our products or subject us to injunctions preventing the manufacture and sale
      of
      our products. Protracted litigation could also result in our customers or
      potential customers deferring or limiting their purchase or use of our products
      until resolution of such litigation. Further, we do not have adequate product
      liability insurance coverage against defective products as our products are
      manufactured according to fairly basic formulas. Any disputes so far have been
      resolved through friendly negotiations. There is no guarantee that we will
      not
      be involved in any legal proceedings should such negotiations fail one
      day.




**Risks
      Related to Our Expansion**





**We
      give no assurances that any plans for future expansion will be implemented
      or
      that they will be successful.**





While
      we
      have expansion plans, which include manufacturing “deep-processed” and refined
      soybean products, expanding our production lines and expanding our sales, there
      is no guarantee that such plans will be implemented or that they will be
      successful. These plans are subject to, among other things, the feasibility
      to
      meet the challenges we face, our ability to arrange for sufficient funding
      for
      more manufacturing facilities and the increasing working capital and the ability
      to hire qualified and capable employees to carry out these expansion
      plans.





**Our
      personnel may not effectively support our growth and therefore impeding the
      expansion plan.**





We
      currently have sufficient experienced and skilled employees for our business
      operations. But if our business and markets grow and develop, it will be
      necessary for us to expand our operation in an orderly fashion, which will
      put
      added pressure on our management and operational infrastructure. We may not
      have
      the requisite experience to manage and operate a larger, more modern
      manufacturing plant and bigger production lines. In addition, we may face
      challenges in product offerings and in integrating acquired businesses. These
      events would increase demands on our existing management, workforce and
      facilities. Failure to satisfy these increased demands could interrupt or
      adversely affect our operations and cause production backlogs, longer product
      development time frames and administrative inefficiencies.





**We
      may not able to increase our sources for soybean supply. As a result, we may
      not
      support our plan to increase production.**





In
      order
      to increase our raw material supplies, we intend to expand our soybean supply
      area through development of additional farmland soybean agreements, which in
      turn will be accomplished through contract negotiations with private farmers
      and
      cooperation with state-owned farms. However, it is difficult to obtain access
      to
      farmlands from private farmers or state-owned farms. If we cannot expand the
      soybean supply area, we may not be able to increase the supplies of the soybean
      and our plan to increase soybean production.




-20-




**We
      may have difficulty to expand our sales network in domestic market or to explore
      new overseas market.**




We
      intend
      to intensify our marketing efforts in the PRC by expanding existing sales and
      marketing network coverage to reach more areas by establishing more sales
      offices within the PRC and maybe in other countries such as Singapore, Malaysia,
      Canada and the United States. However, overseas consumers may not accept the
      value of non-generically modified soybean products and would not like to pay
      the
      premium of it. It also may be difficult to expand the sales channels in China’s
      markets if we are unable to advertise our products through various forms of
      media. But the advertising in commercial magazines, popular newspapers or over
      the internet will enhance our sales costs.





**Our
      acquisition plan may not succeed, which will adversely affect our overall
      expansion plan.**





We
      plan
      to expand our production facilities through the acquisition of approximately
      3
      to 4 additional factories, which can increase our current annual soybean
      production capacity up to about 1.5 million tons of soybeans over the next
      3
      years. However, it will be difficult for us to negotiate the acquisition with
      those factories, who may bargain for higher acquiring prices. Additionally,
      the
      acquisition will be submitted to the government for approval. That process
      may
      increase the risk of the acquisition failure or increase our acquisition cost,
      which decreases the value of the acquisition. If our acquisition fails, it
      will
      block our overall expansion plan.




**Risks
      Related To Our Industry**




**China’s
      commitments to the World Trade Organization may intensify
      competition.** **





In
      connection with its accession to the World Trade Organization, China made many
      commitments including opening its markets to foreign products, allowing foreign
      companies to conduct distribution business and reducing customs duties. Foreign
      manufacturers may begin to manufacture non-genetically modified soybean products
      and ship their products or establish manufacturing facilities in China.
      Competition from foreign companies may reduce profit margins and hence our
      business results would suffer.





**If
      the substitute products for soybean oil increase, we may lose our market share
      of soybean oil market.**





Substitute
      products for soybean oil, such as vegetable oil of peanut and palm oil could
      increase the intensity of competition faced by us. With the appearance of
      substitute products for soybean oil, consumers have more choices. Part of
      consumers may prefer vegetable oil. As a result, we may lose our market share
      of
      soybean oil market.





**If
      we are not be able to maintain competitive in non-genetically modified soybean
      product business, we may not achieve sufficient product
      revenues.**





At
      present, we are the largest and most integrated private non-genetically modified
      soybean producer in China. Our products compete with a multitude of products
      developed, manufactured and marketed by others and we expect competition from
      new market entrants in the future. Our current competitors are the other
      domestic non-genetically modified soybean companies and global manufacturers
      who
      may enter the non-genetically modified soybean business. Although currently
      we
      view ourselves in a favorable position, we may not remain competitive if
      existing or future competing products may provide better quality, greater
      utility, lower cost or other benefits from their intended uses than our
      products, or may offer comparable performance at lower cost. If our products
      fail to capture and maintain market share, we may not achieve sufficient product
      revenues, and our business would suffer.





**The
      inability of the PRC government to keep the PRC a genetically modified-free
      soybean zone will remove our competitive edge and negatively impact our
      operations.**





We
      distinguish ourselves from our competitors in that we manufacture and sell
      non-genetically modified soybean products. Because the PRC is a non-genetically
      modified soybean growing zone, our competitors are not the large, better
      capitalized producers of genetically modified soybean products. The PRC has
      one
      of the strictest bio-safety regulations in the world, requiring safety
      certificates and labeling of genetically modified products. However, with so
      much genetically modified soybeans being imported into the country, there is
      a
      question as to whether the PRC is able to keep it a genetically modified-free
      soybean zone. If the PRC is unsuccessful in keeping the PRC a genetically
      modified-free soybean zone and our soybeans are tainted through pollination,
      we
      will lose our competition edge and this would adversely affect our
      operations.




-21-





**Our
      failure to comply with ongoing governmental regulations could hurt our
      operations and reduce our market share** ***.***





In
      China,
      the food industry is undergoing increasing regulations as environmental
      awareness increases in China. The trend is that the Chinese government toughens
      its regulations and penalties for violations of environmental regulations.
      New
      regulatory actions are constantly changing our industry. Although we believe
      we
      have complied with applicable government regulations, there is no assurance
      that
      we will be able to do so in the future.




**Risks
      Related To Doing Business In China**





**We
      face the risk that changes in the policies of the PRC government could have
      a
      significant impact upon the business we may be able to conduct in the PRC and
      the profitability of such business.**





All
      of
      our business operations are conducted in China. Accordingly, our business,
      financial condition, results of operations and prospects are affected
      significantly by economic, political and legal developments in China. The
      Chinese economy differs from the economies of most developed countries in many
      respects, including level of government involvement in economic activities,
      stage of national development, and control of foreign exchange.





While
      the
      Chinese economy has grown significantly in the past 20 years, the growth
      has been uneven, both geographically and among various sectors of the economy.
      Policies of the PRC government can have significant effects on the economic
      conditions of the PRC. The PRC government has confirmed that economic
      development will follow the model of a market economy. Under this direction,
      we
      believe that the PRC will continue to strengthen its economic and trading
      relationships with foreign countries and business development in the PRC will
      follow market forces. While we believe that this trend will continue, we cannot
      assure you that this will be the case. A change in policies by the PRC
      government could adversely affect our interests by, among other factors: changes
      in laws, regulations or the interpretation of laws and regulations, confiscatory
      taxation, restrictions on currency conversion, imports or sources of supplies,
      or the expropriation or nationalization of private enterprises. Although the
      PRC
      government has been pursuing economic reform policies for more than two decades,
      we cannot assure you that the government will continue to pursue such policies
      or that such policies may not be significantly altered, especially in the event
      of a change in leadership, social or political disruption, or other
      circumstances affecting the PRC’s political, economic and social
      life.




**Recent
        PRC regulations relating to the establishment of offshore companies by PRC
        residents may subject our PRC resident shareholders to personal liability
        and
        limit our ability to inject capital into our PRC subsidiaries, limit our
        subsidiaries’ ability to distribute profits to us or otherwise adversely affect
        us.**




China
      State Administration of Foreign Exchange, or the SAFE, issued a public circular
      on October 21, 2005 concerning the acquisition by an offshore company
      controlled by PRC residents of onshore assets in China. This circular requires
      that (1) a PRC resident shall register with a local branch of the SAFE
      before he or she establishes or controls an overseas special purpose vehicle,
      or
      SPV, for the purpose of overseas equity financing (including convertible debt
      financing); (2) when a PRC resident contributes the assets of or his or her
      equity interests in a domestic enterprise to an SPV, or engages in overseas
      financing after contributing assets or equity interests to an SPV, such PRC
      resident must register his or her interest in the SPV and any changes in such
      interest with a local branch of the SAFE; and (3) when the SPV undergoes a
      material change outside of China, such as a change in share capital or merger
      or
      acquisition, the PRC resident shall, within 30 days from the occurrence of
      the
      event that triggers the change, register such change with a local branch of
      the
      SAFE. Furthermore, PRC residents who are shareholders of SPVs established before
      November 1, 2005 are required to register with a local branch of the SAFE
      before March 31, 2006.




The
      beneficial owners of our company who are PRC residents are required to update
      their respective registrations with the local branch of the SAFE. However,
      we
      cannot assure you that these beneficial owners will update their registrations
      with the local branch of the SAFE in full compliance with the October 2005
      SAFE
      circular. The failure or inability of beneficial owners of our company who
      are
      resident in the PRC to comply with the registration procedures set forth in
      the
      October 2005 SAFE circular may subject these beneficial owners to fines and
      legal sanctions and may also limit our ability to contribute additional capital
      into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute
      dividends to us or otherwise adversely affect our business.




**Contractual
        arrangements through which we have established control of Yanglin may not
        be as
        effective in providing operational control as direct ownership. If Yanglin
        fails
        to perform its obligations under these contractual arrangements, we may have
        to
        legally enforce such arrangements and our business, financial condition and
        results of operations may be materially and adversely affected if these
        arrangements cannot be enforced.**




We
      rely
      on contractual arrangements with Yanglin and its shareholders for operating
      our
      business. These contractual arrangements may not be as effective in providing
      us
      with control over Yanglin as direct ownership.




Under
      the
      current contractual arrangements, as a legal matter, if Yanglin fails to perform
      its obligations under these contractual arrangements, we may have to
      (i) incur substantial costs and resources to enforce such arrangements, and
      (ii) rely on legal remedies under PRC law, which we cannot be sure would be
      effective.




These
      contractual arrangements are governed by PRC law and provide for the resolution
      of disputes through either arbitration or litigation in the PRC. Accordingly,
      these contracts would be interpreted in accordance with PRC law and any disputes
      would be resolved in accordance with PRC legal procedures. If Yanglin fails
      to
      perform its obligations under these contractual arrangements, we may have to
      rely on legal remedies under PRC law, including seeking specific performance
      or
      injunctive relief, and claiming damages, which we cannot be sure would be
      effective. In addition, the legal environment in the PRC is not as developed
      as
      in other jurisdictions, such as the United States. As a result, uncertainties
      in
      the PRC legal system could limit our ability to enforce these contractual
      arrangements. In the event that we are unable to enforce these contractual
      arrangements, our business, financial condition and results of operations could
      be materially and adversely affected.




**Our
      business is largely subject to the uncertain legal environment in China and
      your
      legal protection could be limited.** **





The
      Chinese legal system is a civil law system based on written statutes. Unlike
      common law systems, it is a system in which precedents set in earlier legal
      cases are not generally used. The overall effect of legislation enacted over
      the
      past 20 years has been to enhance the protections afforded to foreign invested
      enterprises in China. However, these laws, regulations and legal requirements
      are relatively recent and are evolving rapidly, and their interpretation and
      enforcement involves uncertainties. These uncertainties could limit the legal
      protections available to foreign investors, such as the right of foreign
      invested enterprises to hold licenses and permits such as requisite business
      licenses. In addition, all of our executive officers and our directors are
      residents of China, and substantially all the assets of these persons are
      located outside the U.S. As a result, it could be difficult for investors to
      effect service of process in the U.S., or to enforce a judgment obtained in
      the
      U.S. against us or any of these persons.




**You
        may experience difficulties in effecting service of legal process and enforcing
        judgments against us and our management in China.**




Substantially
      all of our assets and our subsidiaries are located in China. In addition, all
      of
      our directors and officers reside within China, including our certified public
      accountant (“CPA”), Albert Wong & Co. As a result, it may not be possible to
      effect service of process within the United States or elsewhere outside of
      China
      upon most of our directors and officers and our CPA, including with respect
      to
      matters arising under the U.S. federal securities laws or applicable state
      securities laws. Moreover, China is not a party to any treaties providing for
      reciprocal enforcement of judgments of courts with the United States or most
      other western jurisdictions. As a result, recognition and enforcement in China
      of judgments of a court in the United States or any other jurisdictions
      mentioned above in relation to any matter may be difficult or impossible. In
      addition, you will have difficulties in bring an original action in a Chinese
      court to enforce liabilities against our directors, officers and our CPA based
      upon the U.S. federal securities laws.





**The
      Chinese government exerts substantial influence over the manner in which we
      must
      conduct our business activities.** **





China
      only recently has permitted provincial and local economic autonomy and private
      economic activities. Chinese government has exercised and continues to exercise
      substantial control over virtually every sector of the Chinese economy through
      regulation and state ownership. Our ability to operate in China may be harmed
      by
      changes in its laws and regulations, including those relating to taxation,
      import and export tariffs, environmental regulations, land use rights, property
      and other matters. We believe that our operations in China are in material
      compliance with all applicable legal and regulatory requirements. However,
      the
      central or local governments of these jurisdictions may impose new, stricter
      regulations or interpretations of existing regulations that would require
      additional expenditures and efforts on our part to ensure our compliance with
      such regulations or interpretations. Accordingly, government actions in the
      future, including any decision not to continue to support recent economic
      reforms and to return to a more centrally planned economy, or regional or local
      variations in the implementation of economic policies, could have a significant
      effect on economic conditions in China or particular regions thereof, and could
      require us to divest ourselves of any interest we hold in Chinese
      properties.




-22-


**Inflation
      in China may inhibit our activity to conduct business in
      China.** ******





In
      recent
      years, the Chinese economy has experienced periods of rapid expansion and high
      rates of inflation. During the past ten years, the rate of inflation in China
      has been as high as 20.7% and as low as -2.2%. These factors have led to the
      adoption by Chinese government, from time to time, of various corrective
      measures designed to restrict the availability of credit or regulate growth
      and
      contain inflation. While inflation has been more moderate since 1995, high
      inflation may in the future cause Chinese government to impose controls on
      credit and/or prices, or to take other action, which could inhibit economic
      activity in China, and thereby harm the market for our products.




**Restrictions
      on currency exchange may limit our ability to receive and use our revenues
      effectively** ***.*** **





The
      majority of our revenues will be settled in Renminbi and U.S. Dollars, and
      any
      future restrictions on currency exchanges may limit our ability to use revenue
      generated in Renminbi to fund any future business activities outside China
      or to
      make dividend or other payments in U.S. dollars. Although the Chinese government
      introduced regulations in 1996 to allow greater convertibility of the Renminbi
      for current account transactions, significant restrictions still remain,
      including primarily the restriction that foreign-invested enterprises may only
      buy, sell or remit foreign currencies after providing valid commercial documents
      at those banks in China authorized to conduct foreign exchange business. In
      addition, conversion of Renminbi for capital account items, including direct
      investment and loans, is subject to governmental approval in China, and
      companies are required to open and maintain separate foreign exchange accounts
      for capital account items. We cannot be certain that the Chinese regulatory
      authorities will not impose more stringent restrictions on the convertibility
      of
      the Renminbi.





**The
      fluctuation of the Renminbi may materially and adversely affect your
      investment.**





The
      value
      of our common stock will be affected by the foreign exchange rate between U.S.
      dollars and Renminbi, and between those currencies and other currencies in
      which
      our sales may be denominated. For example, to the extent that we need to convert
      U.S. dollars into Renminbi for our operational needs and should the Renminbi
      appreciate against the U.S. dollar at that time, our financial position, the
      business of the company, and the price of our common stock may be harmed. If
      we
      decide to convert our Renminbi into U.S. dollars for the purpose of declaring
      dividends on our common stock or for other business purposes and the U.S. dollar
      appreciates against the Renminbi, the U.S. dollar equivalent of our earnings
      from our subsidiaries in China would be reduced.





**We
      may not be able to distribute our assets upon liquidation and dividend payment
      will be subject to restrictions under Chinese foreign exchange
      rule.**





Our
      assets are predominately located inside China. Under the laws governing foreign
      investment enterprises in China, dividend distribution and liquidation are
      allowed but subject to special procedures under the relevant laws and rules.
      Any
      dividend payment will be subject to the decision of the board of directors
      and
      subject to foreign exchange rules governing such repatriation. Any liquidation
      is subject to both the relevant government agency’s approval and supervision as
      well the foreign exchange control. This may generate additional risk for our
      investors in case of liquidation.




**We
      may be treated as a resident enterprise for PRC tax purposes as the Enterprise
      Income Tax Law became effective on January 1, 2008, which may subject us to
      PRC
      income tax for any dividends we receive from our subsidiaries and PRC income
      tax
      withholding for any dividends we pay to our non-PRC
      shareholders.**





The
      Enterprise Income Tax Law provides that enterprises established outside of
      China
      whose “de facto management bodies” are located in China are considered “resident
      enterprises” and will generally be subject to the uniform 25.0% enterprise
      income tax rate as to their global income, including income we receive from
      our
      subsidiaries. The term “de facto management bodies” is not defined under the
      Enterprise Income Tax Law and it is currently unclear in which situations a
      non-PRC enterprise’s “de facto management body” is located in China. All of our
      management is currently based in China, and if a majority of the members of
      our
      management team continue to be located in China after the effective date of
      the
      Enterprise Income Tax Law, we may be considered a PRC resident enterprise and
      therefore subject to PRC enterprise income tax at the rate of 25% on our
      worldwide income, which will include any dividend income we receive from our
      subsidiaries. If we are required under the Enterprise Income Tax Law to pay
      income tax for any dividends we receive from our subsidiaries, our revenues
      could decrease significantly.





**We
      have limited business insurance coverage in China, which could harm our
      business.**





We
      are
      exposed to many risks, including equipment failures, natural disasters,
      industrial accidents, power outages, and other business interruptions. We do
      not
      carry business interruption insurance and as a result, we may be required to
      pay
      for financial and other losses, damages and liabilities, including those caused
      by natural disasters and other events beyond our control, out of our own funds,
      which could have a material adverse effect on our business, financial condition
      and results of operations.





Our
      property and equipment insurance does not cover the full value of our property
      and equipment, which leaves us with exposure in the event of loss or damage
      to
      our properties or claims filed against us. We currently do not carry any
      product liability or other similar insurance. We cannot assure you that we
      would
      not face liability in the event of the failure of any of our products. This
      is
      particularly true given our plan to significantly expand our sales into
      international markets, like the United States, where product liability claims
      are more prevalent.





Except
      for property and automobile insurance, we do not have other insurance such
      as
      business liability or disruption insurance coverage for our operations in the
      PRC. We do not maintain a reserve fund for warranty or defective products
      claims. Our costs could substantially increase if we experience a significant
      number of warranty claims. We have not established any reserve funds for
      potential warranty claims since historically we have experienced few warranty
      claims for our products so that the costs associated with our warranty claims
      have been low. If we experience an increase in warranty claims significantly,
      it
      would have a material adverse effect on our financial condition and results
      of
      operations.




-23-




**Any
      future outbreak of severe acute respiratory syndrome or avian influenza in
      China, or similar adverse public health developments, may severely disrupt
      our
      business and operations.** ****





A
      renewed
      outbreak of severe acute respiratory syndrome, the Avian Flu or another
      widespread public health problem in China, where all of our manufacturing
      facilities are located and where all of our revenues are derived from, could
      have a negative effect on our operations. In addition, there have been confirmed
      human cases of avian influenza in PRC, Vietnam, Iraq, Thailand, Indonesia,
      Turkey, Cambodia and other countries which have proven fatal in some instances.
      If such an outbreak or any other similar epidemic were to spread in China,
      where
      our operations are located, it may adversely affect our business and operating
      results. Such an outbreak could have an impact on our operations as a result
      of
      quarantines or closures of our manufacturing facilities or the retail outlets,
      which would severely disrupt our operations, the sickness or death of our key
      officers and employees, and a general slowdown in the Chinese
      economy.





**Risks
      Related To The Market For Our Stock**




**Our
      Common Stocks subject to price volatility and may result in losses for
      investors.** ******





The
      stock
      market has experienced significant price and volume fluctuations that have
      particularly affected the trading prices of equity securities of many companies
      that have business operations exclusively in China. These fluctuations have
      often been unrelated or disproportionate to the operating performance of many
      of
      these companies. Any negative change in the public’s perception of these
      companies could decrease our stock price regardless of our operating results.
      The market price of our common stock has been and may continue to be volatile.
      We expect our stock price to be subject to fluctuations as a result of a variety
      of factors, including factors beyond our control.





These
      factors include without limitation actual or anticipated variations in our
      quarterly operating results, announcements of technological innovations or
      new
      products or services by us or our competitors, announcements relating to
      strategic relationships or acquisitions, additions or terminations of coverage
      of our common stock by securities analysts, statements by securities analysts
      regarding us or our industry, conditions or trends in the our industry, and
      changes in the economic performance and/or market valuations of other soybean
      product companies.





The
      prices at which our common stock trades will affect our ability to raise
      capital, which may have an adverse affect on our ability to fund our
      operations.





**Our
      common stock may be considered to be a “penny stock” and, as such, the market
      for our common stock may be further limited by certain SEC rules applicable
      to
      penny stocks.** ****





To
      the
      extent the price of our common stock remains below $5.00 per share or we have
      net tangible assets of $2,000,000 or less, our common shares will be subject
      to
      certain “penny stock” rules promulgated by the SEC. Those rules impose certain
      sales practice requirements on brokers who sell penny stock to persons other
      than established customers and accredited investors (generally institutions
      with
      assets in excess of $5,000,000 or individuals with net worth in excess of
      $1,000,000). For transactions covered by the penny stock rules, the broker
      must
      make a special suitability determination for the purchaser and receive the
      purchaser’s written consent to the transaction prior to the sale. Furthermore,
      the penny stock rules generally require, among other things, that brokers
      engaged in secondary trading of penny stocks provide customers with written
      disclosure documents, monthly statements of the market value of penny stocks,
      disclosure of the bid and asked prices, disclosure of the compensation to the
      brokerage firm, and disclosure of the sales person working for the brokerage
      firm. These rules and regulations adversely affect the ability of brokers to
      sell our common shares and limit the liquidity of our securities.





**We
      do not intend to pay cash dividends in the foreseeable
      future.** ****





We
      do not
      anticipate paying any cash dividends in the foreseeable future. We currently
      intend to retain all available funds and any future earnings for use in the
      operation and expansion of our business. In addition, the terms of any future
      debt or credit facility may preclude us from paying any dividends. As a result,
      capital appreciation, if any, of our common stock will be your sole source
      of
      potential gain in your investment for the foreseeable future.




-24-




**Our
      chief executive officer could exert significant influence over our significant
      corporate decisions and may act in a manner that advances his best interests
      and
      not necessarily those of other stockholders.** ****





Our
      Chief
      Executive Officer, Mr. Shulin Liu and his wife Mrs. Huanqin Ding, beneficially
      own approximately 91% of our common stock through their 100% holding in
      Winner State (BVI). As a result, Mr. Liu may be able to influence
      significantly the outcome of all matters requiring stockholder approval,
      including the election and removal of directors and any merger, consolidation,
      or sale of all or substantially all of our assets and he may act in a manner
      that advances his best interests and not necessarily those of other
      stockholders, including investors in this offering, by, among other things:
      delaying, deferring or preventing a change in control of us; entrenching our
      management and/or our board of directors; impeding a merger, consolidation,
      takeover or other business combination involving us; discouraging a potential
      acquirer from making a tender offer or otherwise attempting to obtain control
      of
      us; or causing us to enter into transactions or agreements that are not in
      the
      best interests of all stockholders.





**There
      is currently a very limited trading market for our common
      stock**





Our
      common stock is quoted on the over-the-counter Bulletin Board. However, our
      bid
      and asked quotations have not regularly appeared on the OTC Bulletin Board
      for
      any consistent period of time. There is no established trading market for our
      common stock and our common stock may never be included for trading on any
      stock
      exchange or through any other quotation system (including, without limitation,
      the NASDQ Stock Market). You may not be able to sell your shares due to the
      absence of a trading market.





**We
      will incur increased costs as a result of changes in laws and regulations
      relating to corporate governance matters.**





As
      a
      public reporting company, we will need to comply with the Sarbanes-Oxley Act
      of
      2002 and the related rules and regulations adopted by the SEC, including
      expanded disclosures, accelerated reporting requirements and more complex
      accounting rules. Compliance with Section 404 of the Sarbanes-Oxley Act of
      2002
      and other requirements will increase our costs and require additional management
      resources. Additionally, these laws and regulations could make it more difficult
      or more costly for us to obtain certain types of insurance, including director
      and officer liability insurance, and we may be forced to accept reduced policy
      limits and coverage or incur substantially higher costs to obtain the same
      or
      similar coverage. The impact of these events could also make it more difficult
      for us to attract and retain qualified persons to serve on our board of
      directors, our board committees or as executive officers. We are presently
      evaluating and monitoring developments with respect to these laws and
      regulations and cannot predict or estimate the amount or timing of additional
      costs we may incur to respond to their requirements.




**We
      may not be able to achieve and maintain an effective system of internal control
      over financial reporting, a failure which may prevent us from accurately
      reporting our financial results or detecting and preventing fraud.**





We
      will
      be subject to reporting obligations under the U.S. securities law. Beginning
      with our annual report on Form 10-K for the fiscal year ending December 31,
      2007, we will be required to prepare a management report on our internal control
      over financial reporting containing our management’s assessment of the
      effectiveness of our internal control over financial reporting. In addition,
      our
      independent registered public accounting firm must attest to and report on
      the
      effectiveness of our internal control over financial reporting. Our management
      may conclude that our internal controls over our financial reporting is not
      effective. Moreover, even if our management concludes that our internal control
      over financial reporting is effective our independent registered public
      accounting firm may still decline to attest to the effectiveness or may issue
      a
      report that is qualified if it is not satisfied with our controls or the level
      at which our controls are documented, designed, operated or reviewed, or if
      it
      interprets the relevant requirements differently from us. Our reporting
      obligations as a public company will place a significant strain on our
      management, operational and financial resources and systems for the foreseeable
      future.




**We
      may require additional capital, which may not be available on commercially
      reasonable terms, or at all.** ****





Capital
      raise through the sale of equity securities may result in dilution to our
      shareholders. The incurrence of indebtedness would result in increased debt
      service obligations and could result in operating and financing covenants that
      would restrict our operations. Financing may be unavailable in amounts or on
      terms acceptable to us, or at all. Failure to obtain such additional capital
      could have an adverse impact on our business strategies and growth
      prospects.




**Our
      future capital raising and the conversion of our outstanding shares of preferred
      stock and warrants may dilute our shareholders’ equities.**




If
      we
      need to obtain external financing, our capital raising could require us to
      sell
      additional equity or debt securities or obtain credit facilities. The sale
      of
      additional equity or equity-linked securities could result in additional
      dilution to our then existing shareholders. In addition the conversion of
      outstanding shares of preferred stock and exercise of warrants into common
      stock
      may dilute our then existing shareholders’ equities. Certain registration rights
      have been granted to holders of the preferred stock and warrants. Pursuant
      to
      the registration rights agreement, certain holders of the preferred stock and
      warrants have the demand rights to require us to register the shares common
      stock held by these holders. Therefore, as our existing shareholders, your
      share
      equities may be diluted upon the conversion of outstanding shares of preferred
      stock, exercise of warrants and sale of common stock pursuant to the
      registration rights agreement.





**Item
      1B. Unresolved Staff Comments**





Not
      applicable.




-25-




**ITEM
      2. Description of Properties** **Our
      Property**





We
      own
      and operate three soybean production factories in Jixian county in the
      Heilongjiang province. Our factories have a combined annual soybean processing
      capacity of 520,000 tons.





Factory
      No.1 manufactures salad oil, Grade IV soybean oil and soybean meal. Factory
      No.
      2 manufactures Grade IV soybean oil and soybean meal. Our newest facility,
      Factory No.3, which was built in 2005, manufactures Grade IV soybean oil,
      soybean meal and salad oil. Our new, high end products, including defatted
      soy
      powder, soy protein concentrates and textured protein, will be manufactured
      in
      Factory No. 2. Powdered soy oil will be produced in Factory No. 3. We have
      finished building the production lines for salad oil and squeezed oil and put
      them into operations in the last quarter of 2007.





The
      following tables indicate the land area and annual production capacity of our
      production facilities:




**Production**
              **Facility**
            
            **Area**
            
            **Capacity**Factory
                No. 1
            
            
            27,000
                m2
            
            
            100,000Factory
                No. 2
            
            
            43,572
                m2
            
            
            120,000Factory
                No. 3
            
            
            45,596
                m2
            
            
            300,000




**Annual**
              **Production**
              **Capacity for**
              **2006**
              **(Tonnes)**
            
            **Actual**
              **Output for**
              **2006**
              **(Tonnes)**
            
            **Utilization**
              **Rate for 2006**
            
            **Annual**
              **Production**
              **Capacity
                for**
              **2007**
              **(Tonnes)**
            
            **Actual**
              **Output
                for**
              **2007**
              **(Tonnes)**
            
            **Utilization**
              **Rate
                for 2007**520,000
            
            
            310,000
            
            
            59
            %
            
            520,000
            
            
            385,000
            
            
            74
            %





***Note*** *:
      The
      annual production capacity is based on 3 shifts (8 hours per shift) a day for
      300 days a year.*





We
      purchased the land use rights for the 45,596 m 2 of land
      of Factory No. 3. The land use rights for Factory No. 1 and No. 2 is allocated
      by the local government at minimal cost.





Our
      machinery and equipment for soybean processing include conveyor belt, sifting
      machines, dyers; steamer, crushers; flaking machines, extractors; distillers;
      packaging machines; containers, etc. Our machinery has been kept in good
      conditions and with property insurance coverage.




**Properties**





All
      land
      in the PRC is owned by the government and cannot be sold to any individual
      or
      entity. Instead, the government grants or allocates landholders a “land use
      right. There are four methods to acquire land use rights:





·
            grant
                of the right to use land;·
            assignment
                of the right to use land;





·
            lease
                of the right to use land; and·
            allocated
                land use rights.




In
      comparison with Western common law concepts, granted land use rights are similar
      to life estates and allocated land use rights are in some way similar to
      leaseholds.




Granted
      land use rights are provided by the government in exchange for a grant fee,
      and
      carry the rights to pledge, mortgage, lease, and transfer within the term of
      the
      grant. Land is granted for a fixed term - generally 70 years for residential
      use, 50 years for industrial use, and 40 years for commercial and other use.
      The
      term is renewable in theory. Unlike the usual case in Western nations, granted
      land must be used for the specific purpose for which it was
      granted.




Allocated
      land use rights are generally provided by the government for an indefinite
      period (usually to state-owned entities) and cannot be pledged, mortgaged,
      leased, or transferred by the user. Furthermore, allocated land can be reclaimed
      by the government at any time. Allocated land use rights may be converted into
      granted land use rights upon the payment of a grant fee to the
      government.




Yanglin
      has the following granted land use right:





Location
            
            Area
              (square
              meters)
            
            Construction
              on
                Land
            
            Term
                and
              Expiration
            
            Certificate
                No.Fuli
                Town Nongfeng Community
            
            45596
            
            Factory
                No. 3
            
            October
                9, 2005 - September 5, 2055
            
            JifuGuoYong(2005)No.
                178





Pursuant
      to Transfer Agreement of State-owned Land Use Right (No. 05002) which was signed
      between Yanglin and the Jixian County Land and Resources Bureau, the term of
      the
      land use right shall be 50 years. Yanglin paid RMB 8,161,684 (approximately
      $1,075,320.69) for the land use rights.





In
      addition to the abovementioned land use rights, Yanglin has the following leased
      land use right:





Lessor
            
            Location
            
            Area
                (square
              meters)
            
            Rental
                Fee
              (RMB)
            
            Construction
                on
              Land
            
            Term
                and
              ExpirationJixian
                Industrial Company
            
            Jixian
                County Hedong District
            
            27,000
            
            8,900,567
            
            Workshop,
                warehouse
            
            December
                4, 1999 - December 4, 2049Wansheng
                Village Commission
            
            Wansheng
                Village Oil Pump Station West, Daiban Dong Qiang
            
            3,844.6
            
            100,000
            
            Warehouse
            
            October
                19, 2003 - October 18, 2053Mr.Liu
                Fengyu
            
            Jian
                San Jiang Administration Daxing Farm 24 Group Nan.
            
            100
                acres
            
            1,100,000
            
            Farmland
            
            January
                1, 2005 - December 31, 2026Wansheng
                Village Commission
            
            From
                Hatong Road Bei Wansheng Village XinJian Muye to Yanglin Wansheng
                Food
                Collection Station
            
            30,887.41
            
            99,62.20
            
            Warehouse
            
            April
                1, 2004 - December 31, 2028




We
      have
      embarked on the process to convert the allotted land use rights for Factory
      No.
      1, Factory No. 2, Wansheng Village and Jiansan Farm into granted land use
      rights. The conversion will involve a payment of a “transfer fee” to the Jixian
      County Land Bureau.


Yanglin
      also owns the following buildings, comprising Factory No. 3:





Location
            
            Area
                (square
              meters)
            
            Nature
                of building
            
            Function
            
            CertificateBei
                No.4, Nongfeng Village (Factory No. 3)
            
            1658.46
            
            Private
                Asset
            
            Office,
                Boiler room, and garage
            
            Ji
                Fang Quan Zheng Fanrong Zi No. 00033652Bei
                No.4, Nongfeng Village ( Factory No. 3)
            
            9224.93
            
            Joint
                Stock House Asset
            
            Workshop
            
            Ji
                Fang Quan Zheng Fanrong Zi No. 00036015Factory
                No. 3
            
            1401.47
            
            Private
                Asset
            
            Boiler
                room
            
            Ji
                Fang Quan Zheng Fanrong Zi No. 00033653Hedong
                51A (Factory No. 1)
            
            5772
            
            Allotted
                state-owned houses
            
            Office,
                electricity distribution room, workshop, storage room.
            
            Ji
                Fang Quan Zheng Shagang Zi No.
                000278




-26-




**Item
      3. Legal Proceedings**





There
      are
      no known pending legal proceedings to which we or our properties are
      subject.





**Item
      4. Submission Of Matters To A Vote Of Shareholders**




No
      matters were submitted to a vote of shareholders in the last
      quarter.




**PART
      II**





**Item
      5. Market For Registrant’s Common Equity, Related Shareholder Matters, And
      Issuer Purchases Of Equity Securities**





**MARKET
      PRICE INFORMATION**




Our
      stock
      is currently quoted on the Over the Counter Bulletin Board and our trading
      symbol is "YSYB.OB”. There has never been any established public market for
      shares of our Common Stock.





The
      following table sets forth for the period indicated the prices of the Common
      Stock in the over-the-counter market, as reported and summarized by the OTC
      Bulletin Board. Such prices are based on inter-dealer bid and asked prices,
      without markup, markdown, commissions, or adjustments and may not represent
      actual transactions.




CALENDAR QUARTER ENDED
              
              HIGH
              
              LOWMarch
                  31, 2007
              
              
              0
              *
              
              0
              *June
                  30, 2007
              
              
              0
              *
              
              0
              *September
                  30, 2007
              
              
              0
              *
              
              0
              *December
                  31, 2007
              
              
              4.50
              
              
              2.50




*
      There
      was almost no trading activity of the company’s common stock on and before
      September 30, 2007.





On
      March
      28, 2008, the last reported sale price of our common stock on the Over the
      Counter Bulletin Board was $3.90 per share.





**Shareholders**





As
      of
      March 31, 2008, we have 20,000,003 shares of Common Stock issued and outstanding
      held by approximately 360 shareholders and 10,000,000 shares of Preferred Stock
      issued and outstanding held by approximately 10 shareholders. We have authorized
      and issued 10,000,000 Series A Preferred Stock and authorized 10,000,000 Series
      B Preferred Stock but have not issued any Series B Preferred Stock.





**Dividend
      Policy**





Our
      board
      of directors has not declared a dividend on our Common Stock during the last
      two
      fiscal years or the subsequent interim period and we do not anticipate the
      payments of dividends in the near future, as we intend to reinvest our profits
      to grow operations. We rely on dividends from Yanglin for our funds and PRC
      regulations may limit the amount of funds distributed to us from Yanglin, which
      will affect our ability to declare any dividends.





**Repurchases
      of Equity Securities**





No
      repurchases of our common stock were made in a month within the fourth quarter
      of the fiscal year covered by this report.





**Item
      6.   Selected Financial Data**





**SELECTED
      CONSOLIDATED FINANCIAL DATA**




You
      should read the following selected consolidated financial data in conjunction
      with “Management's Discussion and Analysis of Financial Condition and Results of
      Operations,” the financial statements and related notes, and the other financial
      information included in this prospectus.




-27-


Consolidated Statement ofOperationsThe year endedDec. 31, 2003($)The year endedDec. 31, 2004($)The year endedDec. 31, 2005($)The year endedDec. 31, 2006($)The year endedDec. 31, 2007($)The six monthsended June 30,2008($)(unaudited)(audited)(audited)(audited)(audited)(unaudited)Sales Revenue (net of discounts, returns and allowances)20,077,56026,325,61138,430,46588,078,494155,206,867141,549,672Other sales----Cost of sales(19,144,441)(24,557,296)(35,132,664)(79,862,179)(142,568,658)(130,296,704)Gross Profit933,1191,768,3153,297,8018,216,31512,638,20911,252,968Selling expenses(42,035)(54,553)(43,094)(63,209)(146,411)(118,970)General and administrative expenses(702,247)(902,258)(1,103,262)(1,078,184)(1,812,450)(1,244,941)Income from operations188,836811,5042,151,4457,074,92210,679,3489,889,057Interest expense, net(73,762)(100,455)(150,370)(219,032)(394,705)(460,105)Other income32,146211,168--39,385-Other expense(24,087)---(14,348)Income before taxation123,133922,2172,001,0756,855,89010,324,0289,414,604Income tax------Net Income123,133922,2172,001,0756,855,89010,324,0289,414,604Basic earnings per share0.0040.0460.1000.3430.5160.471Diluted earnings per share0.0040.0460.1000.3430.0690.258
         Consolidated Balance SheetsThe year endedDec. 31, 2003($)The year endedDec. 31, 2004($)The year endedDec. 31, 2005($)The year endedDec. 31, 2006($)The year endedDec. 31, 2007($)The six monthsended June 30,2008($)(unaudited)(audited)(audited)(audited)(audited)(unaudited)Current Assets12,343,64213,069,4789,911,88311,272,05435,828,92745,774,921Total Assets19,204,78920,454,19827,090,83335,245,74770,732,53185,415,153Current Liabilities6,339,6856,350,10410,634,63611,050,31915,587,62517,027,577Total Liabilities6,339,6856,670,72910,908,53311,512,09616,044,73217,439,942Total Stockholders’ Equity12,865,10413,783,46916,182,30023,733,65154,687,79967,975,211





-28-




**Item
            7. Management’s Discussion and Analysis of Financial Condition and Results of
            Operation**
 
 The
          following discussion of our financial condition and results of operations
          should
          be read in conjunction with our audited consolidated financial statements
          and
          the notes to those financial statements appearing elsewhere in this Form
          10-K.
          This discussion contains forward-looking statements that involve significant
          risks and uncertainties. As a result of many factors, such as those set
          forth
          under "Forward Looking Statements" and "Item 1A. Risk Factors" and elsewhere
          in
          this Form 10-K, our actual results may differ materially from those anticipated
          in these forward-looking statements.
 
 **Company
          Overview**
 
 We
            are a
            leading non-genetically modified (non-GM) soybean processor in the PRC.
            We
            currently manufacture Grade 4 soy bean oil and soybean meal in bulk package
            which are sold throughout China to our customers directly or through
            distributors. Most of our customers (approximately 80%) are located in
            Northern
            China.
 
 Our
            manufacturing process includes sifting, crushing, heating and pressing
            soybeans,
            extracting and separating oil from crushed soybeans, and cleansing, hydrating
            and packaging of oil as well as drying and packaging soybean meal. Currently,
            our main products include soybean oil, salad oil and soybean meal. We
            plan to
            broaden our product line to include high end products such as squeezed
            oil,
            powdered oil and protein concentrates, textured protein and defatted
            soybean
            powder, while greatly enlarging the production capacity of salad oil.
            We have
            installed the equipment for manufacturing squeezed oil and expanded the
            production line for salad oil and have started production of these products
            by
            the end of 2007. The production facilities for powdered oil have been
            built and
            are now in trial production phase. We have also begun to build facilities
            for
            manufacturing soybean protein concentrates, textured protein and defatted
            soy
            powder. The production of c oncentrated
            protein and defatted soy powder will be launched within the last quarter
            of
            2008, and the
            production ine of textured
            protein will
            be
            put into operations within
            the 2 nd quarter
            of 2009 .
 
 We
          sell
          our products under the “Yanglin” brand name to various geographic regions of the
          PRC through our various distribution channels (see “ *Sales
          and Marketing* ”
below)
          directly to our customers primarily within the PRC market. In the fiscal
          year
          ending 2007, we processed approximately 385,000 tons of soybeans and generated
          total revenues amounting to approximately $155.2 million with net income
          amounting to $10.3 million.
 
 Our
          goal
          is to become the champion in the non-GM soybean industry of China, and
          we are
          fully confident that we can surely accomplish it in the near future. We
          are now
          considering future expansion and acquisition plan, with the intention to
          significantly increase our processing capacity. The plan is now still in
          preliminary stage, but this will nevertheless be a vital step in achieving
          our
          objective. On the other side, we are also making great efforts to improve
          and
          strengthen our management and internal control system. We have engaged
          Ernst
& Young as consultant on our Sarbanes-Oxley compliance project, and Ernst
          & Young’s project team has started to review our internal control. We
          believe that we can complete the project successfully by the end of 2008,
          providing ourselves with a great opportunity to reinforce our capability
          to
          protect the interests of the company and the shareholders and improve management
          effectiveness and efficiency.
 
 **Organizational
          History**
 
 Yanglin
          Soybean Inc. (f/k/a, Victory Divide Mining Company, the “Company”) was
          incorporated in the state of Nevada on May 26, 1921. Prior to October 3,
          2007
          the company has only nominal operations and assets.
 
 On
          October 3, 2007, the Company executed a reverse-merger with Faith Winner
          Investments Limited (“Faith Winner (BVI)”) by an exchange of shares whereby the
          Company issued 18,500,000 common shares at $0.001 par value in exchange
          for all
          Faith Winner (BVI) shares.
 
 Faith
          Winner (BVI) formed Faith Winner (Jixian) Agriculture Development Company
          (“Faith Winner (Jixian)” or “WFOE”), which entered into a series of agreements
          with Heilongjiang Yanglin Soybean Group Co., Ltd. (“Yanglin”) including but not
          limited to management, loan, purchase option, consignment, trademark licensing,
          non-competition, etc. As a result of entering the abovementioned agreements,
          WFOE is deemed to control Yanglin as a Variable Interest Entity as required
          by
          FASB Interpretation No. 46 (revised December 2003) Consolidated of Variable
          Interest Entities, an Interpretation of ARB No. 51.
 
 The
          reverse-merger also included an equity financing of $21,500,000 by the
          issuance
          of 10,000,000 Series A Convertible Preferred Stock at $2.15 per share to
          10
          accredited investors.
 
 The
          Company, through its subsidiaries and Yanglin, (hereinafter, collectively
          referred to as “the Group”), is now in the business of manufacturing,
          distribution, and selling of non-genetically modified soybean oil, soybean
          salad
          oil, and soybean meal throughout the Province of Heilongjiang, China.
  -29-
  On
          January 17, 2008, the Company changed its name from “Victory Divide Mining
          Company” to Yanglin Soybean, Inc.”
 
 **Major
          Performance Factors**
 
 ***Revenue***
 
 We
          derive
          our revenue mainly from the sales of 3 main products, namely soybean oil (4 th grade),
          salad oil and soybean meal. The revenue may be affected by the following
          factors:
 
 ·
                Processing
                    capacity of soybean;·
                Pricing
                    of soybean oil, salad oil and soybean meal;·
                Market
                    demand
 
 *Processing
          capacity of soybean.* Our
          current annual processing capacity of soybean is 520,000 metric tons, which
          is
          sufficient for our current production plan of processing about 420,000
          metric
          tons of soybeans in 2008.
 
 *Pricing
          of soybean oil, salad oil and soybean meal.* Generally
          speaking, we determine the price of our products based on market price
          and our
          cost, while there’s an overall trend of increase to compensate for the
          inflation. Our price is usually more competitive than that of our major
          rivalry,
          mostly state owned enterprises (SOEs), because we have higher operating
          efficiency and better control over cost.
 
 *Market
          demand.* The
          growth potential of our revenue depends on the market demand for our products.
          As the total market demand for these products is much larger than that
          is
          sufficient to absorb our production, and our products have been recognized
          as of
          high quality and competitive price, we can sell almost all of our production
          volume, and we believe that there’s high growth potential for our sales revenue,
          especially when our high-end products are put into the market.
 
 ***Cost
          of Sales***
 
 Cost
          of
          sales generally consists of four major parts: raw materials, labor, production
          overhead and manufacturing related depreciation. Raw material mainly refers
          to
          soybean, and it accounts for the most significant part of the cost of sales
          (COS), or about 94%. Labor cost is relatively low and only makes up 0.3%
          of COS.
          Production overhead includes auxiliary materials, utility expenses, machinery
          maintenance costs, inspection costs and other related expenses. Depreciation
          costs are applied to manufacturing facilities and equipment, such as production
          lines, steam generators, factory buildings, etc.
 
 Cost
          of
          sales is mainly determined by the following factors, directly or indirectly:
 
 ·
                The
                    availability and price of raw materials, especially soybeans.·
                Output
                    ratio and operating efficiency of production facilities.
 
 *The
          availability and price of raw materials, especially soybeans.* Raw
          material cost accounts for the major portion of COS, and soybean is the
          only
          major raw material, so the fluctuation in its price will have a material
          impact
          on our cost. The price of soybean may be affected by a series of factors,
          including the production volume of soybeans, the transactions of soybeans on
          futures market, etc. Meanwhile, if there’s shortage in supply of raw materials,
          our production facilities will have to operate at lower than the achievable
          maximum efficiency. As our processing volume occupies a relatively small
          portion
          of total soybean supply of Heilongjiang Province, let alone the whole China,
          we
          expect that this factor will have little influence over our cost.
 
 *Output ratio
          and operating efficiency of production facilities.* Output
          ration is the ratio between the input of raw materials, mostly soybeans,
          and the
          output of products. The more units of products we can produce using a single
          unit of raw material, the higher the output ratio. As the labor, production
          overhead and manufacturing related depreciation expenses are mostly of
          a fixed
          nature, generally speaking, the more we produce, the lower the unit cost.
          Our
          output ratio and operating efficiency is being raised continuously, due
          to the
          recent purchase and renovation of facilities and equipment, the enhanced
          competence and proficiency of staff and the improvement in management skills.
 
 ***Gross
          Profit***
 
 Gross
          profit is the result of the combined effects of the following factors:
          (a) the
          selling price of our products, (b) the sales volume and the individual
          profit
          margin of each product, and (c) the cost of sales. Currently the profit
          margin
          of our soybean oil and meal are relatively stable, so is gross profit.
          We expect
          that the overall gross profit will rise in the future, as we will be launching
          some high-end products with higher profit margin.
  -30-
 
 ***Operating
          Expenses***
 
 Operating
          expenses comprise of selling expenses and general & administrative expenses.
          Generally speaking, operating expenses occupy only a very small portion
          of total
          costs and expenses. For the past 2 years, the ratio of operating expenses
          as a
          percentage of net sales value was kept at lower than 1.3%.
 
 Selling
          expenses generally include business development expenses, sales meeting
          expenses, loading & handling, advertising, and sales-related staff salaries
          and welfare expenses, and travel expenses. We expect that these expenses
          will
          rise materially in the following years, as we will be recruiting more sales
          staff and expanding sales network, establishing new sales channels, plus
          inputting investment in promotion and advertising, to promote and sale
          our new
          products.
 
 General
          & administrative expenses cover the depreciation of office buildings and
          equipment, office expenses & supplies, management & administrative
          salaries, etc. These expenses are, generally speaking, more of a fixed
          nature.
          There may be increase in these expenses, as we will restructure our
          organizational structure and improve management institutions. Besides,
          we are
          now implementing our Sarbanes-Oxley Act compliance project of our internal
          control system and have engaged Ernst & Young as our consultant on this
          project. As this project involves the redesigning and restructuring of
          the whole
          internal control system and its processes, we expect that it will cause
          a
          material increase in our management expenses.
 
 ***Income
          Tax***
 
 We
          are a
          company incorporated in the State of Nevada and Faith Winner (BVI) is
          incorporated under the laws of the British Virgin Islands, and we conduct
          all
          our operations under certain contractual arrangements with Yanglin, a PRC
          company.
 
 Although
          we are subject to United States taxation, we do not anticipate incurring
          significant United States income tax liability for the foreseeable future
          because:
 
 ·
                we
                    do not conduct any material business or maintain any branch office
                    in the
                    United States,
 
 ·
                the
                    earnings generated from our non-U.S. operating companies are
                    generally
                    eligible for a deferral from United States taxation until such
                    earnings
                    are repatriated to the United States, and
 
 ·
                we
                    believe that we will not generate any significant amount of income
                    inclusions under the income imputation rules applicable to a
                    United States
                    company that owns "controlled foreign corporations" for United
                    States
                    federal income tax purposes.
 
 Therefore,
          we have made no provision for U.S. federal income taxes or tax benefits
          on the
          undistributed earnings and/or losses.
 
 Yanglin,
          a PRC company has income tax liabilities in the PRC. PRC enterprise income
          tax
          is calculated based on taxable income determined under PRC accounting
          principles. In accordance with Income Tax Law applicable to domestic companies,
          we are generally subject to an enterprise income tax rate of 33% (30% state
          income taxes plus 3% local income taxes).
 
 However,
          as Yanglin has been recognized as a Key Leading Enterprise in the
          Industrialization of Agriculture Industry by a collection of government
          agencies, including the National Committee of Reform and Development, the
          Department of Finance and the Department of Agriculture, we enjoy a complete
          exemption from income taxes. Our status is reviewed each two years. We
          are
          confident that we will continue to enjoy this status due to our size of
          operations and status in this industry.
  -31-
 
 **Results
          of Operations**
 
 *The
          following table shows the operating results for the years ended December
          31,
          2005, December 31, 2006 and December 31, 2007.*
  Consolidated Statement of Operations
                  
                  The year ended Dec.
                    31, 2005
                    ($)
                  
                  The year ended Dec.
                    31, 2006
                    ($)
                  
                  The year ended Dec.
                    31, 2007
                    ($)(audited)
                  
                  (audited)
                  
                  (audited)Sales
                      Revenue (net of discounts, returns and allowances)
                  
                  
                  38,430,465
                  
                  
                  88,078,494
                  
                  
                  155,206,867Other
                      sales
                  
                  
                  
                  
                  
                  -
                  
                  
                  -Cost
                      of sales
                  
                  
                  (35,132,664
                  )
                  
                  (79,862,179
                  )
                  
                  (142,568,658
                  )Gross
                      Profit
                  
                  
                  3,297,801
                  
                  
                  8,216,315
                  
                  
                  12,638,209Selling
                      expenses
                  
                  
                  (43,094
                  )
                  
                  (63,209
                  )
                  
                  (146,411
                  )General
                      and administrative expenses
                  
                  
                  (1,103,262
                  )
                  
                  (1,078,184
                  )
                  
                  (1,812,450
                  )Income
                      from operations
                  
                  
                  2,151,445
                  
                  
                  7,074,922
                  
                  
                  10,679,348Interest
                      expense, net
                  
                  
                  (150,370
                  )
                  
                  (219,032
                  )
                  
                  (394,705
                  )Other
                      income
                  
                  
                  -
                  
                  
                  -
                  
                  
                  39,385Other
                      expense
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Income
                      before taxation
                  
                  
                  2,001,075
                  
                  
                  6,855,890
                  
                  
                  10,324,028Income
                      tax
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Net
                      Income
                  
                  
                  2,001,075
                  
                  
                  6,855,890
                  
                  
                  10,324,028Foreign
                      currency translation adjustment
                  
                  
                  397,756
                  
                  
                  675,461
                  
                  
                  2,676,688Comprehensive
                      income
                  
                  
                  2,398,831
                  
                  
                  7,531,351
                  
                  
                  13,000,716
 
 **Year
          Ended December 31, 2007 Compared with Year Ended December 31, 2006**
 
 ***Net
          Sales***
 
 For The Year Ended December 31
                
                Period to Period ChangeItem
                
                2007 Amount ($)
                
                2006 Amount ($)
                
                Amount ($)
                
                %**Soybean
                    meal**
                
                
                92,563,442
                
                
                58,770,932
                
                
                33,792,510
                
                
                57.5**Soybean
                    oil**
                
                
                47,071,641
                
                
                22,149,399
                
                
                24,922,242
                
                
                112.5**Salad
                    Oil**
                
                
                15,571,784
                
                
                7,158,163
                
                
                8,413,621
                
                
                117.5**Total
                    Net Sales**
                
                
                155,206,867
                
                
                88,078,494
                
                
                67,128,373
                
                
                76.2
 
 Net
          sales
          revenue was $155,206,867 for the year ended December 31, 2007, an increase
          of
          $67,128,373 or 76.2% from $88,078,494 for the year ended December 31, 2006
          .
          This is primarily due to the 24.7% increase in our processing volume and
          the
          resultant growth in sales volume, and the significant increase in the market
          price of soybean products. Three main products of ours, namely soybean
          meal,
          soybean oil and salad oil, achieved a year over year growth rate of 57.5%,
          112.5% and 117.5% respectively.
 
 In
          the
          year ended December 31, 2007, we processed 385,087 metric tons of soybeans
          and
          produced 308,069 tons of soybean meal, 49,576 tons of soybean oil and 15,238
          tons of salad oil, compared to 309,161 metric tons of soybean, 245,948
          tons of
          soybean meal, 38,700 tons of soybean oil and 11,863 tons of salad oil
          respectively for the previous year, achieving the growth rates of 24.6%,
          25.3%,
          28.1% and 28.4% respectively. In the year ended December 31, 2007, we sold
          319,706 tons of soybean meal, 49,566 tons of soybean oil and 15,207 tons
          of
          salad oil, achieving the growth rates of 35.8%, 27.2% and 25.5%
          respectively over the year 2006 ended December 31, 2006 when we sold 235,338
          tons of soybean meal, 38,960 tons of soybean oil and 12,118 tons of salad
          oil.
          We sold as much of our products as we could produce even though we increased
          our
          production volume in 2007. This is because the demand for soybean products
          in
          PRC market is large as compared to the total supply, and our sales also
          benefited from our efforts in capitalizing on the favorable reputation
          of our
          products among customers.
 
 Meanwhile,
          the price of processed soybean products went up continuously during 2007,
          in
          line with the increasing soybean price. The average selling price of soybean
          meal increased by $40 or 15.9% from $250 per ton over the year ended December
          31, 2006 to $290 per ton over the year ended December 31, 2007, while the
          price
          of soybean oil rose by $381 or 67.0% from $569 per ton to $950 per ton
          over the
          same period, and the price increase of salad oil over the period was $433
          or
          73.3%, from $591 per ton to $1,024 per ton. The comparison from another
          time
          spot perspective shows that The price of soybean oil rose from $840 per
          ton at
          the end of December of 2006 to $1,283 at the end of December of 2007, at
          a
          growth rate of 52.7%, and that of soybean meal jumped from $236 per ton
          at the
          end of December of 2006 to $417 per ton at the end of December of 2007,
          at a
          growth rate of 76.7%. This factor contributed to the significant increase
          in our
          sales revenue.
 
 ***Cost
          of Sales and Gross Profit***
 
 For The Year Ended December 31
                
                Period to Period Change2007
                
                % of Sales
                
                2006
                
                % of SalesAmount ($)
                
                Revenue
                
                Amount ($)
                
                Revenue
                
                Amount ($)
                
                %**Soybean
                    meal**
                
                
                (86,654,275
                )
                
                93.6
                
                
                (53,256,342
                )
                
                90.6
                
                
                33,397,933
                
                
                62.7**Soybean
                    oil**
                
                
                (42,075,631
                )
                
                89.4
                
                
                (20,080,631
                )
                
                90.7
                
                
                21,995,000
                
                
                109.5**Salad
                    Oil**
                
                
                (13,838,752
                )
                
                88.9
                
                
                (6,525,206
                )
                
                91.2
                
                
                7,313,546
                
                
                112.1**Cost
                    of Sales**
                
                
                (142,568,658
                )
                
                91.9
                
                
                (79,862,179
                )
                
                90.7
                
                
                62,706,479
                
                
                78.5**Soybean
                    meal**
                
                
                5,909,167
                
                
                6.4
                
                
                5,514,590
                
                
                9.4
                
                
                394,577
                
                
                7.2**Soybean
                    oil**
                
                
                4,996,010
                
                
                10.6
                
                
                2,068,768
                
                
                9.3
                
                
                2,927,242
                
                
                141.5**Salad
                    Oil**
                
                
                1,733,032
                
                
                11.1
                
                
                632,957
                
                
                8.8
                
                
                1,100,075
                
                
                173.8**Gross
                    Profit**
                
                
                12,638,209
                
                
                8.1
                
                
                8,216,315
                
                
                9.3
                
                
                4,421,894
                
                
                53.8
  -32-
 
 Our
          cost
          of sales for the year ended December 31, 2007 rose by $62,706,479 or 78.5%
          over
          the year ended December 31, 2006, from $79,862,179 to $142,568,658, while
          the
          ratio of cost as a percentage to net sales value rose to 91.9% from 90.7%
          over
          the period. The main reasons for these changes were the significant increase
          in
          the price of soybeans and the significant increase of processing and production
          volume in 2007.
 
 The
          rise
          in soybean price was caused by two reasons. First, the drought in the summer
          of
          2007 caused soybean production volume to fall significantly in Heilongjiang
          province, with s ome of Heilongjiang’s soybean production areas witnessing a 60%
          fall in volume. Second, the continuously low price in 2006 and prior years
          discouraged the farmers from planting soybean, and this caused a shrink
          in the
          growing area of soybean in China, i.e. 12% less in 2007 than in 2006. The
          reduction in supply resulted in the average unit cost of soybeans rising
          to
          about $405 per ton for the year ended December 31, 2007, from around $236
          per
          ton for the year ended December 31, 2006, an increase of approximately
          72%. The
          comparison from a time spot perspective shows that The purchase price in
          our
          local area rose from $298 per ton at the end of December of 2006 which
          is
          approximately 73.2% to $515 at the end of December of 2007.
 
 The
          rise
          in the ratio of cost as a percentage to net sales value was the product
          of the
          difference between the growth rate of the price of soybean, which is the
          major
          raw material and the cost of which constitutes the majority of cost of
          sales,
          and those of the prices of soybean products. As stated above, the average
          purchase price of soybean rose by 72% from 2006 to 2007. During the same
          period,
          the average selling price of soybean oil and salad oil increased by 67%
          and
          73.4% respectively, more than sufficient to compensate for the increase
          in raw
          material cost, so their respective ratio of cost as a percentage to net
          sales
          value fell by 1.3% and 2.3%. However, the increase in the average selling
          price
          of soybean meal of 2007 over 2006 was only 15.9%, obviously insufficient
          to
          cover the rise in raw material cost, so it caused a 3% increase in the
          ratio of
          its cost as a percentage to its net sales value. As the sales volume of
          soybean
          meal was far larger than the aggregate of soybean oil and salad oil, for
          example
          319,706 tons of soybean meal was sold in 2007 as compared to 64,773 tons
          of
          soybean oil and salad oil sold in total in that year, soybean meal has
          a major
          factor in determining the overall cost structure, so the overall ratio
          of cost
          as a percentage to net sales value grew by 1.2% from 2006 to 2007.
 
 The
          unusual rise in soybean price caused the rise in the ratio of cost as a
          percentage to net sales value and, consequently, the fall in gross profit
          margin, from 9.3% in 2006 to 8.1% in 2007, though the absolute amount of
          gross
          profit enjoyed an increase of $4,421,894 or 53.8% at the same time. The
          growth
          in absolute value was mainly due to the increase in sales volume and sales
          price.
 
 We
          expect
          that the ratio of cost as a percentage to net sales value may drop in 2008,
          as the yearly average purchase price of soybean of 2008 is expected to
          stabilize and fall as compare to that of 2007. The reasons are: first the
          drought is an exceptional event at an unusual scale; second, the significant
          increase in soybean price in 2007 has provided strong motives for farmers
          to
          expand the growing area of soybeans. As a result, we believe that the gross
          profit margin will rise gradually in the future. There are other reasons
          for
          this expected increase in gross profit margin: (1) our enhanced ability
          to
          reduce the effect of the fluctuating soybean prices, including sourcing
          soybean
          from other soybean production areas within Heilongjiang and expanding our
          soybean storage facilities; (2) further improvements of our production
          efficiency.
 
 ***Operating
          Expenses***
 
 For The Year Ended December 31
                  
                  Period to Period2007
                  
                  % of Sales
                  
                  2006
                  
                  % of Sales
                  
                  ChangeAmount ($)
                  
                  Revenue
                  
                  Amount ($)
                  
                  Revenue
                  
                  Amount
                    ($)
                  
                  %Selling
                      Expenses
                  
                  
                  (146,411
                  )
                  
                  0.09
                  
                  
                  (63,209
                  )
                  
                  0.07
                  
                  
                  83,202
                  
                  
                  131.6General
                      & Administrative Expenses
                  
                  
                  (1,812,450
                  )
                  
                  1.17
                  
                  
                  (1,078,184
                  )
                  
                  1.22
                  
                  
                  734,266
                  
                  
                  68.1**Total
                      Operating Expenses**
                  
                  
                  (1,958,861
                  )
                  
                  1.27
                  
                  
                  (1,141,393
                  )
                  
                  1.29
                  
                  
                  817,468
                  
                  
                  72.8
  -33-
 
 Selling
          expenses for the year ended December 31, 2007 increased by $83,202 or 131.6%
          over the year ended December 31, 2006. This was mainly due to the increase
          in
          sales-related shipping and handling expenses, which usually is related
          to sales
          volume directly. Another reason was that we had recruited more sales persons
          while raising the overall salary level of sales staff. As a percentage
          of net
          sales, selling expenses increased from 0.07% of 2006 to 0.09% of 2007.
 
 General
          and administrative expenses for the year ended December 31, 2007 rose by
          $
          734,266 or 68.1%, from $1,078,184 for the year ended December 31, 2006
          , to
          $ 1,812,450 for the
          year ended December 31, 2007. The increase was primarily due to the management
          expenses, including legal, auditing, consulting and travel expenses, spent
          for
          the equity financing closed at October 3, 2007. As a percentage of net
          sales,
          general and administrative expenses fell from 1.22% for the year ended
          December
          31, 2006 to 1.17% for the year ended December 31, 2007.
 
 We
          expect
          that selling expenses will increase significantly in the following years
          when we
          launch our new high end products, as we need to expand our sales network
          and
          develop new sales channel, and to conduct much more promotion and advertising.
          General and administrative expenses may also go up, because we will reorganize
          our organizational structure to get ready for future expansion. In addition,
          there will be increased expenses spent in strengthening our reporting,
          compliance, internal controls and corporate governance systems to be compliant
          with relevant laws and regulations applicable to a U.S. listed company.
 
 ***Income
            fromOperations and Net Income***
 
 For The Year Ended December 31
                  
                  Period to Period2007
                  
                  % of Sales
                  
                  2006
                  
                  %of Sales
                  
                  ChangeAmount ($)
                  
                  Revenue
                  
                  Amount ($)
                  
                  Revenue
                  
                  Amount
                    ($)
                  
                  %Income
                      from operations
                  
                  
                  10,679,348
                  
                  
                  6.9
                  
                  
                  7,074,922
                  
                  
                  8.0
                  
                  
                  3,604,426
                  
                  
                  50.9Interest
                      expenses, net
                  
                  
                  (394,705
                  )
                  
                  0.25
                  
                  
                  (219,032
                  )
                  
                  0.24
                  
                  
                  175,673
                  
                  
                  80.2Other
                      income, net of expenses
                  
                  
                  39,385
                  
                  
                  0.03
                  
                  
                  -
                  
                  
                  -
                  
                  
                  39,385
                  
                  
                  100Income
                      tax
                  
                  
                  -
                  
                  
                  
                  
                  
                  -**Net
                      income**
                  
                  
                  10,324,028
                  
                  
                  6.7
                  
                  
                  6,855,890
                  
                  
                  7.8
                  
                  
                  3,468,138
                  
                  
                  50.6Foreign
                      currency translation adjustment
                  
                  
                  2,676,688
                  
                  
                  1.7
                  
                  
                  675,461
                  
                  
                  0.76
                  
                  
                  2,001,227
                  
                  
                  296.3**Comprehensive
                      income**
                  
                  
                  13,000,716
                  
                  
                  8.4
                  
                  
                  7,531,351
                  
                  
                  8.6
                  
                  
                  5,469,365
                  
                  
                  72.6
 
 Income
          from operations rose 50.9% or $3,604,426 for the year ended December 31,
          2007,
          at $ 10,679,348 ,
          over
          the year ended December 31, 2006, at $7,074,922, thanks to the increase
          by 76.2%
          in sales revenue. At the same time, operating margin fell from 8.0% to
          6.9%, due
          to the unexpected significant rise in soybean price as described above,
          as
          soybean purchasing costs constitute the major portion of our costs, while
          the
          ratio of selling expenses and general and administrative expenses as a
          percentage of net sales is quite small. We expect to see this ratio rise
          slightly in the future, as soybean price is expected to fall and stabilize
          by
          end of this year , and there would be further improvement of operating
          efficiency due to accumulation of skills and experience and larger economy
          of
          scales because of increasing sales volume.
 
 Net
          interest expense increased by $175,673 or 80.2% from the year ended December
          31,
          2006 to the year ended December 31, 2007. As a percentage of net sales,
          net
          interest expense was 0.25% for the year ended December 31, 2007, compared
          to
          0.24% for the year ended December 31, 2006. The increase was largely due
          to the
          higher demand for short term bank loan as the source of working capital
          in
          accordance to the large increase in our production volume. At December
          31, 2007,
          the balance of short term loan was $12,305,000, almost doubling over the
          balance
          at December 31, 2006, $6,523,825.
 
 Other
            income was $ 39,385 for the
            year ended December 31, 2007, where there was no other income for the
            year ended
            December 31, 2006.
 
 Since
          we
          have been recognized as a Key Leading Enterprise in the Industrialization
          of
          Agriculture Industry by the government, so we can enjoy a complete exemption
          from income taxes. We are confident that in the foreseeable future we will
          continue to enjoy this favorable policy due to our size of operations and
          status
          in this industry.
  -34-
 
 Net
            income increased by $ 3,468,138 or 50.6 % from the year ended December
            31, 2006
            to the year ended December 31, 2007. At the same time, net profit margin
            fell
            from 7.8% to 6.7%. This was for the same reason as income from operations,
            as
            there was unexpected significant rise in the price of soybean, our major
            raw
            material.
 
 As
            the
            exchange rate of China’s currency, RMB, against US Dollar keeps increasing, the
            average rate had risen from 1USD to 7.98189RMB in 2006 to 1USD to 7.61720RMB
            in
            2007, so we have achieved $ 2,676,688 of
            foreign currency translation gains for the year ended December 31, 2007,
            compared to $675,461 for the year ended December 31, 2006. Due to this
            reason,
            the comprehensive income for the year ended December 31, 2007 reached
            $ 13,000,716 ,
            an
            increase of $5,469,365 or 72.6% over $7,531,351 for the year ended December
            31,
            2006. And such gains sufficiently compensated for the significant increase
            in
            soybean price, as the ratio of comprehensive income as a percentage of
            net sales
            for the year ended December 31, 2007 reached 8.4%, a little bit lower
            than 8.6%
            for the year ended December 31, 2006.
 
 However,
          the change of foreign exchange rate can be affected by a series of complicated
          factors, including but not limited to, the government’s policy, the trend on
          global money market, the general economic status of the countries, etc.,
          so we
          cannot estimate, with any reasonable certainty, the effect of these fluctuations
          on our future business, product pricing, results of operations or financial
          conditions, but the fluctuation of the RMB may materially and adversely
          affect
          your investment if the current trend of appreciation of RMB is reversed.
 
 **Year
          Ended December 31, 2006 Compared with Year Ended December 31, 2005**
 
 ***Net
          Sales***
 
 For The Year Ended December 31
                  
                  Period to Period ChangeItem
                  
                  2006 Amount ($)
                  
                  2005 Amount ($)
                  
                  Amount ($)
                  
                  %**Soybean
                      meal**
                  
                  
                  58,770,932
                  
                  
                  25,762,803
                  
                  
                  33,008,129
                  
                  
                  128.1**Soybean
                      oil**
                  
                  
                  22,149,399
                  
                  
                  11,420,786
                  
                  
                  10,728,613
                  
                  
                  93.9**Salad
                      Oil**
                  
                  
                  7,158,163
                  
                  
                  1,052,868
                  
                  
                  6,105,295
                  
                  
                  579.9**Soybean**
                  
                  
                  -
                  
                  
                  194,008
                  
                  
                  (194,008
                  )
                  
                  -100**Total
                      Sales**
                  
                  
                  88,078,494
                  
                  
                  38,430,465
                  
                  
                  49,648,029
                  
                  
                  129.2
 
 Net
            sales
            revenue was $88,078,494 for the year ended December 31, 2006, an increase
            of
            $49,648,029or 129.2% from that of $ 38,430,465 for the
            year ended December 31, 2005. This is primarily due to the 143.5% increase
            in
            our processing volume and the resultant growth in sales volume. Three
            main
            products of our,namely soybean meal, soybean oil and salad oil, have
            achieved a
            growth rate of 128.1%, 93.9% and 579.9%, respectively over 2006.
 
 In
          the
          year ended December 31, 2006, we processed 309,161 metric tons of soybean,
          and
          produced 245,948 tons of soybean meal, 38,700 tons of soybean oil and 11,863
          tons of salad oil, compared to 126,978 metric tons of soybean, 101,685
          tons of
          soybean meal, 19,496 tons of soybean oil and 1,635 tons of salad oil,
          respectively, for the previous year, achieving a growth rate of 143.5%,
          141.9%,
          98.5% and 625.6%, repectively. This significant growth was primarily attributed
          to our Plant No. 3, which became operational at the very end of 2005. It
          added
          300,000 tons of annual soybean processing capacity to the original capacity
          of
          220,000 tons, and it was newly built by ourselves and equipped with brand
          new
          production lines and facilities.
 
 In
          the
          year ended December 31, 2006, we sold 235,338 tons of soybean meal, 38,960
          tons
          of soybean oil and 12,118 tons of salad oil, achieving a growth rate of
          127.1%,
          99.2% and 672.8%, respectively, over 103,650 tons of soybean meal, 19,563
          tons
          of soybean oil and 1,568 tons of salad oil for the year ended December
          31, 2005.
          We sold as much of our products as we could produce even though we increased
          our
          production volume in 2006. This is because the demand for soybean products
          in
          PRC market is large as compared to the total supply, and our sales also
          benefited from our efforts in capitalizing on the favorable reputation
          of our
          products among customers. Another important reason for sales growth was
          our
          efforts spent in reorganizing our sales network to remove inefficient use
          of
          sales resources and raised motivation for distributors.
  -35-
 
 ***Cost
          of Sales and Gross Profit***
 
 For The Year Ended December 31
                
                Period to Period Change2006
                
                % of Sales
                
                2005
                
                %of SalesAmount ($)
                
                Revenue
                
                Amount ($)
                
                Revenue
                
                Amount ($)
                
                %**Soybean
                    meal**
                
                
                (53,256,342
                )
                
                90.6
                
                
                (23,541,691
                )
                
                92.5
                
                
                29,714,651
                
                
                126.2**Soybean
                    oil**
                
                
                (20,080,631
                )
                
                90.7
                
                
                (10,409,603
                )
                
                91.1
                
                
                9,671,028
                
                
                92.9**Salad
                    Oil**
                
                
                (6,525,206
                )
                
                91.2
                
                
                (984,096
                )
                
                93.5
                
                
                5,541,110
                
                
                563.0**Soybean**
                
                
                -
                
                
                -
                
                
                (197,274
                )
                
                101.7
                
                
                (197,274
                )
                
                (100
                )**Cost
                    of Sales**
                
                
                (
                    79,862,179
                )
                
                90.7
                
                
                (35,132,664
                )
                
                92.2
                
                
                44,729,515
                
                
                127.3**Soybean
                    meal**
                
                
                5,514,590
                
                
                9.4
                
                
                1,897,792
                
                
                7.5
                
                
                3,616,798
                
                
                190.6**Soybean
                    oil**
                
                
                2,068,768
                
                
                9.3
                
                
                1,011,183
                
                
                8.9
                
                
                1,057,585
                
                
                104.6**Salad
                    Oil**
                
                
                632,957
                
                
                8.8
                
                
                68,772
                
                
                6.5
                
                
                564,185
                
                
                820.4**Soybean**
                
                
                -
                
                
                -
                
                
                (3,266
                )
                
                (1.7
                )
                
                3,266
                
                
                100.0**Gross
                    Profit**
                
                
                8,216,315
                
                
                9.3
                
                
                2,974,481
                
                
                7.8
                
                
                5,241,834
                
                
                176.2
 
 Our
          cost
          of sales for the year ended December 31, 2006 rose by $44,729,515 or 127.3%
          over
          the year ended December 31, 2005, from $35,132,664 to $79,862,179, while
          the
          ratio of cost as a percentage to net sales value dropped from 92.2% to
          90.7%
          over the period. The main reason for the increase in cost of sales was
          the
          significant increase in processing and production volume.
 
 In
          the
          year ended December 31, 2006, we processed 309,161 metric tons of soybean,
          and
          produced 245,948 tons of soybean meal, 38,700 tons of soybean oil and 11,863
          tons of salad oil, compared to 126,978 metric tons of soybean, 101,685
          tons of
          soybean meal, 19,496 tons of soybean oil and 1,635 tons of salad oil,
          respectively, for the previous year, achieving a growth rate of 143.5%,
          141.9%,
          98.5% and 625.6%, respectively. The cost of sales increase was in line
          with this
          significant growth in sales volume. The result was that the costs of soybean
          meal, soybean oil and salad oil grew only by 126.2%, 92.9% and 563%
          respectively. In the mean time, thanks to the high efficiency of Plant
          No. 3’s
          brand new equipment and the accumulation of the skills and experience of
          our
          staff, improved output ratio in production had helped to lower the ratio
          of
          costs of sales as a percentage of net sales, from 92.2% to 90.7%.
 
 Gross
          profit was $8,216,315 for the year ended December 31, 2006, an increase of
          $5,241,834 or 176.2% from $2,974,481 for the year ended December 31, 2005.
          The main reasonfor this increase was the significant growth in sales volume
          as
          result of the increase in production volume and the reorganization of our
          sales
          network. The improvement in output ratio effectively lowered the ratio
          of costs
          of sales as a percentage of net sales and thus raised gross margin, from
          7.8% to
          9.3%.
 
 ***Operating
          Expenses***
 
 For The Year Ended December 31
                
                Period to Period2006
                
                % of Sales
                
                2005
                
                %of Sales
                
                ChangeAmount ($)
                
                Revenue
                
                Amount ($)
                
                Revenue
                
                Amount
                  ($)
                
                %Selling
                    Expenses
                
                
                (63,209
                )
                
                0.07
                
                
                (43,094
                )
                
                0.11
                
                
                20,115
                
                
                46.7General
                    & Administrative Expenses
                
                
                (1,078,184
                )
                
                1.22
                
                
                (1,103,262
                )
                
                2.89
                
                
                (25,078
                )
                
                (2.27
                )**Total
                    Operating Expenses**
                
                
                (1,141,393
                )
                
                1.29
                
                
                (1,146,356
                )
                
                3.0
                
                
                (4,963
                )
                
                (0.43
                )
 
 Selling
          expenses for the year ended December 31, 2006 increased by $ 20,115 or
          46.7 %
          over the year ended December 31, 2005. This was mainly due to the increase
          in
          sales-related shipping and handling expenses, which usually is directly
          correlate with sales volume. As a percentage of net sales, selling expenses
          dropped from 0.11% to 0.07% over the year.
 
 General
          and administrative expenses for the year ended December 31, 2006 fell by
          $25,078
          or 2.27%, from $1,103,262 for the year ended December 31, 2005, to $1,078,184
          for the year ended December 31, 2006. As a percentage of net sales, general
          and
          administrative expenses dropped from 2.89% to 1.22% over the year. The
          decrease
          was primarily due to the fairly fixed nature of many of our management
          expenses,
          like the depreciation of our office buildings and equipment, office expenses,
          supplies, administrative salaries, insurance, and utilities, while our
          sales
          revenue rose significantly over the year.
  -36-
 
 ***Income
            from Operations and Net Income***
 
 For The Year Ended December 31
                  
                  Period to Period2006
                  
                  % of Sales
                  
                  2005
                  
                  % of Sales
                  
                  ChangeAmount ($)
                  
                  Revenue
                  
                  Amount ($)
                  
                  Revenue
                  
                  Amount
                    ($)
                  
                  %Income
                      from operations
                  
                  
                  7,074,922
                  
                  
                  8.0
                  
                  
                  2,151,445
                  
                  
                  5.6
                  
                  
                  4,923,477
                  
                  
                  228.8Interest
                      expenses, net
                  
                  
                  (219,032
                  )
                  
                  0.24
                  
                  
                  (150,370
                  )
                  
                  0.39
                  
                  
                  68,662
                  
                  
                  45.7Other
                      income, net of expenses
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Income
                      tax
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -**Net
                      income**
                  
                  
                  6,855,890
                  
                  
                  7.8
                  
                  
                  2,001,075
                  
                  
                  5.3
                  
                  
                  4,854,815
                  
                  
                  242.6Foreign
                      currency translation adjustment
                  
                  
                  675,461
                  
                  
                  0.76
                  
                  
                  397,756
                  
                  
                  1.0
                  
                  
                  277,705
                  
                  
                  69.8**Comprehensive
                      income**
                  
                  
                  7,531,351
                  
                  
                  8.6
                  
                  
                  2,398,831
                  
                  
                  6.3
                  
                  
                  5,132,520
                  
                  
                  214.0
 
 Income
            from operations rose 228.8% or $4,923,477 for the year ended December
            31, 2006,
            at $7,074,922, over the year ended December 31, 2005, at $2,151,445,
            thanks
            mostly to the increase of 131.1% in sales revenue, while the ratio as
            a
            percentage of net sales of cost of sales and general and administrative
            expenses
            had dropped. As a result, operating margin rose from 5.6% to 8.0%, thanks
            to the
            improvement of operating efficiency due to the accumulation of skills
            and
            experience and largerer economy of scales .
 
 Net
          interest expense increased by $68,662 or 45.7% from the year ended December
          31,
          2005 to the year ended December 31, 2006. The change was largely due to
          the
          higher demand for short term bank loan as the source of working capital
          in
          accordance to the large increase in our production volume. As a percentage
          of
          net sales, net interest expense was 0.24% for the year ended December 31,
          2006,
          compared to 0.39% for the year ended December 31, 2005, due to the increase
          of
          131.1% in sales revenue and the better efficiency in using the borrowings.
 
 We
          have
          been recognized as a Key Leading Enterprise in the Industrialization of
          Agriculture Industry by the government, so we can enjoy a complete exemption
          from income taxes. We are confident that in the foreseeable future we will
          continue to enjoy this favorable policy due to our size of operations and
          status
          in this industry.
 
 Net
            income increased by $ 4,854,815 or 242.6 % from the year ended December
            31, 2005
            to the year ended December 31, 2006, while net profit margin rose from
            5.3% to
            7.8%. This was for the same reason as income from operations, as there
            was an
            increase of 131.1% in sales revenue, while the ratio as a percentage
            of net
            sales of cost of sales and general and administrative expenses had dropped.
 
 As
          the
          exchange rate of China’s currency, RMB, against US Dollar keeps increasing, the
          average rate had risen from 1USD to 8.20329RMB in 2005 to 1USD to 7.98189RMB
          in
          2006, so we achieved $675,461 of foreign currency translation gains for
          the year
          ended December 31, 2006, compared to $397,756 for the year ended December
          31,
          2005. Partly due to this reason, the comprehensive income for the year
          ended
          December 31, 2006 reached $7,531,351, an increase of $5,132,520 or 214.0%
          over
          $2,398,831 for the year ended December 31, 2005.
 
 However,
          the change of foreign exchange rate can be affected by a series of complicated
          factors, including but not limited to, the government’s policy, the trend on
          global money market, the general economic status of the countries, etc.,
          so we
          cannot estimate, with any reasonable certainty, the effect of these fluctuations
          on our future business, product pricing, results of operations or financial
          conditions, but the fluctuation of the RMB may materially and adversely
          affect
          your investment if the current trend of appreciation of RMB is reversed.
 
 **Liquidity
          and Capital Resources**
 
 Generally,
          we finance our business with cash flow from operations and short-term bank
          loans
          and we use shareholders’ equity investment and retained earnings to meet capital
          expenditures.
 
 Working
          capital mainly consists of raw materials purchases, salaries, production
          overhead (auxiliary materials, utilities, etc.) and finance expenses. Raw
          materials (soybean) purchases constitute the majority of our working capital.
 
 Because
          we usually pay cash to our suppliers upon purchase of soybeans, there is
          a
          greater than normal need for cash around harvest season. Our pattern of
          operations is as follows: (i) we will keep a large cash reserve by early
          October, which is harvest time, and take short-term loans from banks at
          that
          time (ii) we will build up a substantial inventory of soybeans so that
          for the
          period till the end of the year and for the following half year, we will
          have
          sufficient raw materials to maintain smooth operations and convert finished
          products to cash, and (iii) we will repay the short-term loans that we
          had taken
          by the end of June or July the following year.
  -37-
 
 Our
          working capital requirements may be influenced by quite a few factors,
          including
          the fluctuation of raw material prices, cash flow, competition, our
          relationships with suppliers or customers, the availability of credit facilities
          and financing alternatives, none of which can be predicted with high level
          of
          certainty.
 
 ***Operating
          Activities***
 
 **Year
          Ended December 31, 2007 Compared with Year Ended December 31, 2006**
 
 Cash
          used
          in operating activities for the year ended December 31, 2007 was $4,866,156,
          while cash generated from operating activities for the year ended December
          31,
          2006 was $7,268,151. This drop was caused by the unusual and exceptionally
          significant rise in soybean price in year 2007 (please refer to section
“Cost of
          Sales and Gross Profit” above in the comparison between the operating results of
          2007 and 2006).
 
 As
          mentioned above, the reduction in supply resulted in the fact that t he
          average
          unit cost of our soybeans rose to about $405 per ton for the year ended
          December
          31, 2007, from around $236 per ton for the year ended December 31, 2006,
          a
          growth rate of 72%. And the comparison of soybean prices from another angle
          shows that the purchase price in our local area rose from $298 per ton
          at the
          end of December of 2006 by 73.2% to $515 at the end of December of 2007.
          However, overall speaking, the rise in the average selling price of soybean
          products could not compensate for the increase in raw material cost (please
          refer to section “Cost of Sales and Gross Profit” above in the comparison
          between the operating results of 2007 and 2006).
 
 Meanwhile,
          the demand for soybean had also increased greatly over the year. In the
          year
          ended December 31, 2007, we processed 385,087 tons metric tons of soybeans,
          compared to 309,161 metric tons of soybean of the previous year, achieving
          a
          growth rate of 24.6%. And to counter the supply shortage in 2007 and to
          prepare
          ourselves for satisfying higher production volume in 2008, we had built
          up
          significant stocks. At the end of 2006, our inventory level of soybeans
          was less
          than 17,800 tons, and it rose to over 35,000 tons at the end of 2007, an
          increase of 157%. The combined effect of these 2 factors resulted in a
          321%
          growth in the cost of inventories maintained at the end of 2007, standing
          at
          $15.5 million, compared to only less than $3.7 million at the end of 2006.
 
 For
            the
            above reasons, we had to spend a great more amount of cash on procuring
            and
            maintaining our inventories. In the year ended December 31, 2007, $9,712,307
            cash was used in procuring and maintaining inventories. In addition,
            $5,508,012
            cash was used as advances to suppliers. We used to pay almost ignorable
            advances
            to suppliers. However, due to the material fall in soybeans supply, we
            have to
            pay large advances to major suppliers to secure the supply of raw materials.
 
 Our
          view
          is that the cash outflow in operating activities of 2007 was of a temporary
          and
          exceptional nature, and it was an isolated event, so it cannot be reasonably
          used to estimate the trend of our operational results in the future. The
          draught
          in 2007 was an unforeseeable event at an exceptional scale, and the rise
          of
          soybean price has put strong stimulation on farmers to grow soybeans, the
          availability of soybean and thus its price will be stabilized and its long-term
          trend is a falling one. Generally speaking, our cash flows are healthy
          and
          stable, as we have very large sales revenue and we sell mostly on cash
          basis,
          with ignorable A/R. Actually the situation has been improved greatly since
          the
          beginning of 2008. In the first 2 months, we have already achieved a net
          cash
          inflow from operations of about $1.65 million. We are confident to achieve
          a
          good cash flow from our operations in 2008.
 
 Other
          major adjustments affecting cash flows from operating activities of 2007
          are:
 
 (1)
                An
                    addition of $182,708 due to the collection of accounts receivables.(2)
                A
                    reduction of $1,667,452 of prepaid VAT and other taxes, as they
                    increased
                    in line with purchase volume of raw materials.(3)
                An
                    addition of $714,295 due to decrease in other receivables.(4)
                A
                    reduction of $730,106 for decrease in accounts payables.(5)
                A
                    reduction of $698,636 for decrease in other payables.(6)
                An
                    addition of $152,225 due to increase in customers deposits.
 
 **Year
          Ended December 31, 2006 Compared with Year Ended December 31, 2005**
 
 Cash
          generated from operating activities for the year ended December 31, 2006
          was
          $7,268,151, compared to cash used in operating activities of $82,307 for
          the
          year ended December 31, 2005.
 
 The
          major
          adjustments affecting cash flows from operating activities of 2007 are:
 
 (1)
                An
                    addition of $353,941 due to the decrease of accounts receivables.(2)
                A
                    reduction of $1,814,596 for cash used in inventories.(3)
                An
                    addition of $463,017 due to decrease in other receivables.(4)
                An
                    addition of $166,753 due to increase in accounts payables.
  -38-
 
 (5)
                A
                    reduction of $142,442 for decrease in customers deposits.
 
 ***Investing
          Activities***
 
 **Year
          Ended December 31, 2007 Compared with Year Ended December 31, 2006**
 
 Net
          cash
          used in investing activities for the year ended December 31, 2007 was
          $12,413,404, compared to $9,519,203 for the year ended December 31, 2006.
          The
          major item of investing activities in 2007 was $11,702,842 payment for
          construction in progress, which was primarily spent for the renovation
          of Plant
          No.2 and the construction of the production lines for new high end products
          and
          the related facilities in that plant.
 
 We
          satisfied the demand for cash used in capital investment mostly with the
          proceeds from the equity financing completed on October 3, 2007 (please
          refer to
          section “Recent Events” in financing activities below), supplemented by our own
          cash reserves.
 
 **Year
          Ended December 31, 2006 Compared with Year Ended December 31, 2005**
 
 Net
          cash
          used in investing activities for the fiscal year ended December 31, 2006
          was
          $9,519,203, compared to net cash used in investing activities of $7,298,639
          for
          the year ended December 31, 2005. There were two major investing activities:
          $7,251,862 of payment for plant and equipment, and $2,267,341 of payment
          for
          land use rights. These amounts were mostly spent on two items: installments
          of
          the payment due after completion for the construction and equipment of
          Plant No.
          3, which was completed at the end of 2005, and the purchase of new equipment
          and
          machinery for the two older plants, namely Plant No. 1 and No. 2.
 
 We
          satisfied this cash need with our cash reserves brought forward from the
          year
          2005 and cash generated from the year 2006 operations.
 
 ***Financing
          Activities***
 
 **Recent
          Events**
 
 On
          October 3, 2007, we completed, at a price of $2.15 per share, a private
          placement of 10,000,000 shares of Series A Convertible Preferred Stock,
          par
          value $0.001 per share and attached warrants to purchase Common Stock.
          The gross
          proceeds of the offering was $21.5 million.
 
 **Year
          Ended December 31, 2007 Compared with Year Ended December 31, 2006**
 
 Net
          cash
          provided by financing activities was $22,926,970 for the year ended December
          31,
          2007, compared to $2,222,504 for the year ended December 31, 2006. The
          major
          items for 2007 are:
 
 (1)
                $17,849,093
                    of proceeds from issue of share capital and warrants. This was
                    the
                    proceeds from the private placement mentioned above.(2)
                $11,815,365
                    of bank borrowings. This was short-term bank loan to satisfy
                    working
                    capital needs.
 
 **Year
          Ended December 31, 2006 Compared with Year Ended December 31, 2005**
 
 Net
          cash
          provided by financing activities was $2,222,504 for the year ended December
          31,
          2006, compared to $1,759,693 for the year ended December 31, 2005. The
          major
          items for 2006 are:
 
 (1)
                $6,898,366
                    of bank borrowings. This was short-term bank loan to satisfy
                    working
                    capital needs.
 
 ***Loans***
 
 The
          balance of short-term bank loans was $12,305,000 at December 31, 2007,
          compared
          to $6,523,825 at December 31, 2006. This increase was mainly due to the
          huge
          increase in demand for working capital, caused mainly by both the increase
          need
          for raw materials to satisfy the material growth of processing volume and
          the
          exceptional and unexpected rise in soybean price (please refer to the section
          “Cost of Sales and Gross Profit” in the comparison between the operational
          results of 2007 and 2006 above).
 
 The
          balance of our long-term bank loan was about $457,107 at December 31, 2007,
          plus
          a current portion of $47,433, payable within one year of balance sheet
          date.
  -39-
 
 Currently
          we have a credit line of up to RMB600 million, or about USD85.56 million
          using
          current exchange rate of 1USD to 7.0130RMB, based on our credit rank AA
          granted
          by Agricultural Development Bank. We believe that this would be sufficient
          for
          our future working capital needs at the current operation and capacity
          level.
 
 ***Future
          Cash Commitments***
 
 We
          have
          made ambitious capital investment plans for six new projects between fiscal
          2007
          and fiscal 2008, estimated at a total value of over $20.4 million. This
          demand
          for investment capital will be mainly met with the proceeds from our private
          placement mentioned above, and partly with our cash reserves.
 
 **Critical
          Accounting Policies and Estimates**
 
 Management's
          discussion and analysis of its financial condition and results of operations
          are
          based upon our consolidated financial statements, which have been prepared
          in
          accordance with United States generally accepted accounting principles.
          Our
          financial statements reflect the selection and application of accounting
          policies which require management to make significant estimates and judgments.
          See note 1 to our consolidated financial statements, "Summary of Significant
          Accounting Policies and Organization". We believe that the following reflect
          the
          more critical accounting policies that currently affect our financial condition
          and results of operations:
 
 ***Method
          of Accounting***
 
 Yanglin
          Soybean, Inc. (“the Company”) maintains its general ledger and journals with the
          accrual method accounting for financial reporting purposes. The financial
          statements and notes are representations of management. Accounting policies
          adopted by the Company conform to generally accepted accounting principles
          in
          the United States of America and have been consistently applied in the
          presentation of financial statements.
 
 The
          share
          exchange transaction has been accounted for as a recapitalization of Victory
          Divide Mining Company (“VDMC”, the former name of Yanglin Soybean, Inc.) where
          the Company (the legal acquirer) is considered the accounting acquiree
          and Faith
          Winner (BVI) (the legal acquiree) is considered the accounting acquirer.
          As a
          result of this transaction, the Company is deemed to be a continuation
          of the
          business of Faith Winner (BVI).
 
 Accordingly,
          the accompanying financial statements are those of the accounting acquirer:
          Faith Winner (BVI). The historical stockholders’ equity of the accounting
          acquirer prior to the share exchange has been retroactively restated as
          if the
          share exchange transaction occurred as of the beginning of the first period
          presented.
 
 ***Principles
          of Consolidation***
 
 The
          consolidated financial statements, which include the Company and its
          subsidiaries, are complied in accordance with generally accepted accounting
          principles in the United States of America. All significant inter-company
          accounts and transactions have been eliminated. The consolidated financial
          statements include 100% of assets, liabilities, and net income or loss
          of those
          wholly-owned subsidiaries.
 
 The
          company owned the three subsidiaries since its reverse-merger on October
          3,
          2007. Retroactively restated as of December 31, 2006, 2005, and 2004, the
          detailed identities of the consolidating subsidiaries would have been as
          follows:
 
 Name of Company
                
                Place of incorporation
                
                Attributable interestFaith
                    Winner Investments Ltd
                
                British
                  Virgin Islands
                
                
                100
                %Faith
                    Winner (Jixian) Agriculture Development Company
                
                PRC
                
                
                100
                %Heilongjiang
                    Yanglin Soybean Group Co. Ltd
                
                PRC
                
                
                100
                %*Note:
                    This is a variable interest entity
 
 ***Use
          of estimates***
 
 The
          preparation of the financial statements in conformity with generally accepted
          accounting principles in the United States of America requires management
          to
          make estimates and assumptions that affect the reported amounts of assets
          and
          liabilities and disclosure of contingent assets and liabilities at the
          date of
          the financial statements and the reported amounts of revenues and expenses
          during the reporting periods. Management makes these estimates using the
          best
          information available at the time the estimates are made; however actual
          results
          could differ materially from those estimates.
  -40-
 
 ***Economic
          and political risks***
 
 The
          operations of the Company, through its subsidiaries and Heilongjiang Yanglin
          Soybean Group Co., Ltd. (“Yanglin”) (hereinafter, collectively referred to as
“the Group”), are conducted in the PRC. Accordingly, the Company’s business,
          financial condition and results of operations may be influenced by the
          political, economic and legal environment in the PRC, and by the general
          state
          of the PRC economy.
 
 The
          Group’s operations in the PRC are subject to special considerations and
          significant risks not typically associated with companies in North America
          and
          Western Europe. These include risks associated with, among others, the
          political, economic and legal environment and foreign currency exchange.
          The
          Group’s results may be adversely affected by changes in the political and social
          conditions in the PRC, and by changes in governmental policies with respect
          to
          laws and regulations, anti-inflationary measures, currency conversion,
          remittances abroad, and rates and methods of taxation, among other things.
 
 ***Land
          use rights***
 
 Land
          use
          rights are stated at cost less accumulated amortisation. Amortisation is
          provided over the respective useful lives, using the straight-line method.
          Estimated useful lives are arranging from 22 to 50 years.
 
 ***Property,
          plant and equipment***
 
 Plant
          and
          equipment are carried at cost less accumulated depreciation. Depreciation
          is
          provided over their estimated useful lives, using the straight-line method.
          Estimated useful lives of the plant and equipment are as follows:
 
 Buildings
                
                
                10
                    yearsMachinery
                    and equipment
                
                
                3.5
                    - 30 yearsOffice
                    equipment
                
                
                4
                    - 20 yearsMotor
                    vehicles
                
                
                10
                    years
 
 The
          cost
          and related accumulated depreciation of assets sold or otherwise retired
          are
          eliminated from the accounts and any gain or loss is included in the statement
          of income. The cost of maintenance and repairs is charged to income as
          incurred,
          whereas significant renewals and betterments are capitalized.
 
 ***Accounting
          for the impairment of long-lived assets***
 
 The
          long-lived assets held and used by the Group are reviewed for impairment
          whenever events or changes in circumstances indicate that the carrying
          amount of
          assets may not be recoverable. It is reasonably possible that these assets
          could
          become impaired as a result of technology or other industry changes.
          Determination of recoverability of assets to be held and used is by comparing
          the carrying amount of an asset to future net undiscounted cash flows to
          be
          generated by the assets.
 
 If
          such
          assets are considered to be impaired, the impairment to be recognized is
          measured by the amount by which the carrying amount of the assets exceeds
          the
          fair value of the assets. Assets to be disposed of are reported at the
          lower of
          the carrying amount or fair value less costs to sell.
 
 During
          the reporting years, there was no impairment loss.
 
 ***Inventories***
 
 Inventories
          consisting of finished goods, and raw materials are stated at the lower
          of cost
          or market value. Substantially all inventory costs are determined using
          the
          weighted average basis. Finished goods are comprised of direct materials,
          direct
          labor and an appropriate proportion of overhead.
 
 ***Trade
          receivables***
 
 Trade
          receivables are recognized and carried at the original invoice amount less
          allowance for any uncollectible amounts. An allowance for doubtful accounts
          is
          maintained for all customers based on a variety of factors, including the
          length
          of time the receivables are past due, significant one-time events and historical
          experience. Bad debts are written off as incurred.
  -41-
 
 ***Cash
          and cash equivalents***
 
 The
          Company considers all highly liquid investments purchased with original
          maturities of three months or less to be cash equivalents. The Company
          maintains
          bank accounts only in the PRC. The Company does not maintain any bank accounts
          in the United States of America.
 
 ***Foreign
          currency translation***
 
 The
          accompanying financial statements are presented in United States dollars.
          The
          functional The reporting currency of the Group is the U.S. dollar (US$).
          Faith
          Winner (Jixian) and Yanglin use its local currency, Renminbi (RMB), as
          its
          functional currency. Results of operations and cash flow are translated
          at
          average exchange rates during the period, and assets and liabilities are
          translated at the end of period exchange rates. Translation adjustments
          resulting from this process are included in accumulated other comprehensive
          income in stockholders’ equity. Transaction gains and losses that arise from
          exchange rate fluctuations from transactions denominated in a currency
          other
          than the functional currency are included in the results of operations
          as
          incurred.
 
 The
          PRC
          government imposes significant exchange restrictions on fund transfers
          out of
          the PRC that are not related to business operations. These restrictions
          have not
          had a material impact on the Group because it has not engaged in any significant
          transactions that are subject to the restrictions.
 
 The
          exchange rates used to translate amounts in RMB into US$ for the purposes
          of
          preparing the consolidated financial statements were as follows:
 
 2007
                
                2006
                
                2005
                
                2004Year
                    end RMB : US$ exchange rate
                
                
                7.31410
                
                
                7.81750
                
                
                8.07340
                
                
                8.28650Average
                    yearly RMB : US$ exchange rate
                
                
                7.61720
                
                
                7.98189
                
                
                8.20329
                
                
                8.28723
 
 The
          RMB
          is not freely convertible into foreign currency and all foreign exchange
          transactions must take place through authorized institutions. No representation
          is made that the RMB amounts could have been, or could be, converted into
          US$ at
          the rates used in translation.
 
 ***Revenue
          recognition***
 
 Revenue
            represents the invoiced value of goods sold recognized upon the delivery
            of
            goods to customers. Revenue is recognized when all of the following criteria
            are
            met: Persuasive evidence of an arrangement exists, delivery has occurred
            or
            services have been rendered, and the seller’s price to the buyer is fixed or
            determinable,  and
            collection is reasonably assured.
 
 ***Costs
          of sales***
 
 Cost
          of
          sales consists primarily of material costs, employee compensation, depreciation
          and related expenses, which are directly attributable to the production
          of
          products. Write-down of inventory to lower of cost or market is also recorded
          in
          cost of revenues.
 
 ***Income
          taxes***
 
 The
          Group
          accounts for income tax using an asset and liability approach and allows
          for
          recognition of deferred tax benefits in future years. Under the asset and
          liability approach, deferred taxes are provided for the net tax effects
          of
          temporary differences between the carrying amounts of assets and liabilities
          for
          financial reporting purposes and the amounts used for income tax purposes.
          A
          valuation allowance is provided for deferred tax assets if it is more likely
          than not these items will either expire before the Group is able to realize
          their benefits, or that future realization is uncertain.
 
 ***Statutory
          reserves***
 
 As
          stipulated by the PRC’s Company Law and as provided in the Faith Winner
          (Jixian), and Yanglin’s Articles of Association, Faith Winner and Heilongjiang
          Yanglin’s net income after taxation can only be distributed as dividends after
          appropriation has been made for the following:
 
 (1)
                Making
                    up cumulative prior years’ losses, if any;
  -42-
 
 (2)
                Allocations
                    to the “Statutory surplus reserve” of at least 10% of income after tax, as
                    determined under PRC accounting rules and regulations, until
                    the fund
                    amounts to 50% of the Company's registered capital, which is
                    restricted
                    for set off against losses, expansion of production and operation
                    or
                    increase in registered capital;(3)
                Allocations
                    of 5-10% of income after tax, as determined under PRC accounting
                    rules and
                    regulations, to the Company's “Statutory common welfare fund”, which is
                    restricted for capital expenditure for the collective benefits
                    of the
                    Company's employees; and(4)
                Allocations
                    to the discretionary surplus reserve, if approved in the shareholders’
                    general meeting.
 
 ***Comprehensive
          income***
 
 Comprehensive
          income is defined to include all changes in equity except those resulting
          from
          investments by owners and distributions to owners. Among other disclosures,
          all
          items that are required to be recognized under current accounting standards
          as
          components of comprehensive income are required to be reported in a financial
          statement that is presented with the same prominence as other financial
          statements. The Group’s current component of other comprehensive income is the
          foreign currency translation adjustment.
 
 ***Recent
          accounting pronouncements***
 
 In
          September 2006, the FASB issued SFAS 157, Fair Value Measurements, which
          defines
          fair value, establishes a framework for measuring fair value in generally
          accepted accounting principles, and expands disclosures about fair value
          measurements. SFAS 157 applies under other accounting pronouncements that
          require or permit fair value measurements, where fair value is the relevant
          measurement attribute. The standard does not require any new fair value
          measurements. SFAS 157 is effective for financial statements issued for
          fiscal
          year beginning after November 15, 2007, and interim periods within that
          fiscal
          year. The Company is currently evaluating the impact of SFAS 157 on its
          operation and financial conditions.
 
 In
          September 2006, the SEC issued SAB No. 108, which provides guidance on
          the
          process of quantifying financial statement misstatements. In SAB No. 108,
          the
          SEC staff establishes an approach that requires quantification of financial
          statement errors, under both the iron-curtain and the roll-over methods,
          based
          on the effects of the error on each of the Company’s financial statements and
          the related financial statement disclosures. SAB No.108 is generally effective
          for annual financial statements in the first fiscal year ending after November
          15, 2006. The transition provisions of SAB No. 108 permit existing public
          companies to record the cumulative effect in the first year ending after
          November 15, 2006 by recording correcting adjustments to the carrying values
          of
          assets and liabilities as of the beginning of that year with the offsetting
          adjustment recorded to the opening balance of retained earnings. The Company
          does not anticipate that the adoption of this standard will have a material
          impact on these consolidated financial statements
 
 In
          February 2007, FASB issued Statement of Financial Accounting Standards
          No.
          (“SFAS”) 159, “The Fair Value Option for Financial Assets and Financial
          Liabilities - Including an Amendment of FASB Statement No. 115” (“SFAS 159”).
          SFAS 159 permits entities to choose to measure many financial instruments
          and
          certain other items at fair value. Entities that elect the fair value option
          will report unrealized gains and losses in earnings at each subsequent
          reporting
          date. The fair value option may be elected on an instrument-by-instrument
          basis,
          with a few exceptions. SFAS 159 also establishes presentation and disclosure
          requirements to facilitate comparisons between entities that choose different
          measurement attributes for similar assets and liabilities. The requirements
          of
          SFAS 159 are effective for our fiscal year beginning on January 1, 2008.
 
 In
          December 2007, the SEC issued Staff Accounting Bulletin No. 110 (“SAB 110”). SAB
          110 permits companies to continue to use the simplified method, under certain
          circumstances, in estimating the expected term of “plain vanilla” options beyond
          December 31, 2007. SAB 110 updates guidance provided in SAB 107 that previously
          stated that the Staff would not expect a company to use the simplified
          method
          for share option grants after December 31, 2007. Adoption of SAB 110 is
          not
          expected to have a material impact on the Company’s consolidated financial
          statements
 
 In
          December 2007, the Financial Accounting Standards Board issued Statement
          of
          Financial Accounting Standard (“SFAS”) No. 160, "Noncontrolling Interests in
          Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS 160
          establishes accounting and reporting standards for the noncontrolling interest
          in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is
          effective for fiscal years, and interim periods within those fiscal years,
          beginning on or after December 15, 2008. As such, the Company is required
          to
          adopt these provisions at the beginning of the fiscal year ended December
          31,
          2009. The Company is currently evaluating the impact of SFAS 160 on its
          consolidated financial statements but does not expect it to have a material
          effect
 
 In
          December 2007, the Financial Accounting Standards Board issued Statement
          of
          Financial Accounting Standard (“SFAS”) No. 141(R), "Business Combinations”. SFAS
          141(R) establishes principles and requirements for how the acquirer recognizes
          and measures in its financial statements the identifiable assets acquired,
          the
          liabilities assumed, an any noncontrolling interest in the acquiree, recognizes
          and measures the goodwill acquired in the business combination or a gain
          from a
          bargain purchase, and determines what information to disclose to enable
          users of
          the financial statements to evaluate the nature and financial effects of
          the
          business combination. SFAS 141(R) is effective for fiscal years, and interim
          periods within those fiscal years, beginning on or after December 15, 2008.
          As
          such, the Company is required to adopt these provisions at the beginning
          of the
          fiscal year ended December 31, 2009. The Company is currently evaluating
          the
          impact of SFAS 141(R) on its consolidated financial statements but does
          not
          expect it to have a material effect.
  ***Off-Balance
          Sheet Arrangements***
 
 We
          do not
          have any off-balance sheet arrangements.
  -43-





***Tabular
      Disclosure of Contractual Obligations***




**Payments due by period****Contractual**
              **obligations**
            
            **Total**
            
            **Less**
              **than 1**
              **year**
            
            **1-3 years**
            
            **3-5 years**
            
            **More**
              **than 5**
              **years**[Long-Term
                Debt Obligations]
            
            $
            514,035
            
            $
            49,405
            
            $
            109,887
            
            $
            124,653
            
            $
            230,090[Capital
                Lease Obligations]
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -[Operating
                Lease Obligations]
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -[Purchase
                Obligations]
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -




**Item
      7A. Quantitative And Qualitative Disclosures About Market
      Risk**




Market
      risk is the risk of loss to future earnings, to fair values or to future cash
      flows that may result from changes in the price of a financial instrument.
      The
      value of a financial instrument may change as a result of changes in interest
      rates, exchange rates, commodity prices, equity prices and other market changes.
      Our cash and cash equivalents are held for working capital purposes and consist
      primarily of bank deposits. We do not enter into investments for trading or
      speculative purposes.




*Interest
      Rate Risk*





Our
      exposure to interest rate risk primarily relates to the interest income
      generated by excess cash invested in demand deposits. We have not used
      derivative financial instruments in our investment portfolio in order to reduce
      interest rate risk. Interest earning instruments carry a degree of interest
      rate
      risk. We have not been exposed nor do we anticipate being exposed to material
      risks due to changes in interest rates.





*Foreign
      Currency Risk*





Our
      business is operated in the PRC, and its value is effectively denominated in
      Renminbi. The fluctuation of foreign exchange rate between U.S. dollars and
      Renminbi could affect the value of our common stock. Our revenues and expenses
      are primarily denominated in Renminbi, and so our exposure to foreign exchange
      risks should generally be limited. We do not have material monetary assets
      and
      liabilities denominated in U.S. dollars, although to the extent that we do
      in
      the future, the fluctuation of foreign exchange rate would affect the value
      of
      these monetary assets and liabilities denominated in U.S. dollars. Generally,
      appreciation of Renminbi against U.S. dollars will devaluate the assets and
      liabilities denominated in U.S. dollar, while devaluation of Renminbi again
      U.S.
      dollars will appreciate the assets and liabilities denominated in U.S. dollar.
      In China, very limited hedging transactions are available to reduce our exposure
      to exchange rate fluctuations. To date, we have not entered into any hedging
      transactions in an effort to reduce our exposure to foreign currency exchange
      risk. While we may decide to enter into hedging transactions in the future,
      the
      availability and effectiveness of these hedges may be limited and we may not
      be
      able to successfully hedge our exposure at all.





The
      conversion of RMB into foreign currencies, including U.S. dollars, has been
      based on rates set by the People’s Bank of China. On July 21, 2005, the PRC
      government changed its decade-old policy of pegging the value of the RMB to
      the
      U.S. dollar. Under the new policy, the RMB is permitted to fluctuate within
      a
      narrow and managed band against a basket of certain foreign currencies. This
      change in policy has resulted in an appreciation of the RMB against the U.S.
      dollar by approximately 6% during 2007 and approximately 12% since the change
      of
      the policy to the end of 2007. While the international reaction to the RMB
      revaluation has generally been positive, there remains significant international
      pressure on the PRC government to adopt an even more flexible currency policy,
      which could result in a further and more significant appreciation of the RMB
      against the U.S. dollar. We use the U.S. dollar as the reporting currency for
      our financial statements. Fluctuations in exchange rates, primarily those
      involving the U.S. dollar, may affect our costs and operating margins as well
      as
      our net income reported in U.S. dollars. For example, to the extent that we
      need
      to convert U.S. dollars into RMB for our operations, appreciation of the RMB
      against the U.S. dollar would have an adverse effect on the RMB amount we
      receive from the conversion. Assuming we had converted the U.S. dollar
      denominated cash balance equivalent to US$52.6 million as of July 1, 2008
      into RMB at the exchange rate of US$1.00 for RMB6.92 and, the respective
      People’s Bank of China rates as of July 1, 2008, this cash balance would have
      been RMB364.0 million. Assuming a further 10% appreciation of the RMB
      against the U.S. dollar, this cash balance would have decreased to RMB327.6
      million as of July 1, 2008. Conversely, if we decide to convert our RMB into
      U.S. dollars for the purpose of making payments for dividends for business
      purposes, appreciation of the U.S. dollar against the RMB would have a negative
      effect on the U.S. dollar amount available to us.




*Commodity
      Price Risk*




We
        engage
        in manufacturing of non-genetically modified soybean-based products in the
        PRC.
        Our main raw materials are commodities. Our exposure to commodity price risk
        is
        directly related to fluctuations of PRC domestic market and indirectly related
        to that of international market. For example, the soybean price went up from
        RMB
        1.23 per 500 grams at the beginning of the last year to RMB 2.13 per 500
        grams
        at the end of 2007, and in early March 2008 it has climbed to as high as
        RMB
        2.75 per 500 grams, due to both the shortage in soybean supply caused by
        a
        severe drought in 2007 and farmers’ cutting growing areas of soybeans brought by
        the continuously low price level by the end of 2006. To date, we have not
        entered into any hedging transactions in an effort to reduce our exposure
        to
        commodity price risk.





**Item
      8. Financial Statements And Supplementary Data**





Please
      refer to Item 15 “Exhibits and Financial Statement Schedules” of this
      report.




-44-




**Item
      9.  Changes In and Disagreements With Accountants On Accounting and
      Financial Disclosure**




On
      October 1, 2007, we dismissed S.W. Hatfield, CPA as our independent accountant,
      as approved by our board of directors. During the fiscal years 2005, 2006 and
      through the date of his dismissal, we had no disagreements with S.W. Hatfield,
      CPA on any matter of accounting principles or practices, financial statement
      disclosure, or auditing scope or procedure, which disagreements, if not resolved
      to the satisfaction of S.W. Hatfield, CPA, would have caused it to make
      reference to the subject matter of such disagreements in its report on our
      financial statements for such periods. During the fiscal years 2005, 2006 and
      through the date of his dismissal, there were no reportable events as defined
      under Item 304(a)(1)(v) of Regulation S-K adopted by the SEC.




On
      October 1, 2007, we retained Samuel H. Wong & Company, LLP as the new
      independent accountant, as approved by our board of directors. Samuel H. Wong
      & Company, LLP issued a report on the audited financial statements of
      Heilonjiang Yanglin Soybean Group Co. Ltd.. for the three years ended December
      31, 2004, December 31, 2005, and December 31, 2006 which were included in our
      current report on Form 8-K filed on October 10, 2007. Samuel H. Wong &
Company, LLP also reviewed the interim financial statements of Heilongjiang
      Yanglin Soybean Group Co., Ltd. for the three months ended March 31, 2007 and
      the six months ended June 30, 2007, and the proforma balance sheet of Victory
      Divide Mining Company as of June 30, 2007, which were also included in our
      current report on Form 8-K filed on October 10, 2007. Samuel H. Wong &
Company, LLP also reviewed the interim financial statements of Victory Divide
      Company for the nine months ended September 30, 2007 which were included in
      our
      quarterly report on Form 10-Q filed on November 29, 2007. The reports and
      reviews did not contain an adverse opinion or disclaimer of opinion, nor was
      it
      modified as to uncertainty, audit scope or accounting principles. There were
      no
      disagreements with Samuel H. Wong & Company, LLP on any matter of accounting
      principles or practices, financial statement disclosure, or auditing scope
      or
      procedure, which, if not resolved to the satisfaction of Samuel H. Wong &
Company, LLP, would have caused it to make reference to the subject matter
      of
      the disagreement(s) in connection with its reports.





On
      January 16, 2008, we dismissed Samuel H. Wong & Company, LLP as our
      independent accountant. On the same date, we retained Albert Wong & Company,
      LLP to serve as our principal independent accountant, as approved by our board
      of directors.





**Item
      9a. Controls And Procedures**





***Management’s
      Report on Internal Control over Financial Reporting***





Disclosure
      Controls and Procedures





As
      required by Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act,
      our
      management has carried out an evaluation, with the participation and under
      the
      supervision of our chief executive officer and chief financial officer, of
      the
      effectiveness of the design and operation of our disclosure controls and
      procedures as of December 31, 2007.





Disclosure
      controls and procedures refer to controls and other procedures designed to
      ensure that information required to be disclosed in the reports we file or
      submit under the Securities Exchange Act is recorded, processed, summarized
      and
      reported within the time periods specified in the rules and forms of the SEC
      and
      that such information is accumulated and communicated to our management,
      including our chief executive officer and chief financial officer, as
      appropriate, to allow timely decisions regarding required disclosure. In
      designing and evaluating our disclosure controls and procedures, management
      recognizes that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving the desired control
      objectives, and management is required to apply its judgment in evaluating
      and
      implementing possible controls and procedures.





Management
      conducted its evaluation of disclosure controls and procedures under the
      supervision of our chief executive officer and our chief financial officer.
      Based upon, and as of the date of this evaluation, our chief executive officer
      and chief financial officer concluded that, as of December 31, 2007, our
      disclosure controls and procedures were not effective due to the material
      weaknesses and significant deficiencies in our internal control over financial
      reporting described below.





Management’s
      Report on Internal Control over Financial Reporting





Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
      under the Securities Exchange Act. The Company's internal control system over
      financial reporting is a process designed under the supervision of the Company's
      Chief Executive Officer and Chief Financial Officer to provide reasonable
      assurance regarding the reliability of financial reporting and the preparation
      of the consolidated financial statements in accordance with United States
      generally accepted accounting principles (“U.S. GAAP”). Because of its inherent
      limitations, internal control over financial reporting may not prevent or detect
      misstatements. Also, projections of any evaluation of effectiveness to future
      periods are subject to the risk that controls may become inadequate because
      of
      changes in conditions, or that the degree of compliance with the policies and
      procedures may deteriorate.





A
      material weakness is a deficiency, or a combination of deficiencies, in internal
      control over financial reporting, such that there is a reasonable possibility
      that a material misstatement of our annual or interim financial statements
      will
      not be prevented or detected on a timely basis. A significant deficiency is
      a
      deficiency, or a combination of deficiencies, in internal control over financial
      reporting that is less severe than a material weakness, yet important enough
      to
      merit attention by those responsible for oversight of our financial
      reporting.





Management
      assessed the effectiveness of our internal control over financial reporting
      as
      of December 31, 2007. In making this assessment, we used the criteria set forth
      by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
      in Internal Control - Integrated Framework. Based on our assessment, we
      determined that, as of December 31, 2007, our internal control over financial
      reporting was not effective as a result of the following identified material
      weakness and significant deficiencies.





The
      significant deficiencies and material weaknesses include: there is no complete
      version of Code of Conduct has been formulated; there is lack of the articles
      for the board of directors and of independent directors; special committees
      of
      the board have not been established; no formal accounting manual has been
      issued; the procedures for managing the management procedures have not been
      stipulated. They will be described in details in the section “Management’s
      Remediation Initiatives and Interim Measures” below.





As
      we
      have disclosed in our prior SEC filings, we conduct all of our operations
      through our Chinese operating subsidiaries, which were privately owned until
      October 2007. At the time of their acquisition, these Chinese companies did
      not
      have in place the financial controls and procedures required of a U.S. public
      company. Now as a public company, we are implementing and will continue to
      implement remediation initiatives and interim measures with respect to our
      internal controls over financial reporting.




-45-




***Management’s
      Remediation Initiatives and Interim Measures***





The
      following is a description of each deficiency or weakness with respect to our
      internal controls over financial reporting identified by our outside auditors
      and the remediation initiatives that we have implemented or intend to implement
      in the near future.





1)
            The
                Company has not formulated a complete Code of Conduct applicable
                to all
                staff, with Chinese and English version, defining acceptable business
                conduct, conflict of interests and other expected moral behavior,
                and
                including anti-fraud mechanism. Also the procedure ruling the drafting,
                revision, reviewing, approval and issue of the Code should be formulated.
                Besides, no formal system has been set up for reporting of
                fraud.





*Remediation
      Initiative*





We
      are
      now drafting a Code of Conduct, and expect to finalize it in the third quarter
      of 2008. Meanwhile we will formulate a procedure ruling the drafting, revision,
      reviewing, approval and issue of the Code, which is also to be done in the
      third
      quarter. The Code and the procedure will then be reviewed thoroughly and
      approved by the board of directors. We will also establish a channel for issuing
      and communicating the Code of Conduct to all staff, and the Code will be issued
      and distributed formally, while we will start communication and training at
      the
      same time.





The
      cost
      involved will include that of drafting, revision, reviewing and approval,
      issuing and distributing, and communicating and training.




2)
            The
                Company does not have a formal system for employees to report and
                expose
                fraud.





*Remediation
      Initiative*





Currently
      we have a hot-line telephone system for reporting fraud. We will develop this
      into a formal mechanism of anti-fraud. The first stage is to design the system
      framework and determine the components to be included. Then we must develop
      the
      detailed procedures and regulations for identifying, reporting and investigating
      fraud. Such procedures and regulations will be reviewed and approved by the
      board of management. The system will then be established and implemented in
      the
      third quarter of 2008. We will then provide training to employees on how to
      use
      the system and start operation of the system after training is completed.





The
      cost
      of implementing this measure will mainly comprise the cost of designing,
      revision, reviewing and approval of the system, training employees, operating
      and maintenance of the system.




3)
            The
                Company currently does not have a complete set of Articles for the
                board
                of directors. The Company now does not have any independent director.





*Remediation
      Initiative*





We
      are
      now drafting the Articles for the board of directors. The step is expected
      to be
      completed in the third quarter of 2008. It will then be reviewed and approved
      by
      the board of directors. Meanwhile, we are now also seeking appropriate
      candidates for at least 3 independent directors through various channels. The
      board of directors will then review the career and educational background of
      each candidate and interview them, and make final decision by the end of October
      2008.





The
      measure will incur the costs of drafting, revision, reviewing and approval
      of
      the Articles, finding appropriate candidates, reviewing of personal background,
      and interviewing.




4)
            The
                special committees of the board, including audit committee, appointment
                committee and compensation committee, have not been
                established.





*Remediation
      Initiative*





We
      will
      establish the committees and appoint qualified directors as their members.
      Audit
      committee will be formed by at least 3 directors with appropriate level of
      financial knowledge, within which there will be at least 1 financial expert.
      It’s difficult to find qualified persons for these roles, so we need some time
      to find them, and we expect that the three committees will be established by
      the
      end of October 2008.





The
      relevant costs will be that of reviewing of candidates and recruiting, and
      the
      remuneration of committee members. Currently the remuneration of a director is
      about $10,000 per year.




5)
            The
                Company does not have an accounting policy manual based on U.S. GAAP
                and
                have not formulated formal procedures on the accounting treatment
                of
                significant transactions and processes.


-46-


*Remediation
      Initiative*





We
      will
      finish drafting the accounting manual in the third quarter of 2008, and it
      will
      include accounting policies and the detailed procedures of accounting treatments
      of business transactions and other affairs in it. The manual will be released
      to
      all accounting staff, and training will start at the same time and take about
      1
      month. We are also eagerly seeking accountants or external consultants skilled
      and experienced in several key areas of accounting to enhance the competence
      of
      our accounting team. The task will be finished by the end of October 2008.





We
      expect
      that there will be the costs of studying and researching U.S. GAAP, drafting,
      revision, reviewing and approval of the accounting manual, issuing and
      distributing, and training and educating.




6)
            The
                Company does not have a formal procedure on review, update and approval
                of
                the management procedures.





*Remediation
      Initiative*





We
      will
      formulate a formal procedure on the issue, and it will be reviewed and approved
      by the board of directors by the end of the third quarter of 2008. The procedure
      will require written confirmation from key managers for the issue of management
      procedures. The procedure will be released to relevant management and
      administration staff, and training will be provided to them then. We will also
      conduct training when material change is made to the procedures.





The
      cost
      involved will include drafting, revision, reviewing and approval of the
      procedure, releasing and training.





***Changes
      in Internal Controls over Financial Reporting***





During
      the year ended December 31, 2007, there was no change in our internal controls
      over financial reporting that has materially affected, or that is reasonably
      likely to materially affect, our internal control over financial
      reporting.





**Item
      9b. Other Information**




None.


**PART
      III**





**Item
      10. Directors, Executive Officers and Corporate Governance**


**Our
      Directors and Executive Officers**





We
      have
      provided below certain information about our executive officers and directors.
      Our directors serve one-year terms or until their successors are elected
      Officers serve at the discretion of the board of directors.





**Name**
            
            **Age**
            
            **Position**Shulin
                Liu
            
            44
            
            Chief
                Executive Officer/DirectorShaocheng
                Xu
            
            33
            
            Chief
                Financial OfficerYang
                Miao
            
            36
            
            DirectorZongtai
                Guo
            
            50
            
            Director
                and Chief Operating OfficerYulin
                Liu
            
            51
            
            President
                and General Manager of Heilongjiang Yanglin Soybean Group Co.
                LtdShuhua
                Xia
            
            56
            
            Accounting
                Supervisor of Heilongjiang Yanglin Soybean Group Co.
                Ltd





The
      following is a summary of the biographical information of our
      directors and officers:





**Shulin
      Liu** ,
      is
      founder, Chairman and Chief Executive Officer of Yanglin. Mr. Liu is involved
      in
      Yanglin’s overall management and is responsible for establishing strategic
      directions. From 2002 to present, Mr. Liu has been the Chief Executive Officer,
      Chairman and Director of Yanglin when its name was changed. From 2001 to 2002,
      he jointly established Jixian County Golden Land Oil Company Limited
      (predecessor to Yanglin) with Ms. Huanqin Ding and Mr. Shulin Liu and had been
      the Chief Executive Officer, Chairman and a Director. From 1996-2000, he was
      manager of Jinxian County Longfu Food & Oil Trade Co. Ltd., Xiwang Feed
      Company, Jixian County Tianlin Food & Oil Co. Ltd in Jixian County. From
      1992 to 1996, Mr. Liu was appointed General Manger of Jixian Construction
      Material Food and Oil Trading Company. Prior to that, from 1983-1992, Mr. Liu
      assumed the positions of supervisor at the Shuangyashan Jixian County Land
      Authority, supervisor of the Minerals Resources Management Station, and manager
      of Labor Service Company of Land Bureau of Jixian County. From 1980 to 1983,
      Mr.
      Liu worked as a government officer in Shuangyashan Jixian County, Fuli Town.
      Mr.
      Liu holds a Master degree in Enterprise Management from Heilongjiang
      University.





**Shaocheng
        Xu** ,
        was
        appointed as Yanglin’s Chief Financial Officer in March 2007. Previously, he
        worked as a financial consultant in Dow Jones Business Consultants, Inc.
        from
        August 2006 t o March 2007 and as the Internal Control Supervisor at Citigroup
        Asia Pacific Operations Center from July 2005 to August 2006. From September
        2004 to July 2005, he was studying for a Master of Professional Accounting
        with
        the Shanghai University of Finance and Economics and will soon obtain the
        degree. From September 2001 to August September 2004, he was the corporate
        management coordinator for United Automotive Electronics Systems Co., Ltd.
        From
        August 1999 to September 2001, he worked as a senior customer services
        representative in Shanghai Eastern Rohm and Haas Corp. From July 1997 to
        August
        1999, he was the Manager Assistant in Shanghai Foreign Aviation Corp. Mr.
        Xu
        received his Bachelor of Arts in English from Foreign Affairs College of
        China
        in 1997. He is currently still studying for a Master of Accounting with the
        Shanghai University of Finance and Economics. Mr. Xu is also soon to be
        qualified as a Professional Accountant with the Association of Chartered
        Certified Accountants (ACCA) of the United Kingdom.


**Yang
      Miao,** joined
      Yanglin the Vice President and Secretary to the Board of Directors in August
      2006. He is currently a director of Yanglin Soybean, Inc.. Previously, he served
      as the managing director of Redwood Capital Inc., a US based investment banking
      firm,from September 2005 to July 2006, and the managing director of Yuehai
      Zhongcheng Mechanical and Electrical Equipment Company from February 2004 to
      September 2005. From 2002 to 2004, he had been studying at University of
      Aberdeen. He worked for China National Overseas Engineering Corporation as
      an expatriate project manager from August 1995 to June 2002. Mr. Miao graduated
      from Beijing University with a degree of Bachelor of Arts and obtained a MBA
      from University of Aberdeen.




**Zongtai
      Guo** , **** joined
      Yanglin as its Vice President and Chief Operating Officer in 2006. Mr. Guo
      is
      responsible sales, operations and assists Mr. Shulin Liu, Yanglin’s President
      and Chief Executive Officer, in the strategic planning and the development
      of
      Yanglin. Prior to joining Yanglin, Mr. Guo was the Vice President of Qingdao
      Haoke Family Products Company (daily housekeeping products company, such as
      soap
      and detergent)between 2004 and 2005.From 2001 to 2004, he was an Assistant
      Manager at Heilongjiang Sanjiang Food Company (manufacturing soybean products).
      He also worked in Shanghai Yikun Food Company as its General Manager from 1999
      to 2001. From 1994 to 1999, Mr. Guo also worked in various companies such as
      Hainan Longhua Company and China Xingnan Company and Heilongjiang Eight One
      Farm
      University as their Finance Manager. He graduated from Bayi Agriculture
      Development University of Heilongjiang Province, majoring degree in Enterprise
      Management and became a qualified accountant in the PRC in 1993.





**Yulin
      Liu** ,
      was
      appointed Yanglin’s President and General Manager in March 2007. He is
      responsible for Yanglin’s day-to-day operations. Mr. Liu has a strong background
      in financial management. He worked as chief internal auditor of the Central
      Bank
      of Ji Xian County between 1986 and 1989. He was the vice president of Industrial
      and Commercial Bank of China, Ji Xian County between 1989 and 2001. From January
      2002 to May 2005, he was the President of Industrial and Commercial Bank of
      China, Jianshan Branch and from May 2005 to February 2007, he was President
      of
      Industrial and Commercial Bank of China, Dianchang Branch. Mr. Liu graduated
      from Harbin Senior Finance College, majoring in Finance





**Shuhua
      Xia** ,
      joined
      Yanglin as Chief Accountant in 2003. Ms. Xia is primarily responsible for
      Yanglin’s accounting and financial operations as well as its reporting
      requirements. Prior to joining Yanglin, Ms. Xia was the Finance Manager of
      Jixian Drying Tobacco Leaf Factory from 1991-2002. She also held various
      positions in Jixian Steel and Iron Factory including Finance Manager from 1986
      to 1990, and Finance Supervisor from 1970 to 1983. Between 1983 and 1986, Ms.
      Xia pursued and obtained a Junior College degree from Jiamusi Engineering
      College.





There
      are
      no family relationships among our directors and executive officers except that
      Yulin Liu is the first cousin of Shulin Liu. There is no arrangement or
      understanding between or among our executive officers and directors pursuant
      to
      which any director or officer was or is to be selected as a director or officer,
      and there is no arrangement, plan or understanding as to whether non-management
      shareholders will exercise their voting rights to continue to elect the current
      board of directors.





Our
      directors and executive officers have not, during the past five
      years:





·
            had
                any bankruptcy petition foiled by or against any business of which
                was a
                general partner or executive officer, either at the time of the bankruptcy
                or within two years prior to that
                time,





·
            been
                convicted in a criminal proceeding and is not subject to a pending
                criminal proceeding,·
            been
                subject to any order, judgment or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining, barring, suspending or otherwise limiting
                his
                involvement in any type of business, securities, futures, commodities
                or
                banking activities; or





·
            been
                found by a court of competent jurisdiction (in a civil action), the
                Securities Exchange Commission or the Commodity Futures Trading Commission
                to have violated a federal or state securities or commodities law,
                and the
                judgment has not been reversed, suspended or
                vacate


-47-


**Board
      Composition and Committees:**




Our
      Board
      has four (4) members. We have not engaged any independent directors
      yet.





Audit
      Committee Financial Expert





Our
      board
      of directors currently acts as our audit committee.  Because we only
      recently consummated the Share Exchange Agreement and the Share Purchase
      Agreement, our board of directors is still in the process of finding an “audit
      committee financial expert” as defined in Item 401(e) of Regulation S-B and is
“independent” as that term is used in Item 7(d)(3)(iv) of Schedule 14A under the
      Securities Exchange Act.





Audit
      Committee





We
      have
      not yet formed an audit committee.  At the present time, we believe
      that the members of board of directors are collectively capable of analyzing
      and
      evaluating our financial statements and understanding internal controls and
      procedures for financial reporting.  We, however, recognize the importance
      of good corporate governance and intend to appoint an audit committee comprised
      entirely of independent directors, including at least one financial expert
      in
      the near future.





Compensation
      Committee





We
      do not presently have a Compensation Committee. Our board of directors
      presently acts as the Compensation Committee.





Nominating
      Committee





We
      do not presently have a Nominating Committee. Our board of directors
      presently acts as the Nominating Committee.





**Section
      16(a) Beneficial Ownership Reporting Compliance**





Section
      16(a) of the Exchange Act requires our executive officers, directors and
      beneficial owners of more than ten percent (10%) to report their beneficial
      ownership of equity interests in the company to the SEC. Their initial reports
      are required to be filed using the SEC's Form 3, and they are required to report
      subsequent purchases, sales, and other changes using the SEC's Form 4, which
      must be filed within two business days of most transactions. Officers,
      directors, and persons owning more than 10% of our capital shares are required
      by SEC regulations to furnish us with copies of all of reports they file
      pursuant to Section 16(a).




According
      to our records, Zhongtai Guo and Yang Miao has not filed their form 3 in a
      timely manner.





**Code
      of Ethics**





We
      currently do not have a Code of Ethics and the Board intends to adopt one in
      the
      near future.





**Item
      11 Executive Compensation**





The
        Company’s executive compensation program is designed to pay key management
        personnel competitive remuneration based on the authority, responsibility
        and
        accountability of the position held by the individual.





The
        following is a summary of the compensation paid by the company to its executive
        officers for 2007 ended December 31, 2007 and for 2006 ended December 31,
        2006.
        No other executive officers received compensation in excess of $100,000 for
        the
        year of 2007 and 2006. We did not engage in any benchmarking of compensation
        to
        set the compensation to our executive officers.


-48-


**Compensation
      Table**





**Name & Principal Position**
            
            **Year**
            
            **Salary**
              **(1)**
            
            **Bonus**
            
            **Non-Equity**
              **Incentive**
              **Plan**
              **Compensation**
            
            **All other**
              **Compensation**
            
            **Total**Shulin Liu
              (President and
                Chief Executive Officer )
            
            2007
              2006
            
            $
              $
            31,508
              40,090
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            $
              $
            31,508
              40,090Shaocheng
                Xu
              (Chief
                Financial Officer )(2)
            
            2007
            
            $
            18,905
            
            
            0
            
            
            0
            
            
            0
            
            $
            18,905Zongtai
                Guo
              (Chief
                Operational Officer )
            
            2007
              2006
            
            $
              $
            23,631
              7,517
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            $
              $
            23,631
              7,517Glenn
                A. Little
              (President,
                Chief Executive Officer Officer and Chief Financial) (3)
            
            2007
              2006
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0Yulin
                Liu
              (President
                and General Manager of Heilongjiang Yanglin Soybean Group Co.
                Ltd)(4)
            
            2007
            
            $
            23,631
            
            
            0
            
            
            0
            
            
            0
            
            $
            23,631





(1)
            The
                relevant exchange rates for financial years 2007 and 2006 are $1
                to
                RMB7.6172 and $1 to RMB7.98189.(2)
            Shaocheng
                Xu, was appointed as Yanglin’s Chief Financial Officer in March
                2007.(3)
            Mr.
                Little was appointed President, Chief Executive Officer and Chief
                Financial Officer in February 2006. He resigned from these positions
                effective October 3, 2007.(4)
            Yulin
                Liu, was appointed Yanglin’s President and General Manager in March
                2007.




Material
      Terms of Employment





Each
      of the executive officers has signed a three-year employment contract with
      Yanglin effective September 2007 until September 2010. In addition to their
      salary compensation, the executive officers are entitled to social insurance
      benefits according to PRC laws and regulations.





Termination
      of Employment





Yanglin
      can terminate the employment contract with the executive officers with immediate
      effect without any prior notice under the following circumstances: serious
      violation of Yanglin’s rules and disciplines by the executive officers, serious
      dereliction of duties by the executive officers; executive officers being
      prosecuted under Chinese criminal law.





Yanglin
      can terminate the employment contract with the executive officers with 30 days’
prior written notice under the following circumstances: unfit to perform for
      the
      jobs or any new jobs after non-work-related injury; unfit to perform for the
      jobs despite additional training; unable to reach an agreement regarding the
      employment between the executive officers and Yanglin due to major change of
      circumstances.





Compensation
      Discussion & Analysis





Yanglin
        strives to provide its named executive officers (as defined in Item 402 of
        Regulation S-K) with a competitive base salary that is in-line with their
        roles
        and responsibilities .





It
      is not
      uncommon for PRC private corporations in that locality to have base salaries
      as
      the sole and only form of compensation. The base salary level is established
      and
      reviewed based on the level of responsibilities, the experience and tenure
      of
      the individual and the current and potential contributions of the individual.
      The base salary is compared to the list of similar positions within comparable
      peer companies and with consideration of the executive’s relative experience in
      his or her position.  Base salaries are reviewed periodically and at the
      time of promotion or other changes in responsibilities.





We
      plan
      to implement a more comprehensive compensation program, which takes into account
      other elements of compensation, including without limitation, short and long
      term compensation, cash and non-cash, and other equity-based compensation such
      as stock options. Such compensation program shall be comparative to our peers
      in
      the industry and aimed to retain and attract talented individuals.





We
      will
      also consider forming a Compensation Committee comprising predominantly of
      independent directors to oversee the compensation of our named executive
      officers.





**Grants
      of Plan-Based Awards**





The
      Company currently does not have any award plans. No options were granted to
      any
      officer in 2007.





**Outstanding
      Equity Awards at Fiscal Year End**





The
      Company currently does not have an equity compensation plan. No options or
      shares of stock were granted to any officer in 2007.


-49-


**Option
      Exercises and Stock Vested**





No
      options were exercised and no shares of stock were vested in 2007.





**Pension
      Benefits**





The
      Company does not have any pension plans for its officers.





**Nonqualified
      Deferred Compensation**





There
      was
      no nonqualified deferred compensation for the officers in 2007.





**Potential
      Payment Upon Termination or Change in Control**





The
      Company currently does not have payment arrangements for its officers upon
      termination or change in control.





**Compensation
      of Directors**





We
      have
      no formal or informal arrangements or agreements to compensate our directors
      for
      services they provide as directors. We plan to implement a compensation program
      for our independent directors, as and when they are appointed, which we
      anticipate will include such elements as an annual retainer, meeting attendance
      fees and stock options. The details of such compensation program will be
      negotiated with each such director.





The
      directors for Yanglin are not compensated for their services as directors up
      till now.





**Item
      12. Security Ownership Of Certain Beneficial Owners And Management And Related
      Shareholders Matters**





The
      following table sets forth certain information with respect to the beneficial
      ownership of our voting securities following the closing of the Share Exchange
      Agreement and the Series A Convertible Preferred Stock Purchase Agreement by
      (i)
      any person or group owning more than 5% of each class of voting securities,
      (ii)
      each director, (iii) our chief executive officer and our top three most highly
      compensated officers and (iv) all executive officers and directors as a group
      as
      of March 31, 2008.


-50-


**Name and Address of Beneficial Owner**
                
                **Amount and Nature of Beneficial**
                  **Ownership (1)**
                
                **Percentage of**
                  **Class (1)****Series A**
                
                **Series B**
                
                **Common**
                  **Stock****Owner
                    of More than 5% of Class**Vision
                    Opportunity Master Fund Ltd
                  20
                    West 55thStreet, 5thFloor,
                  New
                    York, NY 10019-5373
                
                
                3,720,930
                
                
                
                
                
                
                
                
                37.2
                %Sansar
                    Capital Special Opportunity Master Fund, LP (Cayman Master)
                  Walkers
                    SPV Ltd.
                  Walkers
                    House
                  Mary
                    Street 908GT
                  Georgetown,
                    Grand Cayman
                  Cayman
                    Islands
                
                
                2,767,442
                
                
                
                
                
                
                
                
                27.7
                %Vicis
                    Capital Master Fund
                  126
                    East 56thStreey, 7thFloor,
                  New
                    York, NY 10019-5373
                
                
                2,093,023
                
                
                
                
                
                
                
                
                20.9
                %Vision
                    Opportunity Master Fund Ltd
                  20
                    West 55thStreet, 5thFloor,
                  New
                    York, NY 10019-5373 (2)
                
                
                
                
                
                3,382,664
                (2)
                
                
                
                
                43.4
                %Sansar
                    Capital Special Opportunity Master Fund, LP (Cayman Master)
                  Walkers
                    SPV Ltd.
                  Walkers
                    House
                  Mary
                    Street 908GT
                  Georgetown,
                    Grand Cayman
                  Cayman
                    Islands (2)
                
                
                
                
                
                2,515,856
                (2)
                
                
                
                
                32.3
                %Vicis
                    Capital Master Fund
                  126
                    East 56thStreey, 7thFloor,
                  New
                    York, NY 10019-5373 (2)
                
                
                
                
                
                1,902,748
                (2)
                
                
                
                
                24.4
                %Vision
                    Opportunity Master Fund Ltd
                  20
                    West 55thStreet, 5thFloor,
                  New
                    York, NY 10019-5373 (7)
                
                
                
                
                
                
                
                
                18,283,985
                (3)
                
                47.8
                %Sansar
                    Capital Special Opportunity Master Fund, LP (Cayman Master)
                    (7)
                
                
                
                
                
                
                
                
                13,208,245
                (3)
                
                39.8
                %Vicis
                    Capital Master Fund
                  126
                    East 56thStreey, 7thFloor,
                  New
                    York, NY 10019-5373 (7)
                
                
                
                
                
                
                
                
                9,989,429
                (3)
                
                33.3
                %Winner
                    State Investments Limited
                  No.
                    99, Fanrong Street, Jixian Town,
                  Heilongjiang,
                    the People’s Republic of China.
                
                
                
                
                
                
                
                
                18,200,000
                (4) (5)
                
                91.0
                %**Directors
                    and Executive Officers**Shulin
                    Liu
                  99
                    Fanrong Street, Jixian County,
                  Heilongjiang
                    Province, People’s Republic of China 155900
                
                
                
                
                
                
                
                
                9,100,000
                (5)
                
                45.5
                %Yang
                    Miao
                  99
                    Fanrong Street, Jixian County,
                  Heilongjiang
                    Province, People’s Republic of China 155900
                
                
                
                
                
                
                
                
                100,000
                
                
                0.5
                %**All
                    Directors and Executive Officers**
                
                
                
                
                
                
                
                
                9,200,000
                
                
                46
                %


(1)
              On
                  October 3, 2007, we entered and consummated a Series A Preferred
                  Agreement
                  for the sale of a total of 10,000,000 shares of our newly designated
                  Series A Preferred Shares for the purchase price of $2.15 per share.
                  Each
                  entity’s number of Series A Preferred Shares were determined by dividing
                  the amount of Purchase Price (as defined in the Series A Preferred
                  Agreement) paid by such entity by the $2.15 per share price. Each
                  share of
                  Series A Preferred Stock is convertible into one share of our Common
                  Stock. In determining beneficial ownership of our preferred stock,
                  the
                  number of shares shown includes shares which the beneficial owner
                  may
                  acquire upon exercise of warrants or options which may be acquired
                  within
                  60 days. In determining the percent of preferred stock owned by
                  a person
                  or entity on March 31, 2008, (a) the numerator is the number of
                  shares of
                  the class beneficially owned by such person or entity, including
                  shares
                  which the beneficial ownership may acquire within 60 days of exercise
                  of
                  warrants or options, and (b) the denominator is the sum of (i)
                  the total
                  shares of that class outstanding on March 31, 2008, and (ii) the
                  total
                  number of shares that the beneficial owner may acquire upon exercise
                  of
                  the warrants and option. Unless otherwise stated, each beneficial
                  owner
                  has sole power to vote and dispose of its shares.





In
      addition, in determining the percent of common stock owned by a person or entity
      on March 31, 2008, (a) the numerator is the number of shares of the class
      beneficially owned by such person and includes shares which the beneficial
      owner
      may acquire within 60 days upon conversion or exercise of a derivative security,
      and (b) the denominator is the sum of (i) the shares of that class outstanding
      on March 31, 2008, (20,000,000 shares of Common Stock)and (ii) the total number
      of shares that the beneficial owner may acquire upon conversion or exercise
      of a
      derivative security within such 60 day period. Unless otherwise stated, each
      beneficial owner has sole power to vote and dispose of the
      shares.


-51-





(2)
              Pursuant
                  to the October 3 2007 Series A Preferred Agreement, each purchaser
                  who
                  purchases not less than $4 million worth of Series A Preferred
                  Shares
                  shall also be issued a Series J Warrant, to purchase such number
                  of our
                  newly designated Series B Preferred Shares, equal to the Purchase
                  Price
                  (as defined in the Series A Preferred Agreement) paid by such purchaser
                  pursuant to this Agreement divided by $2.37 per share or, if the
                  Purchase
                  Price is reduced pursuant to Section 1.6 of the Agreement, 110%
                  of the
                  adjusted per share Purchase Price. Vision Opportunity Master Fund
                  Ltd,
                  Sansar Capital and Vicis Master Fund have exceeded this threshold
                  and have
                  been granted a Series J Warrant to purchase 3,382,664, 2,515,856
                  and
                  1,902,748 shares of our Series B Preferred Shares
                  respectively.





(3)
              Each
                  Series A Preferred Share is convertible, at the option of the holder,
                  into
                  one share of our Common Stock. Accordingly, in total, the Series
                  A
                  Preferred Shares are convertible into 10,000,000 shares of our
                  Common
                  Stock. Each share of Series B Preferred Share is convertible, at
                  the
                  option of the holder, into one share of our Common Stock. The share
                  number
                  of Common Stock is determined by assuming conversion of all Series
                  A and
                  Series B Preferred Shares, exercise of all warrants (A, B, J, C,
                  and D) by
                  the parties and then add all the numbers together, we would have
                  the
                  shares of our Common Stock for such parties. For example, for Vision
                  Opportunity Master Fund Ltd, we add all the numbers from different
                  columns
                  from the table of footnote 8 below, and we would have 18,283,985
                  shares of
                  Common Stock.




Pursuant
      to the Series A Preferred Agreement, the Purchasers shall also be issued (i)
      Series A Warrants to purchase the number of shares of our Common Stock equal
      to
      one hundred percent (100%) of the number of shares of Common Stock issuable
      upon
      conversion of the Series A Preferred Shares purchased by each Purchaser and
      (ii)
      Series B Warrants to purchase the number of shares of Common Stock equal to
      fifty percent (50%) of the number of shares of Common Stock issuable upon
      conversion of the Series A Preferred Shares purchased by each Purchaser.




Also,
                each Purchaser who purchases not less than $4 million worth of Series
                A
                Preferred shall also be issued (i) a Series J Warrant, to purchase
                such
                number of our newly designated Series B Preferred Shares, par value
                $0.001
                per share, (ii) a Series C Warrant to purchase the number of shares
                of
                Common Stock equal to one hundred percent (100%) of the number of
                Series B
                Preferred Shares purchased by such Purchaser pursuant to the Series
                J
                Warrant, and (z) a Series D Warrant to purchase the number of shares
                of
                Common Stock equal to fifty percent (50%) of the number of Series
                B
                Preferred Shares purchased by such Purchasers pursuant to the Series
                J
                Warrant.





Pursuant
      to Section 3.27 of the Series A Preferred Agreement, at no time may a Purchaser
      of preferred shares convert their preferred shares into shares of our Common
      Stock if the number of shares of Common Stock to be issued pursuant to such
      conversion would exceed, when aggregated with all other shares of Common Stock
      beneficially owned by such Purchaser at such time, the number of shares of
      Common Stock which would result in such Purchaser beneficially owning (as
      determined in accordance with Section 13(d) of the Exchange Act and the rules
      thereunder) in excess of 4.99% of the then issued and outstanding shares of
      Common Stock; provided , however ,
      that
      upon a Purchaser providing us with sixty-one (61) days notice that such
      Purchaser wishes to waive the cap, then the cap will be of no force or effect
      with regard to all or a portion of the preferred shares referenced in the waiver
      notice.




(4)
            On
                October 3, 2007, we acquired Faith Winner (BVI) in a share exchange
                transaction with Winner State (BVI), Fang Chen, Yang Miao and Ying
                Zhang.
                Winner State (BVI), Fang Chen, Yang Miao and Ying Zhang are collectively
                the owners of 100% of the Faith
                Shares.





In
      the
      Share Exchange, we received the Faith Shares from Winner State (BVI), Fang
      Chen,
      Yang Miao and Ying Zhang and in exchange we issued and delivered to them
      18,500,000 of our newly -issued shares of Common Stock. Winner State (BVI)
      received 18,200,000 shares of Common Stock.





(5)
            Winner
                State (BVI) is jointly owned in equal shares by Mr. Shulin Liu, our
                Chief
                Executive Officer and his wife, Ms. Huanqin Ding. Accordingly, shares
                of
                Common Stock issued to Winner State (BVI) as a result of the consummation
                of the Share Exchange Agreement are beneficially attributed to Mr.
                Shulin
                Liu and Ms. Huanqin Ding based on their respective shareholder percentage
                ownership in Winner State (BVI) immediately prior to the Share Exchange.
                Mr Shulin Liu was appointed our director and Chief Executive Officer
                on
                October 3, 2007.





(6)
            Mr.
                Glenn Little was appointed our President, Chief Executive Officer
                and
                Chief Financial Officer in February 2006. He resigned from these
                positions
                effective October 3, 2007. He resigned from his position as director
                on
                October 13, 2007.





(7)
            As
                of March 31, 2008, below is a breakdown of the current holdings
                of:


-52-





**Name**
            
            **Amount and Nature of Beneficial Ownership****Preferred Stock**
            
            **Common**
              **Stock**
            
            **Warrants****Series A**
            
            **Series****B**
            
            
            
            **A**
            
            **B**
            
            **J**
            
            **C**
            
            **D**Vision
                Opportunity Master Fund Ltd
            
            
            3,720,930
            
            
            **—**
            
            
            525,000
            
            
            3,720,930
            
            
            1,860,465
            
            
            3,382,664
            
            
            3,382,664
            
            
            1,691,332Sansar
                Capital Special Opportunity Master Fund, LP (Cayman
                Master)
            
            
            2,767,442
            
            
            **—**
            
            
            **—**
            
            
            2,767,442
            
            
            1,383,721
            
            
            2,515,856
            
            
            2,515,856
            
            
            1,257,928Vicis
                Capital Master Fund
            
            
            2,093,023
            
            
            **—**
            
            
            **—**
            
            
            2,093,023
            
            
            1,046,512
            
            
            1,902,748
            
            
            1,902,748
            
            
            951,374




As
      of
      March 31, 2008, we had outstanding (i) 20,000,000 shares of Common Stock, (ii)
      10,000,000 shares of Series A Preferred Shares, which were issued in a private
      placement to the Purchasers under the Series A Preferred Agreement, (iii) Series
      A Warrants to purchase an aggregate of 10,000,000 shares of Common Stock at
      $2.75 per share, (iv) Series B Warrants to purchase an aggregate of 5,000,000
      shares of Common Stock at $3.50 per share, (v) Series J Warrants to purchase
      an
      aggregate of 7,801,268 shares of Series B Preferred Shares at $2.37 per share;
      (vi) Series C Warrants to purchase an aggregate of 7,801,268 shares of Common
      Stock at $3.03 per share, (vii) Series D Warrants to purchase an aggregate
      of
      3,900,634 shares of Common Stock at $3.85 per share, (viii) Series E Warrants
      to
      purchase 1,000,000 shares of Common Stock issued to Kuhns Brothers, Inc. and
      its
      designees under the Kuhns Bros Engagement Agreement at $2.58 per share and
      (ix)
      Series F Warrants to purchase 500,000 shares of Common Stock issued to Mass
      Harmony Asset Management Limited pursuant to the Mass Harmony Financial
      Consulting Agreement at $3.01 per share.





Each
      of
      Series A, B, C, D, E and F Warrants have five year terms. Series J Warrants
      have
      an eighteen (18) month term. The Series C and D Warrants are only exercisable
      once the Series J Warrant is exercised.





**Item
      13.**  **Certain
      Relationships and Related Transactions**





Consulting
      Agreement




On
      October 3, 2007, we entered into a consulting agreement (“Consulting Agreement”)
      with our ex-President, Chief Executive Officer and Chief Financial Officer,
      Glenn A. Little. Pursuant to the Consulting Agreement, the services to be
      performed by Mr. Little include providing advice, information and true and
      correct copies of documents regarding our historical records and operations
      to
      our auditors, attorneys, officers and directors, and signing such documents
      as
      they may reasonably request and providing information to the extent the
      requested information is reasonably available to Mr. Little. In consideration
      thereof, Mr. Little will be paid the sum of $550,000; provided, however, that
      as
      a condition to the making of the foregoing payment, he shall have: (i) delivered
      a resignation from all officer positions effective upon delivery, (ii) delivered
      a resignation as director which shall be effective on the tenth (10 th )
      day
      after we mail a Schedule 14f-1 to our shareholders of record; and (iii)
      appointed Mr. Shulin Liu as our director and Chief Executive Officer and Mr.
      Shaocheng Xu as our Chief Financial Officer. Mr. Little completed the provision
      of the services and was paid $550,000 as provided in the Consulting Agreement
      on
      October 4, 2007.




Share
      Exchange Agreement





On
      October 3, 2007, we acquired Faith Winner (BVI) in a share exchange transaction
      with Winner State (BVI), Fang Chen, Yang Miao and Ying Zhang. Both Faith Winner
      (BVI) and Winner State (BVI) are companies incorporated in the British Virgin
      Islands. Winner State (BVI), Fang Chen, Yang Miao and Ying Zhang were
      collectively the owners of 100% of the outstanding voting stock of Faith Winner
      (BVI) (such shares, the “Faith Shares”; and such transaction, the “Share
      Exchange”).





In
      the
      Share Exchange, we received the Faith Shares from Winner State (BVI), Fang
      Chen,
      Yang Miao and Ying Zhang and in exchange we issued and delivered to them
      18,500,000 of our newly -issued shares of $0.001 par value common stock. The
      Share Exchange was effected pursuant to the terms of an agreement among us
      and
      Winner State (BVI), Fang Chen, Yang Miao and Ying Zhang executed on the date
      of
      the Share Exchange (the “Share Exchange Agreement”).





As
      a
      result of the consummation of the Share Exchange Agreement, (i) we ceased to
      be
      a shell company as that term is defined in Rule 12b-2 under the Exchange Act,
      (ii) Faith Winner (BVI) is now our wholly-owned subsidiary, and (iii) through
      its newly-acquired subsidiary, Faith Winner (Jixian) Agriculture Development
      Company or WFOE, we now indirectly control, through a series of contractual
      arrangements, the business of Yanglin.


-53-


Mass
      Harmony Financial Consulting Agreement





On
      November 2, 2006, Yanglin entered into a Financial Consulting Agreement (the
      “MHA Agreement”) with Mass Harmony Asset Management Limited (“MHA”). Pursuant to
      the MHA Agreement, Yanglin is to pay MHA an aggregate of RMB300,000
      (approximately US$39,891), half of which is payable within five business days
      upon the execution of the MHA Agreement, and the balance is due within five
      business days after the closing of a reverse merger.





Additionally.
      MHA is also to receive 1% of the issued and outstanding common stock of the
      Company post-private placement (including the underlying common stock of the
      Series A Preferred Stock) and warrants to purchase common stock of the Company
      valued at 5% of the dollar amount of private placement at an exercise price
      of
      140% of the Series A Preferred Stock price. i.e. 500,000 warrants.





The
      services MHA shall render, pursuant to the MHA Agreement includes initial due
      diligence on Yanglin, preparing Yanglin’s business plan and assisting in the
      corporate restructuring and financial documentation. Our incumbent director,
      Yang Miao is the Managing Director and a shareholder of MHA.





MHA
      and
      Yanglin has fully performed according to the Agreement and it has no further
      force and effect.





Contractual
      Arrangements between WFOE and Yanglin, or, PRC Restructuring
      Arrangements.




Winner
        State (BVI) (jointly owned by our CEO, Mr. Shulin Liu and his wife, Huanqin
        Ding), Yang Miao, a director of the Company, and other minor shareholders
        own
        100% of the Company. The Company, in turn, owns 100% of Faith Winner (BVI)
        after
        the share exchange occurred on October 3, 2007. Faith Winner (BVI) owns 100%
        of
        Faith Winner (Jixian) Agriculture Development Company or WFOE. Shulin Liu
        together with his wife, Huanqin Ding, own 18,200,000 shares of common stock
        of
        the Company, or 91%. Because the Company is the 100% owner of Faith Winner
        (BVI), Shulin Liu and Huanqin Ding own 91% of Faith Winner (BVI). The same
        is
        true for WFOE. Yang Miao owns 100,000 shares of common stock of the Company,
        or
        0.5%.





In
      connection with the share exchange transactions, WFOE executed a series of
      agreements with Yanglin, and as a result, WFOE acquired control over Yanglin’s
      business, personnel and finances as if it were a wholly owned subsidiary of
      WFOE
      (collectively, the "Restructuring Agreements").





In
        addition, the executive officers for WFOE and Yanglin are identical.
        Furthermore, Winner State (BVI), the Company, Faith Winner (BVI) and WFOE
        are
        holding companies. The actual business operation is carried out by
        Yanglin.





Consignment
      Agreements **





Each
        of
        Yanglin’s two shareholders (our CEO Shulin Liu and his wife Huanqin Ding)
        holding in the aggregate 100% of Yanglin’s equity interests (collectively, the
“Yanglin Shareholders”), entered into a Consignment Agreement with Faith Winner
        (BVI) (each a “Consignment Agreement” and collectively, the “Consignment
        Agreements”). Pursuant to these Consignment Agreements, each such Yanglin
        Shareholder consigned all its rights and interests as a shareholder of Yanglin
        to Faith Winner (BVI), including without limitation, its right to elect
        directors and officers, obtain information about Yanglin, dispose of the
        consigned equity interests and other shareholder rights and interests. These
        agreements will remain effective until Faith Winner (BVI) or its designees
        have
        acquired 100% of the equity interest of Yanglin or substantially all assets
        of
        Yanglin. Prior to the termination of the Consignment Agreements, the Yanglin
        Shareholders are prohibited from disposing, encumbering, consigning or
        restructuring the consigned interests without the prior written consent of
        Faith
        Winner (BVI).





Exclusive
      Purchase Option Agreement **





Under
      the
      Exclusive Purchase Option Agreement, the Yanglin Shareholders granted WFOE
      an
      exclusive option to purchase all or part of the Yanglin Shareholders’ equity
      interest in Yanglin and Yanglin granted WFOE an exclusive option to purchase
      all
      Yanglin’s assets, when and as permitted under PRC laws and regulations. The
      agreement provides that, unless otherwise required under PRC laws and
      regulations, the consideration for the equity transfer or the asset transfer
      under the agreement will be the lowest price permitted under the PRC laws and
      regulations.





Prior
      to
      the termination of the Exclusive Purchase Option Agreement, without the prior
      written consent of WFOE, Yanglin is restricted from, among other things, (i)
      supplementing or amending its articles of association or rules of the company
      in
      any manner, and changing its registered capital or shareholding structure in
      any
      manner, (ii) transferring, mortgaging or otherwise disposing of the lawful
      rights and interests to and in its assets or income, or encumbering its assets
      and income in any way that would affect WFOE’s security interest, (iii)
      incurring, assuming or guaranteeing any debts except those that are incurred
      during its normal business operation or agreed to by WFOE in advance, (iv)
      entering into any material contract (exceeding RMB5,000,000 in value), unless
      it
      is necessary for the company’s normal business operation; (v) providing any loan
      or guarantee to any third party; (vi) acquiring or consolidating with any third
      party, or investing in any third party; (vii) distributing any dividends to
      the
      shareholders in any manner, and, at WFOE’s request, shall promptly distribute
      all distributable dividends to the Yanglin Shareholders (collectively, the
      “restrictive provisions”).





The
      agreement will remain effective until WFOE or its designees have acquired 100%
      of the equity interests of Yanglin or substantially all assets of Yanglin.





Registered
      Trademark Transfer Agreement **





Under
      the
      Registered Trademark Transfer Agreement, Yanglin agreed to transfer to WFOE
      all
      of its rights in connection with the two trademarks, including without
      limitation the title of the trademarks and right to license ( the “Transferred
      Trademark”) for a purchase price of $1,000,000, which is subject to a purchase
      price adjustment based on the minimum appraised value on intellectual property
      (“IP”) rights allowed under PRC laws and regulations for such transfer.





Trademark
      Licensing Agreement **




Under
      the
      Trademark Licensing Agreement, WFOE agreed to grant an exclusive license to
      Yanglin, for a term of 10 years, to use the Transferred Trademark for an annual
      licensing fee equal to 1% of Yanglin’s revenue of that year.





Consigned
      Management Agreement **





Pursuant
      to the Consigned Management Agreement between WFOE and Yanglin, Yanglin agreed
      to entrust the business operations of Yanglin and its management to WFOE until
      WFOE acquires all equity or substantially all the assets of Yanglin (as more
      fully described in the Exclusive Purchase Option Agreement description above).
      Under the Consigned Management Agreement, WFOE will provide financial, technical
      and human resources management services to Yanglin which will enable WFOE to
      control Yanglin's operations, assets and cash flow. In turn, it will be entitled
      to 5% of Yanglin’s revenue on a yearly basis.





Loan
      Agreement **





Under
        the
        Loan Agreement, WFOE agreed to provide a loan to Yanglin in the principal
        amount
        of $17,000,000 to be used as working capital for its business operations.
        Repayment should be made in its entirety or in part, at WFOE’s option and upon
        10 days written notice, either (i) in cash, or (ii) by a transfer of equity
        interests of Yanglin or all its assets (at the minimum price allowed under
        PRC
        law with any excess over such price continuing to be subjected to the repayment
        obligation under the Loan Agreement). The Loan Agreement also provides
        restrictive provisions substantially similar to those provided under the
        Exclusive Purchase Option Agreement as described above under “Exclusive Purchase
        Option Agreement” in this Section. As of August 10, 2008, no amount of the loan
        principal, or any interest has been paid to WFOE. The loan carries no interest
        rate.




The
      source of funds for WFOE to make payment under the Intellectual Property
      Transfer Agreement and to fund the Loan Agreement is the proceeds of the Private
      Placement offering described in this prospectus.





The
      Supplier of “Yanglin” Soybean Seeds by Heilongjiang Yanglin Group Seed Co, Ltd.
      owned and managed by Mr. Shulin Liu, our chief executive officer.





We
      have
      been using a unique type of arrangements with soybean suppliers. Through our
      affiliate company, Heilongjiang Yanglin Group Seed Co. Ltd., we supply these
      farmers with “Yanglin” soybean seeds which provide higher oil yield. Pursuant to
      annual supply contracts, the farmers sell the harvested soybeans back to us.
      We
      extend favorable commercial terms to these farmers, such as low price and credit
      payment terms, for them to purchase “Yanglin” soybean seeds, and offer favorable
      price, which is higher than average market price, and cash-upon-delivery payment
      terms to the farmers for our purchases of the harvested soybeans grown from
      “Yanglin” soybean seeds. These arrangements ensure that we maintain good
      relations with our suppliers, enjoy a stable supply of soybeans that meet our
      high quality standards at competitive rates, and allow us to maintain a low
      rate
      of expenditure on raw materials.





However,
      we do not have direct relationship with and we do not make payment to Yangiln
      Group Seed Co. Ltd., other than it is owned by Mr. Liu.




To
      further ensure a consistent and supply of soybeans and to increase its volume,
      we intend to enter into similar supply agreements with other soybean farmers
      in
      the PRC.





*Procedures
      for Approval of Related Party Transactions* ****




Our
        policy is that our board of directors is charged with reviewing and approving
        all potential related party transactions.   All such related party
        transactions are then required to be reported under applicable SEC rules.
        Otherwise, we have not adopted procedures for review of, or standards for
        approval of, these transactions, but instead review such transactions on
        a
        case-by-case basis. In addition, we have not adopted any policy for recusal
        of
        interested directors in reviewing and approving these related party
        transactions.




**Item
      14. Principal Accounting Fees And Services**





October
      1, 2007, we retained Samuel H. Wong & Company, LLP as the new independent
      accountant, as approved by our board of directors. Samuel H. Wong & Company,
      LLP issued a report on the audited financial statements of Heilonjiang Yanglin
      Soybean Group Co. Ltd.. for the three years ended December 31, 2004, December
      31, 2005, and December 31, 2006 which were included in our current report on
      Form 8-K filed on October 10, 2007. Samuel H. Wong & Company, LLP also
      reviewed the interim financial statements of Heilongjiang Yanglin Soybean Group
      Co., Ltd. for the three months ended March 31, 2007 and the six months ended
      June 30, 2007, and the proforma balance sheet of Victory Divide Mining Company
      as of June 30, 2007, which were also included in our current report on Form
      8-K
      filed on October 10, 2007. Samuel H. Wong & Company, LLP also reviewed the
      interim financial statements of Victory Divide Company for the nine months
      ended
      September 30, 2007 which were included in our quarterly report on Form 10-Q
      filed on November 29, 2007.





On
      January 16, 2008, we dismissed Samuel H. Wong & Company, LLP as our
      independent accountant. On the same date, we retained Albert Wong & Company,
      LLP to serve as our principal independent accountant.





All
      of
      the services described below were approved by our board prior to performance.
      Our board has determined that the payments made to its independent accountant
      for these services are compatible with maintaining such auditor's
      independence.





**Audit
      Fees.** The
      aggregate fees billed by Samuel H. Wong & Company, LLP, for professional
      services rendered for the audit of the company’s financial statements for the
      three years ended December 31, 2004, December 31, 2005, and December 31, 2006
      as
      well as for the review of the interim financial statements ended September
      30,
      2007 are $150,000.





The
      aggregate fees billed by Albert Wong & Company, LLP for professional
      services rendered for the audit of the company’s financial statements for the
      four years ended December 31, 2004, December 31, 2005, December 31, 2006 and
      December 31, 2007 are $90,000.





**Audit-Related
      Fees.** There
      were no fees for assurance and related services by Samuel H. Wong & Company,
      LLP or Albert Wong & Company, LLP.





**Tax
      Fees.** There
      were no fees for services for the income tax returns in US by Samuel H. Wong
      & Company, LLP or Albert Wong & Company, LLP.





**All
      Other Fees** .
      There
      was no other fees for either audit-related or non-audit services billed by
      Samuel H. Wong & Company, LLP or Albert Wong & Company,
      LLP.


-54-


**PART
      IV**




**Item
      15. Exhibits And Financial Statement Schedules**





(a)
      (1) Financial Statements





(2) Financial
      Statement Schedules




None





**YANGLIN
      SOYBEAN INC. (FORMERLY KNOWN AS VICTORY DIVIDE MINING
      COMPANY)**





**CONSOLIDATED
      FINANCIAL STATEMENTS**


**DECEMBER
      31, 2007, 2006, 2005 AND 2004(Stated in US dollars)**


-55-




YANGLIN
      SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY





CONTENTS
            
            PAGESREPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            
            F-1CONSOLIDATED
                BALANCE SHEETS
            
            F-2CONSOLIDATED
                STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
            
            F-4CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS’ EQUITY
            
            F-5CONSOLIDATED
                STATEMENTS OF CASH FLOWS
            
            F-6NOTES
                TO CONSOLIDATED FINANCIAL STATEMENTS
            
            F-7


56


**ALBERT
                    WONG & CO.**
                  CERTIFIED
                    PUBLIC ACCOUNTANTS
                  7th
                    Floor, Nan Dao Commercial Building
                  359-361
                    Queen’s Road Central
                  Hong
                    Kong
                  Tel
                    : 2851 7954
                  Fax:
                    2545 4086
                  
                  ALBERT
                    WONG
                  B.Soc.,
                    Sc., LL.B., P.C.LL., Barrister-at-law, C.P.A.(Practising).
 
 To:
          The
          board of directors and stockholders of
 Yanglin
          Soybean Inc.
 
 **Report
          of Independent Registered Public Accounting Firm**
 
 We
          have
          audited the accompanying consolidated balance sheets of Yanglin Soybean
          Inc. and
          subsidiaries as of December 31, 2007, 2006, 2005 and 2004 and the related
          consolidated statements of income, stockholders' equity and cash flows
          for the
          years then ended. These consolidated financial statements are the responsibility
          of the Company's management. Our responsibility is to express an opinion
          on
          these consolidated financial statements based on our audit.
 
 We
          conducted our audit in accordance with standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audit 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 consolidated financial statements referred to above present
          fairly,
          in all material respects, the consolidated financial position of Yanglin
          Soybean
          Inc. as of December 31, 2007, 2006, 2005 and 2004 and the results of its
          operations and its cash flows for the years then ended in conformity with
          accounting principles generally accepted in the United States of
          America.
 
 Since
            our
            previous report dated March 29, 2008, it was determined that the consolidated
            financial statements needed restatement to make corrections as described
            in note
            21.
 
 Hong
                      KongMarch
                      29, 2008,
                  Albert
                      Wong & Co.except
                      for Note 22, as to which the date is August 20, 2008.
                  Certified
                      Public Accountants
  F-1
  **YANGLIN
          SOYBEAN INC.** **F/K/A
          VICTORY DIVIDE MINING COMPANY**
 
 **CONSOLIDATED
          BALANCE SHEETS**
 **AS
          AT DECEMBER 31, 2007, 2006, 2005 AND 2004**
 **(Stated
          in US Dollars)**
 
 Notes
                
                2007
                
                2006
                
                2005
                
                2004**ASSETS**Current
                    assetsCash
                    and cash equivalents
                
                
                2(j)
                
                $
                9,210,121
                
                $
                3,013,520
                
                $
                2,946,423
                
                $
                8,435,453Pledged
                    deposits
                
                
                4
                
                
                500,000
                
                
                -
                
                
                -
                
                
                -Accounts
                    receivable
                
                
                2(i)&5
                
                
                13,854
                
                
                190,989
                
                
                534,866
                
                
                536,452Inventories
                
                
                2(h)&7
                
                
                17,883,652
                
                
                7,268,594
                
                
                5,244,189
                
                
                3,256,755Advances
                    to suppliers
                
                
                
                
                
                5,736,267
                
                
                -
                
                
                1,526
                
                
                5,584Prepaid
                    VAT and other taxes
                
                
                
                
                
                2,457,137
                
                
                674,184
                
                
                607,383
                
                
                314,680Other
                    receivables
                
                
                6
                
                
                27,896
                
                
                124,767
                
                
                577,496
                
                
                520,554Total
                    current assets
                
                
                
                
                $
                35,828,927
                
                $
                11,272,054
                
                $
                9,911,883
                
                $
                13,069,478Property,
                    plant and equipment, net
                
                
                2(f)&8
                
                
                22,563,196
                
                
                20,557,531
                
                
                15,646,165
                
                
                6,177,618Land
                    use rights, net
                
                
                2(e)&9
                
                
                3,444,081
                
                
                3,416,162
                
                
                1,118,471
                
                
                1,117,938Prepaid
                    deposits for equipment and construction
                
                
                
                
                
                8,896,327
                
                
                -
                
                
                414,314
                
                
                89,164**TOTAL
                    ASSETS**
                
                
                
                
                $
                70,732,531
                
                $
                35,245,747
                
                $
                27,090,833
                
                $
                20,454,198**LIABILITIES
                    AND****STOCKHOLDERS’
                    EQUITY**Current
                    liabilitiesShort
                    term bank loans
                
                
                10
                
                $
                12,305,000
                
                $
                6,523,825
                
                $
                4,335,235
                
                $
                2,425,479Current
                    portion of long term bankloans
                
                
                12
                
                
                47,433
                
                
                51,309
                
                
                27,390
                
                
                29,149Accounts
                    payable
                
                
                
                
                
                12,921
                
                
                723,506
                
                
                535,715
                
                
                1,754,410Amounts
                    due to construction
                
                
                
                
                
                -
                
                
                885,811
                
                
                2,736,888
                
                
                -Other
                    payables
                
                
                11
                
                
                44,380
                
                
                24,763
                
                
                93,940
                
                
                150,972Customers
                    deposits
                
                
                
                
                
                2,656,777
                
                
                2,337,371
                
                
                2,404,180
                
                
                1,774,682Accrued
                    liabilities
                
                
                
                
                
                521,114
                
                
                503,734
                
                
                501,288
                
                
                215,412Total
                    current liabilities
                
                
                
                
                $
                15,587,625
                
                $
                11,050,319
                
                $
                10,634,636
                
                $
                6,350,104Long
                    term liabilities****Long
                    term bank loans
                
                
                12
                
                
                457,107
                
                
                461,777
                
                
                273,897
                
                
                320,625**TOTAL
                    LIABILITIES**
                
                
                
                
                $
                16,044,732
                
                $
                11,512,096
                
                $
                10,908,533
                
                $
                6,670,729
  See
          notes
          to consolidated financial statements
  F-2
 
 **YANGLIN
          SOYBEAN INC.** **F/K/A
          VICTORY DIVIDE MINING COMPANY**
 
 **CONSOLIDATED
          BALANCE SHEETS (Continued)**
 **AS
          AT DECEMBER 31, 2007, 2006, 2005 AND 2004**
 **(Stated
          in US Dollars)**
 
 Notes
                  
                  2007
                  
                  2006
                  
                  2005
                  
                  2004**STOCKHOLDERS’
                      EQUITY**Preferred
                      Stock – $0.001 par value 50,000,000 share authorized ; 9,999,999,
                      none, none, and none issued and outstanding as of December
                      31, 2007, 2006,
                      2005, and 2004 respectively.
                  
                  
                  13
                  
                  $
                  10,912,174
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -Common
                      stock - $0.001 par value 100,000,000 shares authorized; 20,000,003,
                      18,500,000, 18,500,000, and 18,500,000 shares issued and outstanding
                      as of
                      December 31, 2007, 2006, 2005, and 2004 respectively.
                  
                  
                  14
                  
                  
                  20,000
                  
                  
                  18,500
                  
                  
                  18,500
                  
                  
                  18,500Additional
                      paid-in capital
                  
                  
                  14
                  
                  
                  27,277,053
                  
                  
                  12,248,936
                  
                  
                  12,228,936
                  
                  
                  12,228,936Statutory
                      reserves
                  
                  
                  2(t)
                  
                  
                  3,490,834
                  
                  
                  1,716,827
                  
                  
                  643,236
                  
                  
                  270,697Retained
                      earnings
                  
                  
                  
                  
                  
                  9,421,860
                  
                  
                  8,860,198
                  
                  
                  3,077,899
                  
                  
                  1,449,363Accumulated
                      other comprehensive income
                  
                  
                  2(u)
                  
                  
                  3,565,878
                  
                  
                  889,190
                  
                  
                  213,729
                  
                  
                  (184,027
                  )$
                  54,687,799
                  
                  $
                  23,733,651
                  
                  $
                  16,182,300
                  
                  $
                  13,783,469**TOTAL
                      LIABILITIES AND****STOCKHOLDERS’
                      EQUITY**
                  
                  
                  
                  
                  $
                  70,732,531
                  
                  $
                  35,245,747
                  
                  $
                  27,090,833
                  
                  $
                  20,454,198
 
 See
          notes
          to consolidated financial statements
  F-3
 
 **YANGLIN
          SOYBEAN INC.** **F/K/A
          VICTORY DIVIDE MINING COMPANY**
 
 **CONSOLIDATED
          STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**
 **FOR
          THE YEARS ENDED DECEMBER 31, 2007, 2006, 2005 AND 2004**
 **(Stated
          in US Dollars)**
 
 Notes
                  
                  2007
                  
                  2006
                  
                  2005
                  
                  2004Net
                      sales
                  
                  
                  2(l)&19
                  
                  $
                  155,206,867
                  
                  $
                  88,078,494
                  
                  $
                  38,430,465
                  
                  $
                  26,325,611Cost
                      of sales
                  
                  
                  2(m)&19
                  
                  
                  (142,568,658
                  )
                  
                  (79,862,179
                  )
                  
                  (35,132,664
                  )
                  
                  (24,557,296
                  )Gross
                      profit
                  
                  
                  
                  
                  $
                  12,638,209
                  
                  $
                  8,216,315
                  
                  $
                  3,297,801
                  
                  $
                  1,768,315Selling
                      expenses
                  
                  
                  
                  
                  
                  (146,411
                  )
                  
                  (63,209
                  )
                  
                  (43,094
                  )
                  
                  (54,553
                  )General
                      and administrative expenses
                  
                  
                  
                  
                  
                  (1,812,450
                  )
                  
                  (1,078,184
                  )
                  
                  (1,103,262
                  )
                  
                  (902,258
                  )Income
                      from operations
                  
                  
                  
                  
                  $
                  10,679,348
                  
                  $
                  7,074,922
                  
                  $
                  2,151,445
                  
                  $
                  811,504Interest
                      expenses, net
                  
                  
                  16
                  
                  
                  (394,705
                  )
                  
                  (219,032
                  )
                  
                  (150,370
                  )
                  
                  (100,455
                  )Other
                      income-government grant
                  
                  
                  
                  
                  
                  39,385
                  
                  
                  -
                  
                  
                  -
                  
                  
                  211,168Income
                      before taxation
                  
                  
                  
                  
                  $
                  10,324,028
                  
                  $
                  6,855,890
                  
                  $
                  2,001,075
                  
                  $
                  922,217Income
                      tax
                  
                  
                  2(s)&17
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Net
                      income
                  
                  
                  
                  
                  $
                  10,324,028
                  
                  $
                  6,855,890
                  
                  $
                  2,001,075
                  
                  $
                  922,217Foreign
                      currency translation adjustment
                  
                  
                  
                  
                  
                  2,676,688
                  
                  
                  675,461
                  
                  
                  397,756
                  
                  
                  398Comprehensive
                      income
                  
                  
                  
                  
                  $
                  13,000,716
                  
                  
                  7,531,351
                  
                  
                  2,398,831
                  
                  
                  922,615Basic
                      earnings per share before dividend
                  
                  
                  15
                  
                  $
                  0.516
                  
                  $
                  0.343
                  
                  $
                  0.100
                  
                  $
                  0.046Basic
                      earnings per share after dividend
                  
                  
                  15
                  
                  $
                  0.117
                  
                  $
                  0.343
                  
                  $
                  0.100
                  
                  $
                  0.046Diluted
                      earnings per share
                  
                  
                  15
                  
                  $
                  0.069
                  
                  
                  0.343
                  
                  
                  0.100
                  
                  
                  0.046Basic
                      weighted average shareoutstanding
                  
                  
                  15
                  
                  
                  19,998,473
                  
                  
                  19,998,473
                  
                  
                  19,998,473
                  
                  
                  19,998,473Diluted
                      weighted average share outstanding
                  
                  
                  15
                  
                  
                  34,004,568
                  
                  
                  19,998,473
                  
                  
                  19,998,473
                  
                  
                  19,998,473
  See
          notes
          to consolidated financial statements
  F-4
 
 **YANGLIN
          SOYBEAN INC.** **F/K/A
          VICTORY DIVIDE MINING COMPANY**
 
 **CONSOLIDATED
          STATEMENTS OF STOCKHOLDERS’ EQUITY**
 **FOR
          THE YEARS ENDED DECEMBER 31, 2007, 2006, 2005 AND 2004**
 **(Stated
          in US Dollars)**
 
 AccumulatedCommon
                      stock
                  
                  
                  
                  Additional
                  
                  
                  
                  
                  
                  otherNumber
                  
                  
                  
                  Preferred
                  
                  paid-in
                  
                  Statutory
                  
                  Retained
                  
                  comprehensiveof
                      share
                  
                  Amount
                  
                  stock
                  
                  capital
                  
                  reserves
                  
                  earnings
                  
                  income
                  
                  TotalBal.,
                      1/1/2004
                  
                  
                  18,500,000
                  
                  $
                  18,500
                  
                  
                  -
                  
                  
                  12,049,027
                  
                  
                  119,636
                  
                  
                  678,207
                  
                  
                  (184,425
                  )
                  
                  12,680,948Net
                      income
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  922,217
                  
                  
                  -
                  
                  
                  922,217Addition
                      of capital
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  179,909
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  179,909Appropriations
                      tosurplus
                      reserves
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  151,061
                  
                  
                  (151,061
                  )
                  
                  -
                  
                  
                  -Foreign
                      currencyadjustment
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  398
                  
                  
                  398Bal.,
                      12/31/2004
                  
                  
                  18,500,000
                  
                  $
                  18,500
                  
                  
                  -
                  
                  
                  12,228,936
                  
                  
                  270,697
                  
                  
                  1,449,363
                  
                  
                  (184,027
                  )
                  
                  13,783,469Bal.,
                      1/1/2005
                  
                  
                  18,500,000
                  
                  $
                  18,500
                  
                  
                  -
                  
                  
                  12,228,936
                  
                  
                  270,697
                  
                  
                  1,449,363
                  
                  
                  (184,027
                  )
                  
                  13,783,469Net
                      income
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,001,075
                  
                  
                  -
                  
                  
                  2,001,075Appropriations
                      tosurplus
                      reserves
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  372,539
                  
                  
                  (372,539
                  )
                  
                  -
                  
                  
                  -Foreign
                      currencyadjustment
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  397,756
                  
                  
                  397,756Bal.,
                      12/31/2005
                  
                  
                  18,500,000
                  
                  $
                  18,500
                  
                  
                  -
                  
                  
                  12,228,936
                  
                  
                  643,236
                  
                  
                  3,077,899
                  
                  
                  213,729
                  
                  
                  16,182,300Bal.,
                      1/1/2006
                  
                  
                  18,500,000
                  
                  $
                  18,500
                  
                  
                  -
                  
                  
                  12,228,936
                  
                  
                  643,236
                  
                  
                  3,077,899
                  
                  
                  213,729
                  
                  
                  16,182,300Net
                      income
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  6,855,890
                  
                  
                  -
                  
                  
                  6,855,890Addition
                      of capital
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  20,000
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  20,000Appropriations
                      tosurplus
                      reserves
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  1,073,591
                  
                  
                  (1,073,591
                  )
                  
                  -
                  
                  
                  -Foreign
                      currencyadjustment
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  675,461
                  
                  
                  675,461Bal.,
                      12/31/2006
                  
                  
                  18,500,000
                  
                  $
                  18,500
                  
                  
                  -
                  
                  
                  12,248,936
                  
                  
                  1,716,827
                  
                  
                  8,860,198
                  
                  
                  889,190
                  
                  
                  23,733,651Bal.,
                      1/1/2007
                  
                  
                  18,500,000
                  
                  $
                  18,500
                  
                  
                  -
                  
                  
                  12,248,936
                  
                  
                  1,716,827
                  
                  
                  8,860,198
                  
                  
                  889,190
                  
                  
                  23,733,651Net
                      income
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  10,324,028
                  
                  
                  -
                  
                  
                  10,324,028Reverse
                      acquisition
                  
                  
                  1,497,608
                  
                  
                  1,498
                  
                  
                  -
                  
                  
                  (210,496
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (208,998
                  )Addition
                      of capital
                  
                  
                  2,395
                  
                  
                  2
                  
                  
                  10,912,174
                  
                  
                  15,238,613
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  26,150,789Dividends
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (7,988,359
                  )
                  
                  -
                  
                  
                  (7,988,359
                  )Appropriations
                      tosurplus
                      reserves
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  1,774,007
                  
                  
                  (1,774,007
                  )
                  
                  -
                  
                  
                  -Foreign
                      currencyadjustment
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,676,688
                  
                  
                  2,676,688Bal.,
                      12/31/2007
                  
                  
                  20,000,003
                  
                  $
                  20,000
                  
                  
                  10,912,174
                  
                  
                  27,277,053
                  
                  
                  3,490,834
                  
                  
                  9,421,860
                  
                  
                  3,565,878
                  
                  
                  54,687,799
 
 See
          notes
          to consolidated financial statements
  F-5
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **CONSOLIDATED
          STATEMENTS OF CASH FLOWS**
 **FOR
          THE YEARS ENDED DECEMBER 31, 2007, 2006, 2005 AND 2004**
 **(Stated
          in US Dollars)**
 
 2007
                
                2006
                
                2005
                
                2004Cash
                    flows from operating activitiesNet
                    income
                
                $
                10,324,028
                
                $
                6,855,890
                
                $
                2,001,075
                
                $
                922,217Depreciation
                
                
                2,028,313
                
                
                1,461,597
                
                
                512,370
                
                
                503,092Amortization
                
                
                78,397
                
                
                52,827
                
                
                32,542
                
                
                27,061Gain
                    on disposal of fixed assets
                
                
                (13,048
                )
                
                -
                
                
                -
                
                
                -Adjustments
                    to reconcile net income to netcash
                    (used in) provided by operating activities:Accounts
                    receivable
                
                
                182,708
                
                
                353,941
                
                
                15,498
                
                
                (77,589
                )Inventories
                
                
                (9,712,307
                )
                
                (1,814,596
                )
                
                (1,871,350
                )
                
                3,068,939Advances
                    to suppliers
                
                
                (5,508,012
                )
                
                1,544
                
                
                4,139
                
                
                (5,584
                )Prepaid
                    VAT and other taxes
                
                
                (1,667,452
                )
                
                (45,954
                )
                
                (279,892
                )
                
                470,583Other
                    receivables
                
                
                714,295
                
                
                463,017
                
                
                (40,972
                )
                
                35,130Accounts
                    payable
                
                
                (730,106
                )
                
                166,753
                
                
                (1,244,928
                )
                
                (1,747,811
                )Other
                    payables
                
                
                (698,636
                )
                
                (70,762
                )
                
                (60,051
                )
                
                (414,050
                )Customers
                    deposits
                
                
                152,225
                
                
                (142,442
                )
                
                573,510
                
                
                1,592,010Accrued
                    liabilities
                
                
                (16,561
                )
                
                (13,664
                )
                
                275,752
                
                
                (39,553
                )Net
                    cash provided by/(used in) operating activities
                
                $
                (4,866,156
                )
                $
                7,268,151
                
                $
                (82,307
                )
                $
                4,334,445Cash
                    flows from investing activitiesPayment
                    of plant and equipment
                
                
                (386,260
                )
                
                (7,251,862
                )
                
                (6,578,076
                )
                
                (199,502
                )Sales
                    proceeds of plant and equipment
                
                
                55,138
                
                
                -
                
                
                -
                
                
                -Payment
                    of construction in progress
                
                
                (11,702,842
                )
                
                -
                
                
                (716,540
                )
                
                (709,226
                )Payment
                    of land use right
                
                
                120,560
                
                
                (2,267,341
                )
                
                (4,023
                )
                
                (144,784
                )Increase
                    in restricted cash
                
                
                (500,000
                )
                
                -
                
                
                -
                
                
                -Net
                    cash used in investing activities
                
                $
                (12,413,404
                )
                $
                (9,519,203
                )
                $
                (7,298,639
                )
                $
                (1,053,512
                )Cash
                    flows from financing activitiesIssue
                    of share capital and warrants
                
                
                17,849,093
                
                
                20,000
                
                
                -
                
                
                179,906Bank
                    borrowings
                
                
                11,815,365
                
                
                6,898,366
                
                
                6,473,013
                
                
                2,385,598Bank
                    loan repayments
                
                
                (6,737,488
                )
                
                (4,696,050
                )
                
                (4,713,320
                )
                
                (2,400,296
                )Net
                    cash provided by financing activities
                
                $
                22,926,970
                
                $
                2,222,316
                
                $
                1,759,693
                
                $
                165,208Net
                    in cash and cash equivalents (used)/sourced
                
                
                5,647,410
                
                
                (28,736
                )
                
                (5,621,253
                )
                
                3,446,141Effect
                    of foreign currency translation on cash andcash
                    equivalents
                
                
                549,091
                
                
                95,833
                
                
                132,223
                
                
                425Cash
                    and cash equivalents–beginning of year
                
                
                3,013,520
                
                
                2,946,423
                
                
                8,435,453
                
                
                4,988,887Cash
                    and cash equivalents–end of year
                
                $
                9,210,121
                
                $
                3,013,520
                
                $
                2,946,423
                
                $
                8,435,453
 Supplementary
                    cash flow information:Interest
                    received
                
                $
                64,277
                
                $
                26,715
                
                $
                5,721
                
                $
                2,686Interest
                    paid
                
                
                457,647
                
                
                244,723
                
                
                155,925
                
                
                103,057
 See
            notes
            to consolidated financial statements
  F-6
  **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **1.**  **ORGANIZATION
          AND** **PRINCIPAL
          ACTIVITIES**
 
 Yanglin
          Soybean Inc. (the “Company”) was incorporated in the state of Nevada on May 26,
          1921. Prior to October 3, 2007 the company has only nominal operations
          and
          assets.
 
 On
          October 3, 2007, the Company executed a reverse-merger with Faith Winner
          Investments Limited (“Faith Winner (BVI)”) by an exchange of shares whereby the
          Company issued 18,500,000 common shares at $0.001 par value in exchange
          for all
          Faith Winner (BVI) shares.
 
 The
          exchange transaction was accounted for as a reverse acquisition in accordance
          with Statements of Financial Accounting Standards (“SFAS”) No. 141. “Business
          Combinations”. The 1,494,173 shares of Yanglin Soybean Inc. outstanding prior to
          the stock exchange transaction were accounted for at the net book value
          at the
          time of the transaction, which was a deficit of $210,496. Accordingly,
          the
          consolidated statements of income include the results of operations of
          Heilongjiang Yanglin Soybean Group Co., Ltd from the acquisition date through
          December 31, 2007, 2006, 2005, and 2004.
 
 Faith
            Winner (BVI) formed Faith Winner (Jixian) Agriculture Development Company
            (“Faith Winner (Jixian)” or “WFOE”), which entered into a series of agreements
            with Heilongjiang Yanglin Soybean Group Co., Ltd. (“Yanglin”) including but not
            limited to management, loan, purchase option, consignment, trademark
            licensing,
            non-competion, etc. The Consignment Agreements was entered on September
            1, 2007,
            and the other agreements were all signed on September 24, 2007. As a
            result of
            entering the abovementioned agreements, WFOE deem to control Yanglin
            as a
            Variable Interest Entity as required by FASB Interpretation No. 46 (revised
            December 2003) Consolidated of Variable Interest Entities, and Interpretation
            of
            ARB No. 51. The reverse-merger also included an equity financing of $21,500,000
            by the issuance of 10,000,000 Series A Convertible Preferred Stock at
            $2.15 per
            share to 10 accredited investors.
 
 The
          Company, through its subsidiaries and Yanglin, (hereinafter, collectively
          referred to as “the Group”), is now in the business of manufacturing,
          distribution, and selling of non-genetically modified soybean oil, soybean
          salad
          oil, and soybean meal throughout the Province of Heilongjiang,
          China.
  F-7
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **2.**  **SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES**
 
 *(a)* *Method
          of Accounting*
 
 The
          Company maintains its general ledger and journals with the accrual method
          accounting for financial reporting purposes. The financial statements and
          notes
          are representations of management. Accounting policies adopted by the Company
          conform to generally accepted accounting principles in the United States
          of
          America and have been consistently applied in the presentation of financial
          statements.
 
 The
          share
          exchange transaction has been accounted for as a recapitalization of Yanglin
          Soybean Inc. where the Company (the legal acquirer) is considered the accounting
          acquiree and Faith Winner (BVI) (the legal acquiree) is considered the
          accounting acquirer. As a result of this transaction, the Company is deemed
          to
          be a continuation of the business of Faith Winner (BVI).
 
 Accordingly,
          the accompanying financial statements are those of the accounting acquirer:
          Faith Winner (BVI). The historical stockholders’ equity of the accounting
          acquirer prior to the share exchange has been retroactively restated as
          if the
          share exchange transaction occurred as of the beginning of the first period
          presented.
 
 *(b)* *Principles
          of Consolidation*
 
 The
          consolidated financial statements, which include the Company and its
          subsidiaries, are complied in accordance with generally accepted accounting
          principles in the United States of America. All significant inter-company
          accounts and transactions have been eliminated. The consolidated financial
          statements include 100% of assets, liabilities, and net income or loss
          of those
          wholly-owned subsidiaries.
 
 The
          company owned the three subsidiaries since its reverse-merger on October
          3,
          2007. Retroactively restated as of December 31, 2006, 2005, and 2004, the
          detailed identities of the consolidating subsidiaries would have been as
          follows:
 
 Name
                    of Company
                
                Place
                    of
                  incorporation
                
                Attributable
                  interestFaith
                    Winner Investments Ltd
                
                
                British Virgin Islands
                
                
                100
                %Faith
                    Winner (Jixian) Agriculture Development Company
                
                
                PRC
                
                
                100
                %Heilongjiang
                    Yanglin Soybean Group Co. Ltd
                
                
                PRC
                
                
                100
                %*Deemed
                    variable interest entity member
 
  F-8
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **2.**  **SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES (** **Continued** **)**
 
 *(c)* *Use
          of estimates*
 
 The
          preparation of the financial statements in conformity with generally accepted
          accounting principles in the United States of America requires management
          to
          make estimates and assumptions that affect the reported amounts of assets
          and
          liabilities and disclosure of contingent assets and liabilities at the
          date of
          the financial statements and the reported amounts of revenues and expenses
          during the reporting periods. Management made these estimates using the
          best
          information available at the time the estimates were made; however actual
          results could differ materially from those estimates.
 
 *(d)* *Economic
          and political risks*
 
 The
          Group’s operations are conducted in the PRC. Accordingly, the Company’s
          business, financial condition and results of operations may be influenced
          by the
          political, economic and legal environment in the PRC, and by the general
          state
          of the PRC economy.
  The
          Group’s operations in the PRC are subject to special considerations and
          significant risks not typically associated with companies in North America
          and
          Western Europe. These include risks associated with, among others, the
          political, economic and legal environment and foreign currency exchange.
          The
          Group’s results may be adversely affected by changes in the political and social
          conditions in the PRC, and by changes in governmental policies with respect
          to
          laws and regulations, anti-inflationary measures, currency conversion,
          remittances abroad, and rates and methods of taxation, among other
          things.
 
 *(e)* *Land
          use rights*
 
 Land
          use
          rights are stated at cost less accumulated amortisation. Amortisation is
          provided over the respective useful lives, using the straight-line method.
          Estimated useful lives are arranging from 22 to 50 years.
  F-9
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **2.**  **SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES (** **Continued** **)**
  *(f)* *Property,
          plant and equipment*
 
 Plant
          and
          equipment are carried at cost less accumulated depreciation. Depreciation
          is
          provided over their estimated useful lives, using the straight-line method.
          Estimated useful lives of the plant and equipment are as follows:
 
 Buildings
                10
                    yearsMachinery
                    and equipment
                3.5
                    - 30 yearsOffice
                    equipment
                4
                    -
                    20 yearsMotor
                    vehicles
                10
                    years
 
 The
          cost
          and related accumulated depreciation of assets sold or otherwise retired
          are
          eliminated from the accounts and any gain or loss is included in the statement
          of income. The cost of maintenance and repairs is charged to income as
          incurred,
          whereas significant renewals and betterments are capitalized.
 
 *(g)* *Accounting
          for the impairment of long-lived assets*
 
 The
          long-lived assets held and used by the Group are reviewed for impairment
          whenever events or changes in circumstances indicate that the carrying
          amount of
          assets may not be recoverable. It is reasonably possible that these assets
          could
          become impaired as a result of technology or other industry changes.
          Determination of recoverability of assets to be held and used is by comparing
          the carrying amount of an asset to future net undiscounted cash flows to
          be
          generated by the assets.
 
 If
          such
          assets are considered to be impaired, the impairment to be recognized is
          measured by the amount by which the carrying amount of the assets exceeds
          the
          fair value of the assets. Assets to be disposed of are reported at the
          lower of
          the carrying amount or fair value less costs to dispose.
 
 During
          the reporting years, there was no known impairment loss.
 
 *(h)* *Inventories*
 
 Inventories
          consist of finished goods, and raw materials, and are stated at the lower
          of
          cost or market value. Substantially all inventory costs are determined
          using the
          weighted average basis. Finished goods are comprised of direct materials,
          direct
          labor and an appropriate proportion of overhead.
  F-10
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **2.**  **SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES (** **Continued** **)**
 
 *(i)* *Trade
          receivables*
 
 Trade
            receivables are recognized and carried at the original invoice amount
            less
            allowance for any uncollectible amounts. An allowance for doubtful accounts
            is
            maintained for all customers in considering with a variety of factors,
            including
            the length of past due, significant one-time events and the company’s historical
            experience. Bad debts are written off as incurred.
 
 *(j)* *Cash
          and cash equivalents*
 
 The
          Company considers all highly liquidate investments purchased with original
          maturities of three months or less to be cash equivalents. The Company
          maintains
          bank accounts only in the PRC. The Company does not maintain any bank accounts
          in the United States of America.
 
 **2007**
                
                **2006**
                
                **2005**
                
                **2004**Cash
                    on hand
                
                
                18,362
                
                
                13,808
                
                
                39,661
                
                
                16,048Industrial
                    And Commercial Bank of China
                
                
                -
                
                
                229
                
                
                2,034
                
                
                33,098Agricultural
                    Development Bank of China
                
                
                1,362,651
                
                
                448,935
                
                
                371,592
                
                
                -Agricultural
                    Bank of China
                
                
                7,829,108
                
                
                2,550,548
                
                
                2,532,726
                
                
                8,385,907Bank
                    of China
                
                
                -
                
                
                -
                
                
                410
                
                
                400
 
 *(k)* *Foreign
          currency translation*
 
 The
          accompanying financial statements are presented in United States dollars.
          The
          reporting currency of the Group is the U.S. dollar (USD). Faith Winner
          (Jixian)
          and Yanglin use its local currency, Renminbi (RMB), as its functional currency.
          Results of operations and cash flow are translated at average exchange
          rates
          during the period, and assets and liabilities are translated at the end
          of
          period exchange rates. Translation adjustments resulting from this process
          are
          included in accumulated other comprehensive income in stockholders’ equity.
          Transaction gains and losses that arise from exchange rate fluctuations
          from
          transactions denominated in a currency other than the functional currency
          are
          included in the results of operations as incurred.
 
 The
          PRC
          government imposes significant exchange restrictions on fund transfers
          out of
          the PRC that are not related to business operations. These restrictions
          have not
          had a material impact on the Group because it has not engaged in any significant
          transactions that are subject to the restrictions.
 
 The
          exchange rates used to translate amounts in RMB into USD for the purposes
          of
          preparing the consolidated financial statements were as follows:
 
 **2007**
                
                **2006**
                
                **2005**
                
                **2004**Year
                    end RMB : USD exchange rate
                
                
                7.31410
                
                
                7.81750
                
                
                8.07340
                
                
                8.28650Average
                    yearly RMB : USD exchange rate
                
                
                7.61720
                
                
                7.98189
                
                
                8.20329
                
                
                8.28723
  The
          RMB
          is not freely convertible into foreign currency and all foreign exchange
          transactions must take place through authorized institutions. No representation
          is made that the RMB amounts could have been, or could be, converted into
          USD at
          the rates used in translation.
  F-11
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **2.**  **SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES (** **Continued** **)**
 
 *(l)* *Revenue
          recognition*
 
 Revenue
          represents the invoiced value of goods sold recognized upon the delivery
          of
          goods to customers. Revenue is recognized when all of the following criteria
          are
          met: Persuasive evidence of an arrangement exists, delivery has occurred
          or
          services have been rendered, the seller’s price to the buyer is fixed or
          determinable, and collection is reasonably assured.
 
 *(m)* *Costs
          of sales*
 
 Cost
          of
          sales consists primarily of direct material costs, direct labor cost, direct
          depreciation and related direct expensesattributable to the production
          of
          products. Written-down of inventory to lower of cost or market is also
          reflected
          in cost of revenues.
 
 *(n)* *Leases*
 
 The
          Group
          did not have lease which met the criteria of capital lease. Leases which
          do not
          qualify as capital lease are classified as operating lease. Operating lease
          rental payment included in general and administrative expenses were nil, $123,822,
          $113,369 and $142,388 for the years ended December 31, 2007, 2006, 2005
          and 2004
          respectively.
 
 *(o)* *Advertising*
 
 The
          Group
          expensed all advertising costs as incurred. Advertising expenses included
          in
          selling expenses were $9,167, $501, $291 and $5,015 for the years ended
          December
          31, 2007, 2006, 2005 and 2004 respectively.
 
 *(p)* *Shipping
          and handling*
 
 All
          shipping and handling are expensed as incurred. Shipping and handling expenses
          included in selling expenses were $75,347, $50,446, $28,746, and $26,055
          for the
          years ended December 31, 2007, 2006, 2005 and 2004 respectively.
 
 *(q)* *Research
          and development*
 
 All
          research and development costs are expensed as incurred. The research and
          development costs included in general and administrative expenses were
          $11,815,
          nil, nil, and nil for the years ended December 31, 2007, 2006, 2005, and
          2004
          respectively.
 
 *(r)* *Retirement
          benefits*
 
 Retirement
          benefits in the form of contributions under defined contribution retirement
          plans to the relevant authorities are charged to the statements of income
          as
          incurred. The retirement benefit funding included in general and administrative
          expenses were $168,535, $72,129, $27,073 and $24,742 for the years ended
          December 31, 2007, 2006, 2005 and 2004 respectively.
  F-12
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **2.**  **SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES (** **Continued** **)**
 
 *(s)* *Income
          taxes*
 
 The
          Group
          accounts for income tax using an asset and liability approach and allows
          for
          recognition of deferred tax benefits in future years. Under the asset and
          liability approach, deferred taxes are provided for the net tax effects
          of
          temporary differences between the carrying amounts of assets and liabilities
          for
          financial reporting purposes and the amounts used for income tax purposes.
          A
          valuation allowance is provided for deferred tax assets if it is more likely
          than not these items will either expire before the Group is able to realize
          their benefits, or that future realization is uncertain.
 
 *(t)* *Statutory
          reserves*
 
 As
          stipulated by the PRC’s Company Law and as provided in the Faith Winner
          (Jixian), and Yanglin’s Articles of Association, Faith Winner and Heilongjiang
          Yanglin’s net income after taxation can only be distributed as dividends after
          appropriation has been made for the following:
 
 (i)
              Making
                  up cumulative prior years’ losses, if
                  any; (ii)
              Allocations
                  to the “Statutory surplus reserve” of at least 10% of income after tax, as
                  determined under PRC accounting rules and regulations, until the
                  fund
                  amounts to 50% of the Company's registered capital, which is restricted
                  for set off against losses, expansion of production and operation
                  or
                  increase in registered capital; (iii)
              Allocations
                  of 5-10% of income after tax, as determined under PRC accounting
                  rules and
                  regulations, to the Company's “Statutory common welfare fund”, which is
                  restricted for capital expenditure for the collective benefits
                  of the
                  Company's employees; and (iv)
              Allocations
                  to the discretionary surplus reserve, if approved in the shareholders’
                  general meeting. 
 On
          December 31, 2001, Heilongjiang Yanglin established a statutory surplus
          reserve
          as well as a statutory common welfare fund and commenced to appropriate
          10% and
          5%, respectively of the PRC net income after taxation to these reserves.
          The
          amounts included in the statutory reserves consisted of surplus reserve
          of
          $2,327,222 and common welfare fund of $1,163,612 as of December 31,
          2007.
  *(u)* *Comprehensive
          income*
 
 Comprehensive
          income is defined to include all changes in equity except those resulting
          from
          investments by owners and distributions to owners. Among other disclosures,
          all
          items that are required to be recognized under current accounting standards
          as
          components of comprehensive income are required to be reported in a financial
          statement that is presented with the same prominence as other financial
          statements. The Group’s current component of other comprehensive income is the
          foreign currency translation adjustment.
  F-13
  **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **2.
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (** **Continued** **)**
 
 *(v)* *Recent
          accounting pronouncements*
 
 In
          September 2006, the FASB issued SFAS 157, Fair Value Measurements, which
          defines
          fair value, establishes a framework for measuring fair value in generally
          accepted accounting principles, and expands disclosures about fair value
          measurements. SFAS 157 applies under other accounting pronouncements that
          require or permit fair value measurements, where fair value is the relevant
          measurement attribute. The standard does not require any new fair value
          measurements. SFAS 157 is effective for financial statements issued for
          fiscal
          year beginning after November 15, 2007, and interim periods within that
          fiscal
          year. The Company is currently evaluating the impact of SFAS 157 on its
          operation and financial conditions.
 
 In
          September 2006, the SEC issued SAB No. 108, which provides guidance on
          the
          process of quantifying financial statement misstatements. In SAB No. 108,
          the
          SEC staff establishes an approach that requires quantification of financial
          statement errors, under both the iron-curtain and the roll-over methods,
          based
          on the effects of the error on each of the Company’s financial statements and
          the related financial statement disclosures. SAB No.108 is generally effective
          for annual financial statements in the first fiscal year ending after November
          15, 2006. The transition provisions of SAB No. 108 permit existing public
          companies to record the cumulative effect in the first year ending after
          November 15, 2006 by recording correcting adjustments to the carrying values
          of
          assets and liabilities as of the beginning of that year with the offsetting
          adjustment recorded to the opening balance of retained earnings. The Company
          does not anticipate that the adoption of this standard will have a material
          impact on these consolidated financial statements
 
 In
          February 2007, FASB issued Statement of Financial Accounting Standards
          No.
          (“SFAS”) 159, “The Fair Value Option for Financial Assets and Financial
          Liabilities - Including an Amendment of FASB Statement No. 115” (“SFAS 159”).
          SFAS 159 permits entities to choose to measure many financial instruments
          and
          certain other items at fair value. Entities that elect the fair value option
          will report unrealized gains and losses in earnings at each subsequent
          reporting
          date. The fair value option may be elected on an instrument-by-instrument
          basis,
          with a few exceptions. SFAS 159 also establishes presentation and disclosure
          requirements to facilitate comparisons between entities that choose different
          measurement attributes for similar assets and liabilities. The requirements
          of
          SFAS 159 are effective for our fiscal year beginning on January 1, 2008.
 The
          Company does not anticipate that the adoption of this standard will have
          a
          material impact on these consolidated financial statements.
 
 In
          December 2007, the SEC issued Staff Accounting Bulletin No. 110 (“SAB 110”). SAB
          110 permits companies to continue to use the simplified method, under certain
          circumstances, in estimating the expected term of “plain vanilla” options beyond
          December 31, 2007. SAB 110 updates guidance provided in SAB 107 that previously
          stated that the Staff would not expect a company to use the simplified
          method
          for share option grants after December 31, 2007. Adoption of SAB 110 is
          not
          expected to have a material impact on the Company’s consolidated financial
          statements
  F-14
  **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **2.
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (** **Continued** **)**
 
 In
          December 2007, the Financial Accounting Standards Board issued Statement
          of
          Financial Accounting Standard (“SFAS”) No. 160, "Noncontrolling Interests in
          Consolidated Financial Statements, an amendment of ARB No. 51”. SFAS 160
          establishes accounting and reporting standards for the noncontrolling interest
          in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is
          effective for fiscal years, and interim periods within those fiscal years,
          beginning on or after December 15, 2008. As such, the Company is required
          to
          adopt these provisions at the beginning of the fiscal year ended December
          31,
          2009. The Company is currently evaluating the impact of SFAS 160 on its
          consolidated financial statements but does not expect it to have a material
          effect
 
 In
          December 2007, the Financial Accounting Standards Board issued Statement
          of
          Financial Accounting Standard (“SFAS”) No. 141(R), "Business Combinations”. SFAS
          141(R) establishes principles and requirements for how the acquirer recognizes
          and measures in its financial statements the identifiable assets acquired,
          the
          liabilities assumed, an any noncontrolling interest in the acquiree, recognizes
          and measures the goodwill acquired in the business combination or a gain
          from a
          bargain purchase, and determines what information to disclose to enable
          users of
          the financial statements to evaluate the nature and financial effects of
          the
          business combination. SFAS 141(R) is effective for fiscal years, and interim
          periods within those fiscal years, beginning on or after December 15, 2008.
          As
          such, the Company is required to adopt these provisions at the beginning
          of the
          fiscal year ended December 31, 2009. The Company is currently evaluating
          the
          impact of SFAS 141(R) on its consolidated financial statements but does
          not
          expect it to have a material effect.
  F-15
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **3.**  **CONCENTRATIONS
          OF CREDIT RISK AND MAJOR CUSTOMERS**
 
 Financial
          instruments which potentially expose the Group to concentrations of credit
          risk,
          consists of cash and accounts receivable as of December 31, 2007, 2006,
          2005,
          and 2004. The Group performs ongoing evaluations of its cash position and
          credit
          evaluations to ensure sound collections and minimize credit losses
          exposure.
 
 As
          of
          December 31, 2007, 2006, 2005, and 2004, the Group’s bank deposits were all
          conducted with banks in the PRC where there is currently no rule or regulation
          mandated on obligatory insurance of bank accounts.
 
 For
          the
          years ended December 31, 2007, 2006, 2005, and 2004, all of the Group’s sales
          were generated from the PRC. In addition, all accounts receivable as of
          December
          31, 2007, 2006, 2005, and 2004 also arose in the PRC.
 
 The
          maximum amount of loss exposure due to credit risk that the Group would
          bear if
          the counter parties of the financial instruments failed to perform represents
          the carrying amount of each financial asset in the balance sheet.
 
 Normally
          the Group does not require collateral from customers or debtors.
 
 Details
          of the customer account for 10% or more of the Group’s revenue are as
          follows:
 
 Year
                    ended December 31,2007
                
                2006
                
                2005
                
                2004Customer
                    A
                
                $
                9,067,445
                
                $
                -
                
                $
                -
                
                $
                -
 
 Details
          of customer account for 10% or more of the Group’s accounts receivable are as
          follows:
 
 December
                    31,2007
                
                2006
                
                2005
                
                2004Customer
                    B
                
                $
                7,928
                
                $
                -
                
                $
                -
                
                $
                -Customer
                    C
                
                
                7,140
                
                
                -
                
                
                -
                
                
                -Customer
                    D
                
                
                -
                
                
                81,361
                
                
                -
                
                
                -Customer
                    E
                
                
                -
                
                
                111,317
                
                
                -
                
                
                -Customer
                    F
                
                
                -
                
                
                -
                
                
                63,631
                
                
                -Customer
                    G
                
                
                -
                
                
                -
                
                
                363,146
                
                
                358,222
  F-16
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **4.**  **PLEDGED
          DEPOSITS**
 
 Pledged
          deposits are restricted cash with banks for operating security
          purpose.
 
 **5.**  **ACCOUNTS
          RECEIVABLE, NET**
  2007
                
                2006
                
                2005
                
                2004Accounts
                    receivable, gross
                
                $
                15,067
                
                $
                192,678
                
                $
                537,336
                
                $
                539,000Provision
                    for doubtful debts
                
                
                (1,213
                )
                
                (1,689
                )
                
                (2,470
                )
                
                (2,548
                )$
                13,854
                
                $
                190,989
                
                $
                534,866
                
                $
                536,452
 
 All
          of
          the above accounts receivable are due within 12 months of aging.
 
 An
          analysis of the allowance for doubtful accounts for the years ended December
          31,
          2007, 2006, 2005 and 2004 is as follows:
  2007
                
                2006
                
                2005
                
                2004Balance
                    at beginning of year
                
                $
                1,689
                
                $
                2,470
                
                $
                2,548
                
                $
                2,306Addition/(reduction)
                    of bad debt expense
                
                
                (569
                )
                
                (844
                )
                
                (143
                )
                
                242Foreign
                    exchange adjustment
                
                
                93
                
                
                63
                
                
                65
                
                
                -Balance
                    at end of year
                
                $
                1,213
                
                $
                1,689
                
                
                2,470
                
                
                2,548
  Allowance
          was made when collection of the full amount is no longer probable. Management
          reviews and adjusts this allowance periodically based on historical experience,
          current economic climate as well as its evaluation of the collectibility
          of
          outstanding accounts. The Group evaluates the credit risks of its customers
          utilizing historical data and estimations of future performance.
 
 **6.**  **OTHER
          RECEIVABLES**
 
 Other
          receivables are as follows:
  2007
                  
                  2006
                  
                  2005
                  
                  2004Advances
                      to employees for purchasingmaterials
                  
                  $
                  14,108
                  
                  $
                  89,570
                  
                  $
                  492,088
                  
                  $
                  258,527Advances
                      for traveling
                  
                  
                  -
                  
                  
                  -
                  
                  
                  54,820
                  
                  
                  44,627Loans
                      to employees
                  
                  
                  9,777
                  
                  
                  14,176
                  
                  
                  10,163
                  
                  
                  213,550Sundry
                  
                  
                  4,011
                  
                  
                  21,021
                  
                  
                  20,425
                  
                  
                  3,850$
                  27,896
                  
                  $
                  124,767
                  
                  $
                  577,496
                  
                  $
                  520,554
  Loans
          to
          employees are unsecured, interest-free, and repayable on demand.
 
 **7.**  **INVENTORIES**
 
 Inventories
          comprise the followings:
  2007
                
                2006
                
                2005
                
                2004Finished
                    goods
                
                $
                537,360
                
                $
                3,106,642
                
                $
                718,697
                
                $
                1,318,048Raw
                    materials
                
                
                17,346,292
                
                
                4,161,952
                
                
                4,525,492
                
                
                1,938,707$
                17,883,652
                
                $
                7,268,594
                
                $
                5,244,189
                
                $
                3,256,755
  F-17
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **8.**  **PROPERTY,
          PLANT AND EQUIPMENT, NET**
 
 Property,
          plant and equipment comprise the followings:
 2007
                
                2006
                
                2005
                
                2004At
                    costBuilding
                
                $
                7,060,690
                
                $
                6,602,826
                
                $
                1,679,186
                
                $
                1,620,385Machinery
                    and equipment
                
                
                17,900,662
                
                
                16,709,858
                
                
                11,179,178
                
                
                4,548,975Office
                    equipment
                
                
                134,060
                
                
                110,394
                
                
                106,896
                
                
                91,942Motor
                    vehicles
                
                
                1,054,995
                
                
                708,048
                
                
                638,389
                
                
                480,454$
                26,150,407
                
                $
                24,131,126
                
                $
                13,603,649
                
                $
                6,741,756Less:
                    accumulateddepreciation
                
                
                (5,931,919
                )
                
                (3,573,595
                )
                
                (2,015,299
                )
                
                (1,456,242
                )$
                20,218,488
                
                $
                20,557,531
                
                $
                11,588,350
                
                $
                5,285,514Construction
                    in progress
                
                
                2,344,708
                
                
                -
                
                
                4,057,815
                
                
                892,104$
                22,563,196
                
                $
                20,557,531
                
                $
                15,646,165
                
                $
                6,177,618
 
 As
          of
          December 31, 2007, building with net book value of $3,135,292 and machinery
          and
          equipment with net book value of $5,190,309 of the Company were pledged
          as
          collateral under certain loan arrangements. These loans were primarily
          obtained
          for general working capital.
 
 Depreciation
            expense is included in the statement of income and comprehensive income
            as
            follows:
 2007
                
                2006
                
                2005
                
                2004Cost
                    of sales
                
                $
                1,686,129
                
                $
                1,158,120
                
                $
                420,381
                
                $
                430,279General
                    and administrativeexpenses
                
                
                342,184
                
                
                303,477
                
                
                91,989
                
                
                72,813$
                2,028,313
                
                $
                1,461,597
                
                $
                512,370
                
                $
                503,092
 
 Construction
          in progress represents direct costs of construction and design fees incurred.
          Capitalization of these costs ceases and the construction in progress is
          transferred to plant and equipment when substantially all the activities
          necessary to prepare the assets for their intended use are completed. No
          depreciation is provided until it is completed and ready for intended use.
          Capital commitments in respect of these projects are $6,199,515 at December
          31,
          2007.
 
 Construction
          in progress mainly comprises capital expenditures for construction of the
          Group’s corporate campus, including offices, factories and staff
          dormitories.
  F-18
  **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **9.**  **INTANGIBLE
          ASSETS, NET**
 
 Intangible
          assets are as follows:
 2007
                
                2006
                
                2005
                
                2004Land
                    use rights, at cost
                
                $
                3,743,422
                
                $
                3,619,839
                
                $
                1,263,465
                
                $
                1,230,970Less:
                    accumulated amortization
                
                
                (299,341
                )
                
                (203,677
                )
                
                (144,994
                )
                
                (113,032
                )$
                3,444,081
                
                $
                3,416,162
                
                $
                1,118,471
                
                $
                1,117,938
 
 Amortization
          expenses included in the costs of sales for the years ended December 31,
          2007,
          2006, 2005, and 2004 were $78,397, $52,827, $32,542, and $27,061, respectively.
          Estimated amortization expense for the next five years is approximately
          $81,646
          each year.
 
 As
          of
          December 31, 2007, land use rights with net book value of $1,233,393 of
          the
          Group were pledged as collateral under certain loan arrangements. These
          loans
          were primarily obtained for general working capital.
 
 **10.**  **SHORT
          TERM BANK LOANS**
 
 Short
          term bank loans are as follows:
 2007
                
                2006
                
                2005
                
                2004Loans
                    from Agricultural DevelopmentBank
                    of China, interest rates at 7.02%per
                    annum, due August 29, 2008
                
                $
                8,203,333
                
                $
                -
                
                $
                -
                
                $
                -Loans
                    from Agricultural DevelopmentBank
                    of China, interest rates at 7.29%per
                    annum, due November 21, 2008
                
                
                4,101,667
                
                
                -
                
                
                -
                
                
                -Loans
                    from Agricultural DevelopmentBank
                    of China, interest rates at 6.12%per
                    annum, due June 29, 2007
                
                
                -
                
                
                6,523,825Loans
                    from Industrial AndCommercial
                    Bank of China, interestrates
                    at 7.25% per annum, dueSeptember
                    18, 2006
                
                
                -
                
                
                -
                
                
                619,319
                
                
                2,353,226Loans
                    from County Deposit Centre interest rates at 7.25% per
                    annum,due
                    November 9, 2005
                
                
                -
                
                
                -
                
                
                -
                
                
                32,583
  F-19
  **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **10.**  **SHORT
          TERM BANK LOANS (Continued)**
 
 2007
                  
                  2006
                  
                  2005
                  
                  2004Loans
                      from Industrial AndCommercial
                      Bank of China, interestrates
                      at 5.58% per annum, dueDecember
                      1, 2006
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  39,670Loans
                      from Agricultural DevelopmentBank
                      of China, interest rates at 5.22%per
                      annum, due April 12, 2006
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3,715,916
                  
                  
                  -$
                  12,305,000
                  
                  $
                  6,523,825
                  
                  $
                  4,335,235
                  
                  $
                  2,425,479
 
 Interest
          paid for the years ended December 31, 2007, 2006, 2005, and 2004 were $415,632,
          $223,296, $142,951, and $92,918, respectively.
 
 **11.**  **OTHER
          PAYABLES**
 
 Other
          payables are as follows:
 
 2007
                
                2006
                
                2005
                
                2004Due
                    for employees
                
                $
                10,670
                
                $
                9,982
                
                $
                67,889
                
                $
                54,545Subsidy
                    loan from government
                
                
                -
                
                
                -
                
                
                -
                
                
                69,993Sundry
                
                
                33,710
                
                
                14,781
                
                
                26,051
                
                
                26,434$
                44,380
                
                $
                24,763
                
                $
                93,940
                
                $
                150,972
 
 Due
          for
          employees are unsecured, interest-free, and repayable on demand. They are
          travel
          and expenses reimbursements.
 
 Subsidy
          loan from government are unsecured, interest-free and due on April 30,
          2005.
  F-20
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **12.**  **LONG
          TERM BANK LOANS**
 
 Long
          term
          bank loans are as follows:
 2007
                
                2006
                
                2005
                
                2004Loans
                    from IndustrialAnd
                    Commercial Bank of China,interest
                    rates at 8.892% per annum,with
                    various installments, finaldue
                    October 28, 2016
                
                $
                504,540
                
                $
                513,086
                
                $
                301,287
                
                $
                349,774Current
                    portion due within one year
                
                
                (47,433
                )
                
                (51,309
                )
                
                (27,390
                )
                
                (29,149
                )$
                457,107
                
                $
                461,777
                
                $
                273,897
                
                $
                320,625
 
 All
          of
          the installments due in 2007 were paid on their due dates. Interest paid
          for the
          years ended December 31, 2007, 2006, 2005, and 2004 were $42,015, $21,427,
          $12,974, and $10,139, respectively.
 
 The
          future principal payments under the bank loans as of December 31,
          2007 are as
          follows:
 
 Year2008
                
                $
                47,4332009
                
                
                50,9792010
                
                
                54,5232011
                
                
                58,0672012
                
                
                61,611Thereafter
                
                
                231,927$
                504,540
  F-21
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **13.**  **PREFERRED
          STOCK AND WARRANTS**
 
 On
          October 3, 2007, the Company sold 10,000,000 shares of Series A Preferred
          Stock
          and various stock purchase warrants for cash consideration totaling $21.5
          million dollars. The exercise price, expiration date and number of share
          eligible to be purchased with the warrants are summarized in the following
          table:
 
 Series of warrant
                
                Number of shares
                
                Exercise price
                
                Contractual termSeries
                    A
                
                
                10,000,000
                
                $
                2.75
                
                
                5.00 yearsSeries
                    B
                
                
                5,000,000
                
                $
                3.50
                
                
                5.00 yearsSeries
                    J
                
                
                7,801,268
                
                $
                2.37
                
                
                1.50 yearsSeries
                    C
                
                
                7,801,268
                
                $
                3.03
                
                
                5.00 yearsSeries
                    D
                
                
                3,900,634
                
                $
                3.85
                
                
                5.00 years
 
 The
          Series A preferred stock has liquidation rights senior to common stock
          and to
          any other class or series of stock issued by the Company not designated
          as
          ranking senior to or pari passu with the Series A Preferred Share. In the
          event
          of a liquidation of the Company, holders of Series A preferred stock are
          entitled to receive a distribution equal to $2.15 per share of Series A
          preferred stock prior to any distribution to the holders of common stock
          or any
          other stock that ranks junior to the Series A Preferred Shares. The Series
          A
          preferred stock is entitled to non-cumulative dividends only upon declaration
          of
          dividends by the Company. To date, no dividends have been declared or accrued.
          The Series A preferred stock will participate based on their respective
          as-if
          conversion rates if the Company declares any dividends. Holders of Series
          A
          Preferred Shares also have voting rights required by applicable law and
          the
          relevant number of votes shall be equal to the number of shares of Common
          Stock
          issuable upon conversion of Series A Preferred Shares.
 
 The
          gross
          proceeds of the transaction were $21.5 million. The proceeds from the
          transaction were allocated to the Series A preferred stock, warrants and
          beneficial conversion feature based on the relative fair value of the
          securities. The value of the Preferred Series A was determined by reference
          to
          the market price of the common shares into which it converts, and the gross
          value of the warrants was calculated using the Black -Scholes model with
          the
          following assumptions: expected life of 5 year, volatility of 27% and an
          interest rate of 4.24%.
 
 The
          Company recognized a beneficial conversion feature discount on the Series
          A
          preferred stock at its intrinsic value, which was the fair value of the
          common
          stock at the commitment date for the Series A preferred stock investment,
          less
          the effective conversion price but limited to the $21.5 million of proceeds
          received from the sale. The Company recognized the $8.0 million beneficial
          conversion feature as an increase in paid in capital in the accompanying
          consolidated balance sheets on the date of issuance of the Series A preferred
          shares since the Series A preferred shares were convertible at the issuance
          date.
 
 The
            agreement also provides that if the Company doesn’t file, or if the registration
            statements aren’t declared effective throughout the required period, or if the
            company ceases to trade on certain exchanges as defined, the Company
            shall pay
            damages equal to 1.5% of the amount invested for each calendar month
            capped at a
            cumulative damage payment amount of 15%. Further, if the Company fails
            to obtain
            a listing on NASDAQ or the New York Stock Exchange, then 1,000,000 shares
            of
            common stock of the company will be given to the investors. The company
            is
            accounting for these penalties in accordance with FAS 5 - Accounting
            for
            Contingencies, whereby the penalty will not be recorded as a liability
            until and
            if it is probable the penalty will be incurred. No penalty has been recorded
            in
            the accompanying consolidated financial statements for this
            instance.
  F-22
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **14.**  **CAPITALIZATION**
 
 As
          a
          result of the Group’s reverse-merger on October 3, 2007, the Group’s capital
          structure has been changed. The number of common stock was 20,000,003 after
          reverse-merger. The common stock is $20,000 with paid-in capital $27,487,549.
          The new capital structure will be retroactively restated in the consolidated
          balance sheet as of December 31, 2007, 2006, 2005 and 2004.
 
 **15.**  **EARNINGS
          PER SHARE**
 
 The
          calculation of the basic and diluted earnings per share attributable to
          the
          common stock holders is based on the following data:
 
 2007
                  
                  2006
                  
                  2005
                  
                  2004Earnings:Net
                      income for the year
                  
                  $
                  10,324,028
                  
                  $
                  6,855,890
                  
                  $
                  2,001,075
                  
                  $
                  922,217Dividends
                  
                  
                  (7,988,359
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -Earnings
                      for the purpose of basicearnings
                      per share
                  
                  $
                  2,335,669
                  
                  $
                  6,855,890
                  
                  $
                  2,001,075
                  
                  $
                  922,217Effect
                      of dilutive potential commonstock
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Earnings
                      for the purpose of dilutiveearnings
                      per share
                  
                  $
                  2,335,669
                  
                  $
                  6,855,890
                  
                  $
                  2,001,075
                  
                  $
                  922,217Number
                      of shares:Weighted
                      average number ofcommon
                      stock for the purpose of basicearnings
                      per share
                  
                  
                  19,998,473
                  
                  
                  19,998,473
                  
                  
                  19,998,473
                  
                  
                  19,998,473Effect
                      of dilutive potential commonstock
                      - conversion of convertiblepreferred
                      stock
                  
                  
                  9,999,999
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Effect
                      of dilutive potential commonstock
                      - conversion of warrants
                  
                  
                  4,004,566
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Weighted
                      average number of commonstock
                      for the purpose of dilutiveearnings
                      per share
                  
                  
                  34,004,568
                  
                  
                  19,998,473
                  
                  
                  19,998,473
                  
                  
                  19,998,473Earnings
                      per shareBasic
                      earnings per share before dividend
                  
                  
                  0.516
                  
                  
                  0.343
                  
                  
                  0.100
                  
                  
                  0.046Basic
                      earnings per share after dividend
                  
                  
                  0.117
                  
                  
                  0.343
                  
                  
                  0.100
                  
                  
                  0.046Dilutive
                      earnings per share
                  
                  
                  0.069
                  
                  
                  0.343
                  
                  
                  0.100
                  
                  
                  0.046
  F-23
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **16.**  **INTEREST
          EXPENSES, NET**
 
 Interest
          expenses, net for the years ended December 31, 2007, 2006, 2005 and 2004
          are as
          follows:
 
 2007
                
                2006
                
                2005
                
                2004Interests
                    on bank borrowings
                
                $
                457,647
                
                $
                244,723
                
                $
                155,925
                
                $
                103,057Bank
                    charges
                
                
                1,335
                
                
                1,024
                
                
                166
                
                
                84Bank
                    deposit interest income
                
                
                (64,277
                )
                
                (26,715
                )
                
                (5,721
                )
                
                (2,686
                )$
                394,705
                
                $
                219,032
                
                $
                150,370
                
                $
                100,455
  **17.**  **INCOME
          TAXES**
 
 (a)
              The
                  Company is registered in the State of Nevada whereas its subsidiary,
                  Faith
                  Winner (BVI) being incorporated in the British Virgin Islands is
                  not
                  subject to any income tax and conducts all of its business through
                  its PRC
                  subsidiary, Faith Winner (Jixian) and VIE, Yanglin (see note
                  1). 
 Faith
          Winner (Jixian), and Yanglin, being registered in the PRC, are subject
          to PRC’s
          Enterprise Income Tax. Pursuant to the PRC Income Tax Laws, Enterprise
          Income
          Taxes (“EIT”) is generally imposed at a statutory rate of 33%, which comprises
          30% national income tax and 3% local income tax.
 
 However,
          Yanglin has been named as a leading enterprise in the agricultural area
          and
          awarded with a tax exemption for the years up to 2008. After 2008, review
          is
          required for the extension of the tax exemption status.
 
 A
          reconciliation between the income tax computed at the U.S. statutory rate
          and
          the Group’s provision for income tax is as follows:
 
 2007
                
                2006
                
                2005
                
                2004U.S.
                    statutory rate
                
                
                34
                %
                
                34
                %
                
                34
                %
                
                34
                %Foreign
                    income not recognized in the U.S.
                
                
                (34
                )%
                
                (34
                )%
                
                (34
                )%
                
                (34
                )%PRC
                    Enterprise Income Tax
                
                
                33
                %
                
                33
                %
                
                33
                %
                
                33
                %Tax
                    exemption
                
                
                (33
                )%
                
                (33
                )%
                
                (33
                )%
                
                (33
                )%Provision
                    for income tax
                
                
                -
                
                
                -
                
                
                -
                
                
                -
 
 (b)
              For
                  2004 to 2007, the PRC corporate income tax rate was 33%. Heilongjiang
                  Yanglin Soybean Group Co., Ltd are entitled to tax exemptions (tax
                  holidays) for 2004 to 2007. 
 Income
          before income tax expenses of $10,324,028, $6,855,890, $2,001,075, and
          $922,217
          for 2007, 2006, 2005, and 2004 respectively, was attributed to subsidiaries
          with
          operations in China. Income tax (benefit) expense related to China income
          for
          2007, 2006, 2005, and 2004 are nil, nil, nil, and nil,
          respectively.
  F-24
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **17.**  **INCOME
          TAXES (Continued)**
 
 The
          combined effects of the income tax expense exemptions and reductions available
          to the Company for the years ended December 31, 2007, 2006, 2005, and 2004
          are
          as follows:
 
 2007
                
                2006
                
                2005
                
                2004Tax
                    holiday effect
                
                $
                3,406,929
                
                
                2,262,444
                
                
                660,355
                
                
                304,332Basic
                    net income per share effect
                
                
                0.17
                
                
                0.12
                
                
                0.04
                
                
                0.02
  **18.**  **FAIR
            VALUE OF FINANCIAL INSTRUMENTS**
 
 The
          fair
          value of a financial instrument is the amount at which the instrument could
          be
          exchanged in a current transaction between willing parties. The carrying
          amounts
          of financial assets and liabilities, such as cash and cash equivalents,
          accounts
          receivable, other receivables, accounts payable, and other payables, approximate
          their fair values because of the short maturity of these instruments and
          market
          rates of interest available to the Group.
  F-25
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **19.**  **SALES BY PRODUCTS**
 
 The
          Company operates in one business segment, manufacturing, distribution,
          and
          selling of non-genetically modified soybean oil, soybean salad oil, and
          soybean
          meal throughout the Province of Heilongjiang, China.
 
 Originally,
          the Group has four product types. Since 2006, Soybean trading was ceased.
          For
          the years ended December 31, 2007, 2006, 2005 and 2004, the Group’s net sales
          and cost of sales from these four product types, soybean meal, soybean
          oil,
          soybean and salad oil products are shown as follows:
 
 *2007*
                
                *Soybean*
                
                *Soybean**meal*
                
                *oil*
                
                *Soybean*
                
                *Salad
                    oil*
                
                *Consolidated*Net
                    sales
                
                
                92,563,442
                
                
                47,071,641
                
                
                -
                
                
                15,571,784
                
                
                155,206,867Cost
                    of sales
                
                
                (86,654,275
                )
                
                (42,075,631
                )
                
                -
                
                
                (13,838,752
                )
                
                (142,568,658
                )Segment
                    result
                
                
                5,909,167
                
                
                4,996,010
                
                
                -
                
                
                1,733,032
                
                
                12,638,209
 
 *2006*
                
                *Soybean*
                
                *Soybean**meal*
                
                *oil*
                
                *Soybean*
                
                *Salad
                    oil*
                
                *Consolidated*Net
                    sales
                
                
                58,770,932
                
                
                22,149,399
                
                
                -
                
                
                7,158,163
                
                
                88,078,494Cost
                    of sales
                
                
                (53,256,342
                )
                
                (20,080,631
                )
                
                -
                
                
                (6,525,206
                )
                
                (79,862,179
                )Segment
                    result
                
                
                5,514,590
                
                
                2,068,768
                
                
                -
                
                
                632,957
                
                
                8,216,315
 
 *2005*
                
                *Soybean*
                
                *Soybean**meal*
                
                *oil*
                
                *Soybean*
                
                *Salad
                    oil*
                
                *Consolidated*Net
                    sales
                
                
                25,762,803
                
                
                11,420,786
                
                
                194,008
                
                
                1,052,868
                
                
                38,430,465Cost
                    of sales
                
                
                (23,541,691
                )
                
                (10,409,603
                )
                
                (197,274
                )
                
                (984,096
                )
                
                (35,132,664
                )Segment
                    result
                
                
                2,221,112
                
                
                1,011,183
                
                
                (3,266
                )
                
                68,772
                
                
                3,297,801
 
 *2004*
                
                *Soybean*
                
                *Soybean**meal*
                
                *oil*
                
                *Soybean*
                
                *Salad
                    oil*
                
                *Consolidated*Net
                    sales
                
                
                17,069,225
                
                
                7,153,854
                
                
                834,659
                
                
                1,267,873
                
                
                26,325,611Cost
                    of sales
                
                
                (15,849,872
                )
                
                (6,980,263
                )
                
                (728,516
                )
                
                (998,645
                )
                
                (24,557,296
                )Segment
                    result
                
                
                1,219,353
                
                
                173,591
                
                
                106,143
                
                
                269,228
                
                
                1,768,315
  F-26
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **20.**  **RELATED
          PARTIES TRANSACTIONS**
 
 The
          following material transactions with related companies, during the periods
          were
          opinion of the directors, carried out in the ordinary course of business
          and on
          normal commercial terms:
 
 On
          October 3, 2007, we entered into a consulting agreement (“Consulting Agreement”)
          with our ex-President, Chief Executive Officer and Chief Financial Officer,
          Glenn A. Little. Pursuant to the Consulting Agreement, the services to
          be
          performed by Mr. Little include providing advice, information and true
          and
          correct copies of documents regarding our historical records and operations
          to
          our auditors, attorneys, officers and directors, and signing such documents
          as
          they may reasonably request and providing information to the extent the
          requested information is reasonably available to Mr. Little. In consideration
          thereof, Mr. Little will be paid the sum of $550,000; provided, however,
          that as
          a condition to the making of the foregoing payment, he shall have: (i)
          delivered
          a resignation from all officer positions effective upon delivery, (ii)
          delivered
          a resignation as director which shall be effective on the tenth (10 th )
          day
          after we mail a Schedule 14f-1 to our shareholders of record; and (iii)
          appointed Mr. Shulin Liu as our director and Chief Executive Officer and
          Mr.
          Shaocheng Xu as our Chief Financial Officer. Mr. Little completed the provision
          of the services and was paid $550,000 as provided in the Consulting Agreement
          on
          October 4, 2007.
 
 On
          November 2, 2006, Yanglin entered into a Financial Consulting Agreement
          (the
“MHA Agreement”) with Mass Harmony Asset Management Limited (“MHA”). Pursuant to
          the MHA Agreement, Yanglin is to pay MHA an aggregate of RMB 300,000
          (approximately US$ 39,891), half of which is payable within five business
          days
          upon the execution of the MHA Agreement, and the balance is due within
          five
          business days after the closing of a reverse merger.
 Additionally.
          MHA is also to receive 1% of the issued and outstanding common stock of
          the
          Company post-private placement (including the underlying common stock of
          the
          Series A Preferred Stock) and warrants to purchase common stock of the
          Company
          valued at 5% of the dollar amount of private placement at an exercise price
          of
          140% of the Series A Preferred Stock price. i.e. 500,000 warrants.
 The
          services MHA shall render, pursuant to the MHA Agreement includes initial
          due
          diligence on Yanglin, preparing Yanglin’s business plan and assisting in the
          corporate restructuring and financial documentation. Our incumbent director,
          Yang Miao is the Managing Director and a shareholder of MHA.
  F-27
 
 **YANGLIN
          SOYBEAN INC. F/K/A VICTORY DIVIDE MINING COMPANY**
 
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(Stated
          in US Dollars)**
 
 **21.**   **RESTATEMENT**
 
 In
            the
            course of the SEC review of registration statements on Form S-1 and Form
            S-1/A
            (File Nos. 333-150822), we restated our annual report on March 29, 2008
            for the
            fiscal years ended December 31, 2007, 2006, 2005, and 2004. Our consolidated
            balance sheets as of December 31, 2007, 2006, 2005, and 2004, our consolidated
            statements of income, our consolidated statements of cash flows and our
            consolidated statements of changes in shareholders’ equity for the fiscal years
            ended December 31, 2007, 2006, 2005, and 2004, and also extended or modified
            certain notes to here consolidated financial statements. This restatement
            arose
            relating to: (1) the incorrect accounting treatment on the reverse acquisition
            including incorrect number of shares recorded as exchange for all the
            shares of
            Faith Winner Investments Limited, and the accumulated deficits had not
            been put
            into the additional paid-in capital. The impacts of the above have made the
            changes in figures as of December 31, 2007 by a decrease in additional
            paid-in
            capital by $210,496, and an increase of accumulated other comprehensive
            income
            by $210,496. The impacts of the above have made the changes in figures
            as of
            December 31, 2006, 2005, and 2004, by a decrease in share capital by
            $1,500, and
            an increase of additional paid-in capital by $1,500. (2) the inappropriate
            classification of the gain on disposal of fixed assets as other income.
            The
            impacts of the above have made the changes in figures as of December
            31, 2007 by
            a decrease in other income by $13,048, and a decrease of general &
administrative expenses by $13,048. (3) the omission of recognition of
            the
            beneficial conversion feature of convertible preferred stock as dividends.
            The
            impacts of the above have made the changes in figures as of December
            31, 2007 by
            an increase in preferred stock and decrease in retained earnings by $7,988,359.
            Also the amount of earnings for purpose of basic earnings per share decreased
            as
            $2,335,669. (4) the omission of recognition of the effect of dilutive
            potential
            common stock by conversion of warrants. The impacts of the above have
            made the
            changes in figures as of December 31, 2007 by an increase in weighted
            average
            number of common stock for the purpose of dilutive earnings per share
            by
            4,006,096, and a decrease of dilutive earnings per share by
            $0.275.
  F-28
 
 **YANGLIN
          SOYBEAN INC.**
 
 **BALANCE
          SHEETS**
 
 Original
                
                RestatedDecember
                    31,2007
                
                2007**ASSETS**Current
                    assetsCash
                    and cash equivalents
                
                $
                9,210,121
                
                $
                9,210,121Pledged
                    deposits
                
                
                500,000
                
                
                500,000Accounts
                    receivable
                
                
                13,854
                
                
                13,854Inventories
                
                
                17,883,652
                
                
                17,883,652Advances
                    to suppliers
                
                
                5,736,267
                
                
                5,736,267Prepaid
                    VAT and other taxes
                
                
                2,457,137
                
                
                2,457,137Other
                    receivables
                
                
                27,896
                
                
                27,896Total
                    current assets
                
                $
                35,828,927
                
                $
                35,828,927Property,
                    plant and equipment, net
                
                
                22,563,196
                
                
                22,563,196Land
                    use rights, net
                
                
                3,444,081
                
                
                3,444,081Prepaid
                    deposits for equipment and construction
                
                
                8,896,327
                
                
                8,896,327**TOTAL
                    ASSETS**
                
                $
                70,732,531
                
                $
                70,732,531**LIABILITIES
                    AND****STOCKHOLDERS’
                    EQUITY**Current
                    liabilitiesShort
                    term bank loans
                
                $
                12,305,000
                
                $
                12,305,000Current
                    portion of long term bank loans
                
                
                47,433
                
                
                47,433Accounts
                    payable
                
                
                12,921
                
                
                12,921Other
                    payables
                
                
                44,380
                
                
                44,380Customers
                    deposits
                
                
                2,656,777
                
                
                2,656,777Accrued
                    liabilities
                
                
                521,114
                
                
                521,114Total
                    current liabilities
                
                $
                15,587,625
                
                $
                15,587,625Long
                    term liabilitiesLong
                    term bank loans
                
                
                457,107
                
                
                457,107**TOTAL
                    LIABILITIES**
                
                $
                16,044,732
                
                $
                16,044,732
  F-29
 
 **YANGLIN
          SOYBEAN INC.**
 
 **BALANCE
          SHEETS (Continued)**
 
 Original
                
                RestatedDecember
                    31,2007
                
                2007**STOCKHOLDERS’
                    EQUITY**Preferred
                    stock – $0.001 par value50,000,000
                    share authorized ; 9,999,999 issuedand
                    outstanding as of December 31, 2007
                
                $
                10,912,174
                
                $
                2,923,815Common
                    stock - $0.001 par value100,000,000
                    shares authorized; 20,000,003shares
                    issued and outstanding as of December 31,2007
                
                
                20,000
                
                
                20,000Additional
                    paid-in capital
                
                
                27,487,549
                
                
                27,277,053Statutory
                    reserves
                
                
                3,490,834
                
                
                3,490,834Retained
                    earnings
                
                
                9,421,860
                
                
                17,410,219Accumulated
                    other comprehensive income
                
                
                3,355,382
                
                
                3,565,878$
                54,687,799
                
                $
                54,687,799**TOTAL
                    LIABILITIES AND****STOCKHOLDERS’
                    EQUITY**
                
                $
                70,732,531
                
                $
                70,732,531
  F-30
 
 **YANGLIN
          SOYBEAN INC.**
 
 **BALANCE
          SHEETS**
 
 Original
                
                RestatedDecember
                    31,2006
                
                2006**ASSETS**Current
                    assetsCash
                    and cash equivalents
                
                $
                3,013,520
                
                $
                3,013,520Accounts
                    receivable
                
                
                190,989
                
                
                190,989Inventories
                
                
                7,268,594
                
                
                7,268,594Prepaid
                    VAT and other taxes
                
                
                674,184
                
                
                674,184Other
                    receivables
                
                
                124,767
                
                
                124,767Total
                    current assets
                
                $
                11,272,054
                
                $
                11,272,054Property,
                    plant and equipment, net
                
                
                20,557,531
                
                
                20,557,531Land
                    use rights, net
                
                
                3,416,162
                
                
                3,416,162**TOTAL
                    ASSETS**
                
                $
                35,245,747
                
                $
                35,245,747**LIABILITIES
                    AND****STOCKHOLDERS’
                    EQUITY**Current
                    liabilitiesShort
                    term bank loans
                
                $
                6,523,825
                
                $
                6,523,825Current
                    portion of long term bank loans
                
                
                51,309
                
                
                51,309Accounts
                    payable
                
                
                723,506
                
                
                723,506Amounts
                    due to construction
                
                
                885,811
                
                
                885,811Other
                    payables
                
                
                24,763
                
                
                24,763Customers
                    deposits
                
                
                2,337,371
                
                
                2,337,371Accrued
                    liabilities
                
                
                503,734
                
                
                503,734Total
                    current liabilities
                
                $
                11,050,319
                
                $
                11,050,319Long
                    term liabilities****Long
                    term bank loans
                
                
                461,777
                
                
                461,777**TOTAL
                    LIABILITIES**
                
                $
                11,512,096
                
                $
                11,512,096
  F-31
 
 **YANGLIN
          SOYBEAN INC.**
 
 **BALANCE
          SHEETS (Continued)**
 
 Original
                
                RestatedDecember
                    31,2006
                
                2006**STOCKHOLDERS’
                    EQUITY**Common
                    stock - $0.001 par value100,000,000
                    shares authorized; 18,500,000shares
                    issued and outstanding as of December 31,2006
                
                $
                20,000
                
                $
                18,500Additional
                    paid-in capital
                
                
                12,247,436
                
                
                12,248,936Statutory
                    reserves
                
                
                1,716,827
                
                
                1,716,827Retained
                    earnings
                
                
                8,860,198
                
                
                8,860,198Accumulated
                    other comprehensive income
                
                
                889,190
                
                
                889,190$
                23,733,651
                
                $
                23,733,651**TOTAL
                    LIABILITIES AND****STOCKHOLDERS’
                    EQUITY**
                
                $
                35,245,747
                
                $
                35,245,747
  F-32
 
 **YANGLIN
          SOYBEAN INC.**
 
 **BALANCE
          SHEETS**
 
 Original
                
                RestatedDecember
                    31,2005
                
                2005**ASSETS**Current
                    assetsCash
                    and cash equivalents
                
                $
                2,946,423
                
                $
                2,946,423Accounts
                    receivable
                
                
                534,866
                
                
                534,866Inventories
                
                
                5,244,189
                
                
                5,244,189Advances
                    to suppliers
                
                
                1,526
                
                
                1,526Prepaid
                    VAT and other taxes
                
                
                607,383
                
                
                607,383Other
                    receivables
                
                
                577,496
                
                
                577,496Total
                    current assets
                
                $
                9,911,883
                
                $
                9,911,883Property,
                    plant and equipment, net
                
                
                15,646,165
                
                
                15,646,165Land
                    use rights, net
                
                
                1,118,471
                
                
                1,118,471Prepaid
                    deposits for equipment and construction
                
                
                414,314
                
                
                414,314**TOTAL
                    ASSETS**
                
                $
                27,090,833
                
                $
                27,090,833**LIABILITIES
                    AND****STOCKHOLDERS’
                    EQUITY**Current
                    liabilitiesShort
                    term bank loans
                
                $
                4,335,235
                
                $
                4,335,235Current
                    portion of long term bank loans
                
                
                27,390
                
                
                27,390Accounts
                    payable
                
                
                535,715
                
                
                535,715Amounts
                    due to construction
                
                
                2,736,888
                
                
                2,736,888Other
                    payables
                
                
                93,940
                
                
                93,940Customers
                    deposits
                
                
                2,404,180
                
                
                2,404,180Accrued
                    liabilities
                
                
                501,288
                
                
                501,288Total
                    current liabilities
                
                $
                10,634,636
                
                $
                10,634,636Long
                    term liabilitiesLong
                    term bank loans
                
                
                273,897
                
                
                273,897**TOTAL
                    LIABILITIES**
                
                $
                10,908,533
                
                $
                10,908,533
  F-33
 
 **YANGLIN
          SOYBEAN INC.**
 
 **BALANCE
          SHEETS (Continued)**
 
 Original
                
                RestatedDecember
                    31,2005
                
                2005**STOCKHOLDERS’
                    EQUITY**Common
                    stock - $0.001 par value100,000,000
                    shares authorized; 18,500,000shares
                    issued and outstanding as of December 31,2005
                
                $
                20,000
                
                $
                18,500Additional
                    paid-in capital
                
                
                12,227,436
                
                
                12,228,936Statutory
                    reserves
                
                
                643,236
                
                
                643,236Retained
                    earnings
                
                
                3,077,899
                
                
                3,077,899Accumulated
                    other comprehensive income
                
                
                213,729
                
                
                213,729$
                16,182,300
                
                $
                16,182,300**TOTAL
                    LIABILITIES AND****STOCKHOLDERS’
                    EQUITY**
                
                $
                27,090,833
                
                $
                27,090,833
  F-34
  **YANGLIN
          SOYBEAN INC.**
 
 **BALANCE
          SHEETS**
 
 Original
                
                RestatedDecember
                    31,2004
                
                2004**ASSETS**Current
                    assetsCash
                    and cash equivalents
                
                $
                8,435,453
                
                $
                8,435,453Accounts
                    receivable
                
                
                536,452
                
                
                536,452Inventories
                
                
                3,256,755
                
                
                3,256,755Advances
                    to suppliers
                
                
                5,584
                
                
                5,584Prepaid
                    VAT and other taxes
                
                
                314,680
                
                
                314,680Other
                    receivables
                
                
                520,554
                
                
                520,554Total
                    current assets
                
                $
                13,069,478
                
                $
                13,069,478Property,
                    plant and equipment, net
                
                
                6,177,618
                
                
                6,177,618Land
                    use rights, net
                
                
                1,117,938
                
                
                1,117,938Prepaid
                    deposits for equipment and construction
                
                
                89,164
                
                
                89,164**TOTAL
                    ASSETS**
                
                $
                20,454,198
                
                $
                20,454,198**LIABILITIES
                    AND****STOCKHOLDERS’
                    EQUITY**Current
                    liabilitiesShort
                    term bank loans
                
                $
                2,425,479
                
                $
                2,425,479Current
                    portion of long term bank loans
                
                
                29,149
                
                
                29,149Accounts
                    payable
                
                
                1,754,410
                
                
                1,754,410Other
                    payables
                
                
                150,972
                
                
                150,972Customers
                    deposits
                
                
                1,774,682
                
                
                1,774,682Accrued
                    liabilities
                
                
                215,412
                
                
                215,412Total
                    current liabilities
                
                $
                6,350,104
                
                $
                6,350,104Long
                    term liabilitiesLong
                    term bank loans
                
                
                320,625
                
                
                320,625**TOTAL
                    LIABILITIES**
                
                $
                6,670,729
                
                $
                6,670,729
  F-35
 
 **YANGLIN
          SOYBEAN INC.**
 
 **BALANCE
          SHEETS (Continued)**
 
 Original
                
                RestatedDecember
                    31,2004
                
                2004**STOCKHOLDERS’
                    EQUITY**Common
                    stock - $0.001 par value100,000,000
                    shares authorized; 18,500,000shares
                    issued and outstanding as of December 31,2004
                
                $
                20,000
                
                $
                18,500Additional
                    paid-in capital
                
                
                12,227,436
                
                
                12,228,936Statutory
                    reserves
                
                
                270,697
                
                
                270,697Retained
                    earnings
                
                
                1,449,363
                
                
                1,449,363Accumulated
                    other comprehensive income
                
                
                (184,027
                )
                
                (184,027
                )$
                13,783,469
                
                $
                13,783,469**TOTAL
                    LIABILITIES AND****STOCKHOLDERS’
                    EQUITY**
                
                $
                20,454,198
                
                $
                20,454,198
  F-36
 
 **YANGLIN
          SOYBEAN INC.**
 
 **STATEMENTS
          OF INCOME**
 
 Original
                  
                  RestatedFor Year Ended December 31,2007
                  
                  2007Net
                      sales
                  
                  $
                  155,206,867
                  
                  $
                  155,206,867Cost
                      of sales
                  
                  
                  (142,568,658
                  )
                  
                  (142,568,658
                  )Gross
                      profit
                  
                  $
                  12,638,209
                  
                  $
                  12,638,209Selling
                      expenses
                  
                  
                  (146,411
                  )
                  
                  (146,411
                  )General
                      and administrative expenses
                  
                  
                  (1,825,498
                  )
                  
                  (1,812,450
                  )Income
                      from operations
                  
                  $
                  10,666,300
                  
                  $
                  10,679,348Interest
                      expenses, net
                  
                  
                  (394,705
                  )
                  
                  (394,705
                  )Other
                      income-government grant
                  
                  
                  39,385
                  
                  
                  39,385Other
                      income-gain on disposal of fixed assets
                  
                  
                  13,048
                  
                  
                  -Income
                      before taxation
                  
                  $
                  10,324,028
                  
                  $
                  10,324,028Income
                      tax
                  
                  
                  -
                  
                  
                  -Net
                      income
                  
                  $
                  10,324,028
                  
                  $
                  10,324,028Foreign
                      currency translation adjustment
                  
                  
                  2,466,192
                  
                  
                  2,676,688Comprehensive
                      income
                  
                  $
                  12,790,220
                  
                  $
                  13,000,716Basic
                      earnings per share before dividend
                  
                  $
                  0.516
                  
                  $
                  0.516Basic
                      earnings per share after dividend
                  
                  $
                  -
                  
                  $
                  0.117Diluted
                      earnings per share
                  
                  $
                  0.344
                  
                  $
                  0.069Basic
                      weighted average share outstanding
                  
                  
                  19,998,473
                  
                  
                  19,998,473Diluted
                      weighted average share outstanding
                  
                  
                  29,998,472
                  
                  
                  34,004,568
  F-37
  **YANGLIN
            SOYBEAN INC.**
 
 **STATEMENTS
            OF INCOME**
 
 Original
                    
                    RestatedFor Year Ended December 31,2006
                    
                    2006Net
                        sales
                    
                    $
                    88,078,494
                    
                    $
                    88,078,494Cost
                        of sales
                    
                    
                    (79,862,179
                    )
                    
                    (79,862,179
                    )Gross
                        profit
                    
                    $
                    8,216,315
                    
                    $
                    8,216,315Selling
                        expenses
                    
                    
                    (63,209
                    )
                    
                    (63,209
                    )General
                        and administrative expenses
                    
                    
                    (1,078,184
                    )
                    
                    (1,078,184
                    )Income
                        from operations
                    
                    $
                    7,074,922
                    
                    $
                    7,074,922Interest
                        expenses, net
                    
                    
                    (219,032
                    )
                    
                    (219,032
                    )Income
                        before taxation
                    
                    $
                    6,855,890
                    
                    $
                    6,855,890Income
                        tax
                    
                    
                    -
                    
                    
                    -Net
                        income
                    
                    $
                    6,855,890
                    
                    $
                    6,855,890Foreign
                        currency translation adjustment
                    
                    
                    675,461
                    
                    
                    675,461Comprehensive
                        income
                    
                    $
                    7,531,351
                    
                    $
                    7,531,351Basic
                        earnings per share
                    
                    $
                    0.343
                    
                    $
                    0.343Diluted
                        earnings per share
                    
                    $
                    0.343
                    
                    $
                    0.343Basic
                        weighted average share outstanding
                    
                    
                    19,998,473
                    
                    
                    19,998,473Diluted
                        weighted average share outstanding
                    
                    
                    19,998,473
                    
                    
                    19,998,473
  F-38
  **YANGLIN
          SOYBEAN INC.**
 
 **STATEMENTS
          OF INCOME**
 
 Original
                  
                  RestatedFor Year Ended December 31,2005
                  
                  2005Net
                      sales
                  
                  $
                  38,107,145
                  
                  $
                  38,430,465Other
                      sales
                  
                  
                  323,320
                  
                  
                  -Cost
                      of sales
                  
                  
                  (35,132,664
                  )
                  
                  (35,132,664
                  )Gross
                      profit
                  
                  $
                  3,297,801
                  
                  $
                  3,297,801Selling
                      expenses
                  
                  
                  (43,094
                  )
                  
                  (43,094
                  )General
                      and administrative expenses
                  
                  
                  (1,103,262
                  )
                  
                  (1,103,262
                  )Income
                      from operations
                  
                  $
                  2,151,445
                  
                  $
                  2,151,445Interest
                      expenses, net
                  
                  
                  (150,370
                  )
                  
                  (150,370
                  )Income
                      before taxation
                  
                  $
                  2,001,075
                  
                  $
                  2,001,075Income
                      tax
                  
                  
                  -
                  
                  
                  -Net
                      income
                  
                  $
                  2,001,075
                  
                  $
                  2,001,075Foreign
                      currency translation adjustment
                  
                  
                  397,756
                  
                  
                  397,756Comprehensive
                      income
                  
                  $
                  2,398,831
                  
                  $
                  2,398,831Basic
                      earnings per share
                  
                  $
                  0.100
                  
                  $
                  0.100Diluted
                      earnings per share
                  
                  $
                  0.100
                  
                  $
                  0.100Basic
                      weighted average share outstanding
                  
                  
                  19,998,473
                  
                  
                  19,998,473Diluted
                      weighted average share outstanding
                  
                  
                  19,998,473
                  
                  
                  19,998,473
  F-39
 
 **YANGLIN
          SOYBEAN INC.**
 
 **STATEMENTS
          OF INCOME**
 
 Original
                  
                  RestatedFor
                      Year Ended December 31,2004
                  
                  2004Net
                      sales
                  
                  $
                  26,046,389
                  
                  $
                  26,325,611Other
                      sales
                  
                  
                  279,222
                  
                  
                  -Cost
                      of sales
                  
                  
                  (24,557,296
                  )
                  
                  (24,557,296
                  )Gross
                      profit
                  
                  $
                  1,768,315
                  
                  $
                  1,768,315Selling
                      expenses
                  
                  
                  (54,553
                  )
                  
                  (54,553
                  )General
                      and administrative expenses
                  
                  
                  (902,258
                  )
                  
                  (902,258
                  )Income
                      from operations
                  
                  $
                  811,504
                  
                  $
                  811,504Interest
                      expenses, net
                  
                  
                  (100,455
                  )
                  
                  (100,455
                  )Other
                      income-government grant
                  
                  
                  211,168
                  
                  
                  211,168Income
                      before taxation
                  
                  $
                  922,217
                  
                  $
                  922,217Income
                      tax
                  
                  
                  -
                  
                  
                  -Net
                      income
                  
                  $
                  922,217
                  
                  $
                  922,217Foreign
                      currency translation adjustment
                  
                  
                  398
                  
                  
                  398Comprehensive
                      income
                  
                  $
                  922,615
                  
                  $
                  922,615Basic
                      earnings per share
                  
                  $
                  0.046
                  
                  $
                  0.046Diluted
                      earnings per share
                  
                  $
                  0.046
                  
                  $
                  0.046Basic
                      weighted average share outstanding
                  
                  
                  19,998,473
                  
                  
                  19,998,473Diluted
                      weighted average share outstanding
                  
                  
                  19,998,473
                  
                  
                  19,998,473
  F-40


(3) Exhibits




The
      exhibits listed on the Exhibit Index (following the signatures section of
      this report) are included, or incorporated by reference, in this annual
      report.




**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





**YANGLIN
                  SOYBEAN, INC**(Registrant)Dated:
                  September 4, 2008
              
              /s/ Shulin
                  LiuShulin
                  LiuChief
                  Executive Officer,Chairman
                  of the Board




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





**Signature**
              ****
              **Title**
              ****
              **Date***/s/
                  Shulin Liu*
              
              
              Chief
                  Executive Officer,
              
              September
                  4, 2008Shulin
                  Liu
              
              
              Chairman
                  of the Board*/s/
                  Shaocheng Xu*
              
              
              Chief
                  Financial Officer
              
              September
                  4, 2008Shaocheng
                  Xu*/s/
                  Yang Miao*
              
              
              Director
              
              September
                  4, 2008Yang
                  Miao*/s/
                  Zongtai Guo*
              
              
              Director
              
              September
                  4, 2008Zongtai
                  Guo





EXHIBIT
      INDEX




3.1
            Articles
                of Incorporation of the registrant filed with the British Virgin
                Islands
                Registrar of Corporate Affairs on July 6, 2006, incorporated by reference
                to the exhibit of the same number to our report on Form 10-SB filed
                with
                the SEC on July 12, 2007.3.2
            Bylaws
                incorporated by reference to the exhibit of the same number to our
                report
                on Form 10-SB filed with the SEC on July 12,
                2007.




3.3
            Specimen
                of Common Stock certificate incorporated by reference to the exhibit
                of
                the same number to our report on Form 8-k filed with the SEC
                on October 10, 2007.3.4
            Certificate
                of Designations authorizing the Series A Convertible Preferred Stock
                incorporated by reference to the exhibit of the same number to our
                report
                on Form 8-k filed with the SEC on October 10,
                2007.3.5
            Certificate
                of Designations authorizing the Series B Convertible Preferred Stock
                incorporated by reference to the exhibit of the same number to our
                report
                on Form 8-k filed with the SEC on October 10,
                2007.4.1
            Form
                of Series A Warrant incorporated by reference to the exhibit of the
                same
                number to our report on Form 8-k filed with the SEC on October 10,
                2007.4.2
            Form
                of Series B Warrant incorporated by reference to the exhibit of the
                same
                number to our report on Form 8-k filed with the SEC on October 10,
                2007.4.3
            Form
                of Series J Warrant incorporated by reference to the exhibit of the
                same
                number to our report on Form 8-k filed with the SEC on October 10,
                2007.4.4
            Form
                of Series C Warrant incorporated by reference to the exhibit of the
                same
                number to our report on Form 8-k filed with the SEC on October 10,
                2007.4.5
            Form
                of Series D Warrant incorporated by reference to the exhibit of the
                same
                number to our report on Form 8-k filed with the SEC on October 10,
                2007.4.6
            Form
                of Series E Warrant issued to Kuhns Brothers, Inc. incorporated by
                reference to the exhibit of the same number to our report on Form
                8-k
                filed with the SEC on October 10, 2007.4.7
            Form
                of Series F Warrant issued to Mass Harmony Asset Management Limited
                incorporated by reference to the exhibit of the same number to our
                report
                on Form 8-k filed with the SEC on October 10,
                2007.4.8
            Registration
                Rights Agreement dated October 3, 2007, by and among the Company
                and the
                Purchasers, incorporated by reference to the exhibit of the same
                number to
                our report on Form 8-k filed with the SEC on October 10,
                2007.4.9
            Series
                J Registration Rights Agreement dated October 3, 2007, by and among
                the
                Company, Vision Opportunity Master Fund Ltd., Sansar Capital Special
                Opportunity Master Fund, LP (Cayman Master) and Vicis Capital Master
                Fund,
                incorporated by reference to the exhibit of the same number to our
                report
                on Form 8-k filed with the SEC on October 10,
                2007.








4.10
            Lock-Up
                Agreement, dated as of October 3, 2007, by and among the Company
                and
                Winner State (BVI), incorporated by reference to the exhibit of the
                same
                number to our report on Form 8-k filed with the SEC on October 10,
                2007.4.11
            Share
                Exchange Agreement, dated as of October 3, 2007 between the Company,
                Winner State (BVI), Fang Chen, Yang Miao and Ying Zhang, incorporated
                by
                reference to the exhibit of the 10.1 to our report on Form 8-k filed
                with
                the SEC on October 10, 2007.4.12
            Series
                A Convertible Preferred Stock Purchase Agreement, dated as of October
                3,
                2007 between the Company and the Purchasers, incorporated by reference
                to
                the exhibit of 10.2 to our report on Form 8-k filed with the SEC
                on October 10, 2007.




4.13
            Securities
                Escrow Agreement, dated October 3, 2007, by and between the Company,
                Vision Opportunity Master Fund, Ltd as representative of the Purchasers,
                Winner State (BVI) and Loeb & Loeb LLP, as escrow agent, incorporated
                by reference to the exhibit of 10.3 to our report on Form 8-k filed
                with
                the SEC on October 10, 2007.10.1
            Consulting
                Agreement, dated as of October 3, 2007, by and among the Company
                and Glenn
                A. Little, incorporated by reference to the exhibit of 10.4 to our
                report
                on Form 8-k filed with the SEC on October 10,
                2007.10.2
            Engagement
                Letter Agreement, dated December 12, 2006, by and between Yanglin and
                Kuhns Brothers, Inc, incorporated by reference to the exhibit of
                10.5 to
                our report on Form 8-k filed with the SEC on October 10,
                2007.10.3
            Mass
                Harmony Financial Consulting Agreement (MHA Agreement), dated November
                2,
                2006 by and between Yanglin and Mass Harmony Asset Management Limited,
                incorporated by reference to the exhibit of 10.6 to our report on
                Form 8-k
                filed with the SEC on October 10, 2007.10.4
            The
                Consignment Agreements, dated as of September 1, 2007, incorporated
                by
                reference to the exhibit of 10.7 to our report on Form 8-k filed
                with the
                SEC on October 10, 2007.10.5
            Exclusive
                Purchase Option Agreement, dated as of September 24, 2007, incorporated
                by
                reference to the exhibit of 10.8 to our report on Form 8-k filed
                with the
                SEC on October 10, 2007.10.6
            Registered
                Trademark Transfer Agreement, dated as of September 24, 2007, incorporated
                by reference to the exhibit of 10.9 to our report on Form 8-k filed
                with
                the SEC on October 10, 2007.10.7
            Trademark
                Licensing Agreement, dated as of September 24, 2007, incorporated
                by
                reference to the exhibit of 10.10 to our report on Form 8-k filed
                with the
                SEC on October 10, 2007.10.8
            Consigned
                Management Agreement, dated as of September 24, 2007, incorporated
                by
                reference to the exhibit of 10.11 to our report on Form 8-k filed
                with the
                SEC on October 10, 2007.10.9
            Loan
                Agreement, dated as of September 24, 2007, incorporated by reference
                to
                the exhibit of 10.12 to our report on Form 8-k filed with the SEC
                on October 10, 2007.








10.10
            Form
                of soybean purchase contract10.11
            Form
                of sales contract for soybean product10.12
            Employment
                Contract-Shulin Liu as of Sept. 24, 200710.13
            Employment
                Contract-Shaocheng Xu as of Sept. 24, 200710.14
            Employment
                Contract-Zongtai Guo as of Sept. 24, 200716.1
            Letter
                from the Company to Hatfield, incorporated by reference to the exhibit
                of
                the same number to our report on Form 8-k filed with the SEC
                on October 10, 2007.16.2
            Letter
                from Hatfield to the SEC, incorporated by reference to the exhibit
                of the
                same number to our report on Form 8-k filed with the SEC on October
                10, 2007.16.3
            Letter
                of Samuel H. Wong & Company, LLP, dated February 26, 2008,
                incorporated by reference to the exhibit of 16.1 to our report on
                Form
                8-k/A filed with the SEC on February 28, 2008.16.4
            Letter
                of Samuel H. Wong & Company, LLP, dated March 17, 2008, incorporated
                by reference to the exhibit of 16.1 to our report on Form 8-k/A filed
                with
                the SEC on March 28, 2008.21.1
            List
                of Subsidiaries incorporated by reference to the exhibit of same
                number to
                our report on Form 8-k filed with the SEC on October 10,
                200731.1*
            Certification
                Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.31.2*
            Certification
                Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1*
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.32.2*
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.*
            Filed
                herewith.