----

----

**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-QSB**

**(Mark      One)**

| **x** | **Quarterly                Report Pursuant to Section 13 or 15(d) of the Securities Exchange                Act of                1934.** |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------|

**For      the quarterly period ended September 30, 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 0-16397**

**BENDA      PHARMACEUTICAL, INC.**

| **Delaware**                                   | **41-2185030**                                      |
|------------------------------------------------|-----------------------------------------------------|
| (State                or other jurisdiction of | (I.R.S.                Employer Identification No.) |
| incorporation                or organization)  |                                                |

| **Room                13, Floor 25, Sunny New World Tower,****No.                231 Xin Hua Road, Jianghan District,****Wuhan,                Hubei, PRC. Post Code: 430015** |                      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------|
| (Address                of principal executive offices)                                                                                                                        | (Zip                Code) |

**+86      (27) 8537-5532**

----

----

----

**BENDA      PHARMACEUTICAL, INC.**

**FINANCIAL      STATEMENTS**

**INDEX**

**PART      I— FINANCIAL INFORMATION**

| Item                1. | Financial                Statements                                              | 3        |
|------------------------|----------------------------------------------------------------------------------|----------|
|                   |                                                                             |     |
| Item                2. | Management’s                Discussion and Analysis of Financial Condition |  23 |
|                   |                                                                             |     |
| Item                3. | Controls                and Procedures                                           |  28 |

**PART      II— OTHER INFORMATION**

| Item                1. | Legal                Proceedings                                   |  29 |
|------------------------|--------------------------------------------------------------------|----------|
|                   |                                                               |     |
| Item                2. | Changes                in Securities                               |  29 |
|                   |                                                               |     |
| Item                3. | Defaults                Upon Senior Securities                     |  29 |
|                   |                                                               |     |
| Item                4. | Submission                of Matters to a Vote of Security Holders |  29 |
|                   |                                                               |     |
| Item                5. | Other                Information                                   |  29 |
|                   |                                                               |     |
| Item                6. | Exhibits                and Reports on Form 8-K                    |  29 |
|                   |                                                               |
| **SIGNATURE**          | 30                                                                 |

----

**Item      1. Financial Information**

----

**Benda      Pharmaceutical, Inc.**

**Consolidated      Balance Sheets (UNAUDITED)**

**(Amounts      expressed in U.S. Dollars) **

----

|                                                                                                                                                                                                                                                          |   | **September                30** |       | **December                31** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------------------------------|--------|
|                                                                                                                                                                                                                                                          |   | **2007**                        |       | **2006**                       |   |
|                                                                                                                                                                                                                                                          |   | (Unaudited)                     |       |                           |   |
| **Assets**                                                                                                                                                                                                                                                    |   |                            |       |                           |   |
| Current                Assets                                                                                                                                                                                                                                 |   |                            |       |                           |   |
| Cash                and cash equivalents                                                                                                                                                                                                                      |   | $                               | 1,351,892  |                           | $      | 1,676,119 |   |
| Trade                receivables, net                                                                                                                                                                                                                         |   |                            | 7,079,790  |                           |   | 6,193,585 |   |
| Other                receivables                                                                                                                                                                                                                              |   |                            | 672,088    |                           |   | 99,733 |   |
| Refundable                purchase price paid (Note 5)                                                                                                                                                                                                        |   |                            | 1,200,000  |                           |   | 5,367,801 |   |
| Inventories                (Note 6)                                                                                                                                                                                                                           |   |                            | 2,205,498  |                           |   | 701,339 |   |
| Prepaid                expenses and deposits (Note 7)                                                                                                                                                                                                         |   |                            | 2,706,937  |                           |   | 372,548 |   |
| Total                current assets                                                                                                                                                                                                                           |   |                            | 15,216,205 |                           |   | 14,411,124 |   |
| Due                from related parties (Note 17)                                                                                                                                                                                                             |   |                            | 2,592,031  |                           |   | 1,976,815 |   |
| Long-term                loan receivable (Note 17)                                                                                                                                                                                                            |   |                            | 133,022    |                           |   | - |   |
| Property                and equipments, net (Note 8)                                                                                                                                                                                                          |   |                            | 25,591,918 |                           |   | 13,673,067 |   |
| Intangible                assets, net (Note 9)                                                                                                                                                                                                                |   |                            | 5,501,321  |                           |   | 1,501,483 |   |
| Goodwill                (Note 10)                                                                                                                                                                                                                             |   |                            | 7,175,913  |                           |   | - |   |
| Restricted                cash (Note 11)                                                                                                                                                                                                                      |   |                            | 1,272,657  |                           |   | - |   |
| Debt                issue costs (Note 21)                                                                                                                                                                                                                     |   |                            | 394,547    |                           |   | - |   |
| Total                Assets                                                                                                                                                                                                                                   |   | $                               | 57,877,614 |                           | $      | 31,562,489 |   |
|                                                                                                                                                                                                                                                          |   |                            |       |                           |   |   |   |
| **Liabilities                & Shareholders' Equity**                                                                                                                                                                                                     |   |                            |       |                           |   |   |   |
| Current                Liabilities                                                                                                                                                                                                                            |   |                            |       |                           |   |   |   |
| Bank                indebtedness (Note 11)                                                                                                                                                                                                                    |   | $                               | 1,218,240  |                           | $      | - |   |
| Bank                loans payable (current portion) (Note 12)                                                                                                                                                                                                 |   |                            | 2,918,768  |                           |   | 256,492 |   |
| Long                term debt payable (current portion) (Note 13)                                                                                                                                                                                             |   |                            | 2,357,986  |                           |   | - |   |
| Accounts                payable and accrued liabilities(Note 14)                                                                                                                                                                                              |   |                            | 5,143,972  |                           |   | 1,823,030 |   |
| Taxes                payable                                                                                                                                                                                                                                  |   |                            | 816,079    |                           |   | 226,931 |   |
| Acquisition                price payable (Note 10)                                                                                                                                                                                                            |   |                            | 1,471,369  |                           |   | - |   |
| Wages                payable                                                                                                                                                                                                                                  |   |                            | 520,043    |                           |   | 145,903 |   |
| Deferred                revenues                                                                                                                                                                                                                              |   |                            | 2,694.00   |                           |   | 1,732 |   |
| Total                current liabilities                                                                                                                                                                                                                      |   |                            | 14,449,151 |                           |   | 2,454,088 |   |
| Long                term debt payable (long term portion) (Note 13)                                                                                                                                                                                           |   |                            | 412,368    |                           |   | - |   |
| Long-term                convertible promissory notes (Note 22)                                                                                                                                                                                               |   |                            | 1,923,611  |                           |   | - |   |
| Due                to related parties (Long-term) (Note 17)                                                                                                                                                                                                   |   |                            | 3,159,468  |                           |   | 3,034,365 |   |
| Total                liabilities                                                                                                                                                                                                                              |   |                            | 19,944,598 |                           |   | 5,488,453 |   |
|                                                                                                                                                                                                                                                          |   |                            |       |                           |   |   |   |
| Minority                interest                                                                                                                                                                                                                              |   |                            | 4,589,000  |                           |   | 2,154,356 |   |
|                                                                                                                                                                                                                                                          |   |                            |       |                           |   |   |   |
| Redeemable                common stock, 2,049,560 shares at $3.6 per share (Note 17)                                                                                                                                                                          |   |                            | 7,378,416  |                           |   | - |   |
|                                                                                                                                                                                                                                                          |   |                            |       |                           |   |   |   |
| Shareholders'                Equity                                                                                                                                                                                                                           |   |                            |       |                           |   |   |   |
| Preferred                stock, $0.001 par value; 5,000,000 shares authorized; None issued                and                outstanding                                                                                                                      |   |                            | -          |                           |   | - |   |
| Common                stock, $0.001 par value; 150,000,000 shares authorized; 97,576,800                shares                issued and outstanding as of 9/30/2007; 96,258,411 shares issued                and                outstanding as of 12/31/2006 |   |                            | 97,576     |                           |   | 96,258 |   |
| Additional                paid in capital (Note 23)                                                                                                                                                                                                           |   |                            | 21,324,277 |                           |   | 13,099,424 |   |
| Retained                earnings (unrestricted)                                                                                                                                                                                                               |   |                            | (134,414   | )                              |   | 7,437,663 |   |
| Statutory                surplus reserve fund (Note 16)                                                                                                                                                                                                       |   |                            | 1,869,523  |                           |   | 1,869,523 |   |
| Accumulative                other comprehensive income                                                                                                                                                                                                        |   |                            | 2,304,638  |                           |   | 1,090,408 |   |
| Shares                issuable for acquisition and services                                                                                                                                                                                                   |   |                            | 504,000    |                           |   | 326,403 |   |
| Total                Shareholders' Equity                                                                                                                                                                                                                     |   |                            | 25,965,600 |                           |   | 23,919,680 |   |
| Total                Liabilities & Shareholders' Equity                                                                                                                                                                                                   |   | $                               | 57,877,614 |                           | $      | 31,562,489 |   |

----

**Benda      Pharmaceutical, Inc.**

**Consolidated      Statements of Operations (UNAUDITED)**

**(Amounts      expressed in U.S. Dollars) **

----

|                                                                     |   | **NINE                MONTHS ENDEDSEPTEMBER 30,** |        | **THREE                MONTHS ENDEDSEPTEMBER 30,** |   |
|--------------------------------------------------------------------------|--------|---------------------------------------------------|-------------|----------------------------------------------------|--------|
|                                                                     |   | **2007**                                          |        | **2006**                                           |   | **2007** |   | **2006** |   |
|                                                                     |   | (Unaudited)                                       |        | (Unaudited)                                        |   | (Unaudited) |   | (Unaudited) |   |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |
| Revenue                                                                  |   | $                                                 | 15,796,295  |                                               | $      | 12,365,423 |   | $ | 7,559,443 |   | $ | 4,726,795 |   |
| Cost                of goods sold                                        |   |                                              | (8,105,852  | )                                                  |   | (6,908,404 | ) |   | (3,812,572 | ) |   | (2,771,233 | ) |
| Gross                profit                                              |   |                                              | 7,690,443   |                                               |   | 5,457,019 |   |   | 3,746,871 |   |   | 1,955,562 |   |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| Selling                expenses                                          |   |                                              | (675,013    | )                                                  |   | (421,646 | ) |   | (330,127 | ) |   | (142,127 | ) |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| General                and administrative expenses                       |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| Amortization                of intangible assets                         |   |                                              | (343,587    | )                                                  |   | (194,027 | ) |   | (140,841 | ) |   | (60,382 | ) |
| Amortization                of debt issue costs                          |   |                                              | (134,653    | )                                                  |   |   |   |   | (67,384 | ) |   | - |   |
| Depreciation                                                             |   |                                              | (337,982    | )                                                  |   | (423,983 | ) |   | 17,249 |   |   | (146,469 | ) |
| Bad                debts                                                 |   |                                              | (502,273    | )                                                  |   | (417,823 | ) |   | 274,586 |   |   | 553,683 |   |
| Director                remuneration                                     |   |                                              | (58,959     | )                                                  |   | - |   |   | (25,014 | ) |   | - |   |
| Penalty                to investors                                      |   |                                              | (540,000    | )                                                  |   | - |   |   | (420,000 | ) |   | - |   |
| Finder                fee                                                |   |                                              | (291,124    | )                                                  |   | - |   |   | (51,161 | ) |   | - |   |
| Cash                bonus                                                |   |                                              | (173,400    | )                                                  |   | - |   |   | 0 |   |   | - |   |
| Consulting                and professional fees (Note 18)                |   |                                              | (8,222,184  | )                                                  |   | - |   |   | (339,768 | ) |   | - |   |
| Other                general and administrative expenses (Note 19)       |   |                                              | (1,751,759  | )                                                  |   | (391,632 | ) |   | (777,620 | ) |   | (115,271 | ) |
| Total                general and administrative expenses                 |   |                                              | (12,355,921 | )                                                  |   | (1,427,465 | ) |   | (1,529,953 | ) |   | 231,561 |   |
| Research                and development expenses                         |   |                                              | (310,084    | )                                                  |   | (33,138 | ) |   | (212,965 | ) |   | (26,907 | ) |
| Total                operating expenses                                  |   |                                              | (13,341,018 | )                                                  |   | (1,882,249 | ) |   | (2,073,045 | ) |   | 62,527 |   |
| Operating                income / (loss)                                 |   |                                              | (5,650,575  | )                                                  |   | 3,574,770 |   |   | 1,673,826 |   |   | 2,018,089 |   |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| Interest                expense                                          |   |                                              | (2,207,878  | )                                                  |   | (118,674 | ) |   | (1,141,472 | ) |   | (39,437 | ) |
| Other                income (expenses)                                   |   |                                              | 104,966     |                                               |   | (249,643 | ) |   | 14,808 |   |   | (3,253 | ) |
| Government                subsidies / grants (Note 20)                   |   |                                              | 1,690,974   |                                               |   | - |   |   | 1,417,859 |   |   | - |   |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| Income                / (loss) before minority interest and income taxes |   |                                              | (6,062,513  | )                                                  |   | 3,206,453 |   |   | 1,965,021 |   |   | 1,975,399 |   |
| Income                taxes (Note 21)                                    |   |                                              | -           |                                               |   | - |   |   | - |   |   | - |   |
| Minority                interest                                         |   |                                              | (1,509,564  | )                                                  |   | (221,703 | ) |   | (1,055,229 | ) |   | (144,095 | ) |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| Net                income / (loss)                                       |   | $                                                 | (7,572,077  | )                                                  | $      | 2,984,750 |   | $ | 909,792 |   | $ | 1,831,304 |   |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| Earnings                / (loss) per share - basic                       |   | $                                                 | (0.08       | )                                                  | $      | 0.04 |   | $ | 0.01 |   | $ | 0.03 |   |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding - basic               |   |                                              | 96,872,524  |                                               |   | 70,259,331 |   |   | 97,359,178 |   |   | 70,296,573 |   |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| Earnings                / (loss) per share - diluted                     |   | $                                                 | (0.06       | )                                                  | $      | 0.04 |   | $ | 0.01 |   | $ | 0.03 |   |
|                                                                     |   |                                              |        |                                               |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding - diluted             |   |                                              | 125,103,425 |                                               |   | 70,259,331 |   |   | 131,377,347 |   |   | 70,296,573 |   |

----

**Benda      Pharmaceutical, Inc.**

**Consolidated      Statements of Cash Flows (UNAUDITED)**

**(Amounts      expressed in U.S. Dollars) **

----

|                                                                                                                         |   | **NINE MONTHS ENDED SEPTEMBER 30,** |        |
|------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|-------------|
|                                                                                                                         |   | **2007**                                                |        | **2006** |   |
|                                                                                                                         |   | (Unaudited)                                             |        | (Unaudited) |   |
| **Cash                  Flows From Operating Activities**                                                                    |   |                                                    |        |   |   |
| Net                  income / (loss)                                                                                         |   | $                                                       | (7,572,077  | ) | $ | 2,984,750 |   |
| Adjustments                  to reconcile net income / (loss) to net cash provided by operating                  activities: |   |                                                    |        |   |   |   |   |
| Redeemable                  common stock issuable for services (Note 16)                                                     |   |                                                    | 8,222,184   |   |   | - |   |
| Bad                  Debt provision                                                                                          |   |                                                    | 502,273     |   |   | 417,823.00 |   |
| Minority                  interest                                                                                           |   |                                                    | 1,509,564   |   |   | 221,703.00 |   |
| Loss                  on disposals of fixed assets                                                                           |   |                                                    | 8,398       |   |   | 248,209.00 |   |
| Depreciation                                                                                                                 |   |                                                    | 337,982     |   |   | 423,983.00 |   |
| Amortization                  of intangible assets                                                                           |   |                                                    | 343,587     |   |   | 194,027.00 |   |
| Amortization                  of debt issue costs (Note 20)                                                                  |   |                                                    | 134,653     |   |   | - |   |
| Interest                  expense (amortization of debt discount) (Note 20)                                                  |   |                                                    | 1,923,611   |   |   | - |   |
| Changes                  in operating assets and liabilities:                                                                |   |                                                    |        |   |   | - |   |
| Trade                  receivables                                                                                           |   |                                                    | (1,387,515  | ) |   | (2,149,051 | ) |
| Other                  receivables                                                                                           |   |                                                    | (572,355    | ) |   | (4,883 | ) |
| Prepaid                  expenses and deposits                                                                               |   |                                                    | (2,334,389  | ) |   | (136,500 | ) |
| Inventories                                                                                                                  |   |                                                    | (1,504,159  | ) |   | (708,311 | ) |
| Accounts                  payable and accrued liabilities                                                                    |   |                                                    | 3,695,082   |   |   | 85,362 |   |
| Others                  payable                                                                                              |   |                                                    | -           |   |   | - |   |
| Taxes                  payable                                                                                               |   |                                                    | 589,148     |   |   | (60,257 | ) |
| **Net                  cash provided by operating activities**                                                               |   |                                                    | 3,895,987   |   |   | 1,516,855 |   |
|                                                                                                                         |   |                                                    |        |   |   |   |   |
| **Cash                  Flows From Investing Activities**                                                                    |   |                                                    |        |   |   |   |   |
| Acquisition                  cost paid                                                                                       |   |                                                    | (1,615,389  | ) |   | - |   |
| Purchases                  of property and equipment                                                                         |   |                                                    | (5,888,575  | ) |   | (882,402 | ) |
| Purchases                  of intangible assets                                                                              |   |                                                    | (2,406,227  | ) |   | (708,554 | ) |
| Loans                  to related parties, net                                                                               |   |                                                    | (748,238    | ) |   | 123,946 |   |
| **Net                  cash used in investing activities**                                                                   |   |                                                    | (10,658,429 | ) |   | (1,467,010 | ) |
|                                                                                                                         |   |                                                    |        |   |   |   |   |
| **Cash                  Flows From Financing Actives**                                                                       |   |                                                    |        |   |   |   |   |
| Proceeds                  from issuance of convertible promissory note (Note 20)                                             |   |                                                    | 7,030,800   |   |   | - |   |
| Proceeds                  and repayments of borrowings under related parties, net                                            |   |                                                    | 125,103     |   |   | 354,518 |   |
| Proceeds                  and repayments of borrowings under government debts payable,                  net                  |   |                                                    | (66,511     | ) |   | - |   |
| Proceeds                  and repayments of borrowings under bank loans, net                                                 |   |                                                    | (651,177    | ) |   | (58,280 | ) |
| **Net                  cash provided by (used in) financing activities**                                                     |   |                                                    | 6,438,215   |   |   | 296,238 |   |
| Effect                  of exchange rate changes on cash                                                                     |   |                                                    | -           |   |   | 0 |   |
| **Net                  increase in cash and cash equivalents**                                                               |   |                                                    | (324,227    | ) |   | 346,083 |   |
|                                                                                                                         |   |                                                    |        |   |   |   |   |
| **Cash                  and cash equivalents, beginning of period**                                                          |   |                                                    | 1,676,119   |   |   | 308,082 |   |
|                                                                                                                         |   |                                                    |        |   |   |   |   |
| **Cash                  and cash equivalents, end of period**                                                                |   | **$**                                                   | 1,351,892   |   | **$** | 654,165 |   |
|                                                                                                                         |   |                                                    |        |   |   |   |   |
| **Supplemental                  Disclosure of Cash Flow Information**                                                        |   |                                                    |        |   |   |   |   |
| **Cash                  paid for interest**                                                                                  |   | **$**                                                   | 246,730     |   | **$** | 113,366 |   |
| **Cash                  paid for income taxes**                                                                              |   | **$**                                                   | -           |   | **$** | - |   |

----

**Notes      to Consolidated Financial Statements**

**(Amounts      expressed in U.S. Dollars) **

----

| **1.** | **Organization** |
|--------|------------------|

| **2.** | **Basis                of Preparation** |
|--------|-----------------------------------------|

| **3.** | **Use                of Estimates** |
|--------|-------------------------------------|

| **4.** | **Significant                Accounting Policies** |
|--------|----------------------------------------------------|

**Cash      and Cash Equivalents**

**Accounts      Receivable**

----

**Inventories**

**Property      and Equipment**

| Buildings                                       | 20-30years                 |
|-------------------------------------------------|----------------------------|
| Machinery                and equipment          | 10-15                years |
| Motor                Vehicles                   | 5                years     |
| Electronics                and office equipment | 5                years     |

**Impairment      of Long-Lived Assets**

*Accounting      for the Impairment or Disposal of Long-Lived Assets*

**Intangible      Assets**

**Revenue      Recognition**

**Research      and Development**

----

**Income      Taxes**

*Accounting      for Income Taxes*

**Comprehensive      Income**

*Reporting      Comprehensive Income,*

**Concentration      of Credit Risk **

|                                                                       |   | NINE MONTHS ENDED SEPTEMBER                  30, |       | THREE MONTHS ENDED SEPTEMBER                  30, |   |
|----------------------------------------------------------------------------|--------|-----------------------------------------------------------------|------------|------------------------------------------------------------------|--------|
|                                                                       |   | 2007                                                            |       | 2006                                                             |   | 2007 |   | 2006 |   |
|                                                                       |   | (Unaudited)                                                     |       | (Unaudited)                                                      |   | (Unaudited) |   | (Unaudited) |   |
| Revenue                                                                    |   | $                                                               | 15,796,295 |                                                             |   | % |   | $ | 12,365,423 |   |   | % |   | $ | 7,559,443 |   |   | % |   | $ | 4,726,795 |   |   | % |   |
|                                                                       |   |                                                            |       |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Individual                  customer's revenue*                           |   |                                                            |       |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Zhuhai                  Gongbei Pharmaceutical Co, Ltd.                    |   |                                                            | 2,926,070  |                                                             |   | 19 | % |   | 1,919,106 |   |   | 16 | % |   | 1,071,841 |   |   | 14 | % |   | 369,653 |   |   | 8 | % |
| Jiangxi                  Huiren Pharmaceutical Co. Ltd.                    |   |                                                            | 1,831,311  |                                                             |   | 12 | % |   | 1,759,774 |   |   | 14 | % |   | 476,851 |   |   | 6 | % |   | 590,273 |   |   | 12 | % |
| Shenzhen                  Huihua Pharmaceutical Co. Ltd.                   |   |                                                            | 1,983,733  |                                                             |   | 13 | % |   | 1,840,557 |   |   | 15 | % |   | 752,449 |   |   | 10 | % |   | 707,565 |   |   | 15 | % |
| Shenyang                  Pharmaceutical Co. Ltd.                          |   |                                                            | 1,758,171  |                                                             |   | 11 | % |   | 1,633,459 |   |   | 13 | % |   | 629,027 |   |   | 8 | % |   | 670,733 |   |   | 14 | % |
| Guangdong                  Shaoqing Xinghu Technology Development Co. Ltd. |   |                                                            | 110,460    |                                                             |   | 1 | % |   | 1,035,539 |   |   | 8 | % |   | 484 |   |   | 0 | % |   | 301,538 |   |   | 6 | % |
| Shenzhen                  Sailede Bio-Tech. Development Co. Ltd.           |   |                                                            | 95,828     |                                                             |   | 1 | % |   | 901,898 |   |   | 7 | % |   | 420 |   |   | 0 | % |   | 248,441 |   |   | 5 | % |
| Hubei                  Jiuzhoutong Pharmaceutical Co. Ltd                  |   |                                                            | 1,174,584  |                                                             |   | 7 | % |   | - |   |   | 0 | % |   | 893,623 |   |   | 12 | % |   | - |   |   | 0 | % |
| Auhui                  Huayuen Pharmaceutical Co. Ltd.                     |   |                                                            | 1,136,774  |                                                             |   | 7 | % |   | 413,078 |   |   | 3 | % |   | 956,129 |   |   | 13 | % |   | 413,078 |   |   | 9 | % |
|                                                                       |   |                                                            |       |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Account                  receivable, gross                                 |   | $                                                               | 7,079,790  | %                                                                |   |   | %  | $ | 5,658,475 |   |   |   | %  | $ | 7,079,790 |   |   |   | %  | $ | 5,658,475 |   |   |   | % |
|                                                                       |   |                                                            |       |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Individual                  customer's account receivable gross balance*  |   |                                                            |       |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Zhuhai                  Gongbei Pharmaceutical Co, Ltd.                    |   |                                                            | 762,854    |                                                             |   | 11 | % |   | 300,208 |   |   | 5 | % |   | 762,854 |   |   | 11 | % |   | 300,208 |   |   | 5 | % |
| Jiangxi                  Huiren Pharmaceutical Co. Ltd.                    |   |                                                            | 675,836    |                                                             |   | 10 | % |   | 679,804 |   |   | 12 | % |   | 675,836 |   |   | 10 | % |   | 679,804 |   |   | 12 | % |
| Shenzhen                  Huihua Pharmaceutical Co. Ltd.                   |   |                                                            | 1,084,825  |                                                             |   | 15 | % |   | 759,029 |   |   | 13 | % |   | 1,084,825 |   |   | 15 | % |   | 759,029 |   |   | 13 | % |
| Shenyang                  Pharmaceutical Co. Ltd.                          |   |                                                            | 856,113    |                                                             |   | 12 | % |   | 693,146 |   |   | 12 | % |   | 856,113 |   |   | 12 | % |   | 693,146 |   |   | 12 | % |
| Guangdong                  Shaoqing Xinghu Technology Development Co. Ltd. |   |                                                            | 276,674    |                                                             |   | 4 | % |   | 637,216 |   |   | 11 | % |   | 276,674 |   |   | 4 | % |   | 637,216 |   |   | 11 | % |
| Shenzhen                  Sailede Bio-Tech. Development Co. Ltd.           |   |                                                            | 212,818    |                                                             |   | 3 | % |   | 297,131 |   |   | 5 | % |   | 212,818 |   |   | 3 | % |   | 297,131 |   |   | 5 | % |
| Hubei                  Jiuzhoutong Pharmaceutical Co. Ltd                  |   |                                                            | 158,642    |                                                             |   | 2 | % |   | 117,430 |   |   | 2 | % |   | 158,642 |   |   | 2 | % |   | 117,430 |   |   | 2 | % |
| Auhui                  Huayuen Pharmaceutical Co. Ltd.                     |   |                                                            | 488,795    |                                                             |   | 7 | % |   | 519,138 |   |   | 9 | % |   | 488,795 |   |   | 7 | % |   | 519,138 |   |   | 9 | % |

**Basic      and Diluted Earnings Per Share**

----

**Foreign      Currency Translation**

|                          |   | September 30, |   | September 30, |   |
|-------------------------------|--------|--------------------|--------|--------------------|--------|
|                          |   | 2007               |   | 2006               |   |
| Fixed                  rate   |   | $                  | 0.1330 |               | $      | 0.1266 |   |
| Average                  rate |   | $                  | 0.1303 |               | $      | 0.1250 |   |

**Fair      Value of Financial Instruments**

**Recent      Accounting Pronouncements**

**Recently      Adopted Accounting Pronouncements**

*Share-Based      Payment, an Amendment of SFAS No. 123*

----

**Interim      Financial Information**

| **5.** | **Refundable****Purchase                Price Paid** |
|--------|------------------------------------------------------|

| **6.** | **Inventories** |
|--------|-----------------|

|                                                |   | September 30, 2007 |                     | December 31, 2006 |   |
|-----------------------------------------------------|--------|------------------------------|--------------------------|-----------------------------|--------|
|                                                |   | (Unaudited)                  |                     |                        |   |
| Raw                  materials                      |   | $                            | 1,010,338                |                        | $      | 311,064 |   |
| Packing                  materials                  |   |                         | 200,697                  |                        |   | 80,639 |   |
| Other                  materials / supplies         |   |                         | 89,914                   |                        |   | - |   |
| Finished                  goods                     |   |                         | 535,789                  |                        |   | 309,637 |   |
| Work-in-progress                                    |   |                         | 4,479,169                |                        |   | - |   |
| Total                  inventories at cost          |   |                         | 6,315,907                |                        |   | 701,339 |   |
|                                                |   |                         |                     |                        |   |   |   |
| Less:                  Reserves on work-in-progress |   |                         | (4,110,409               | )                           |   | - |   |
|                                                |   |                         |      |                        |   |      |   |
| Total                  inventories, net             |   | $                            | 2,205,498                |                        | $      | 701,339 |   |

----

| **7.** | **Prepaid              expenses and deposits** |
|--------|------------------------------------------------|

|   | a) | Ebei                put deposit of Rmb11,185,267 or $1,487,886 in Everbright Bank to                issue                commercial bank notes. Such deposit will be discharged when corresponding                commercial bank notes are cleared. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Jianglin                  Benda put deposit of Rmb2,253,938 or $299,823 in Everbright Bank                  to issue                  commercial bank notes. Such deposit will be discharged when corresponding                  commercial bank notes are cleared. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8.** | **Property                and Equipment****s** |
|--------|------------------------------------------------|

|                                               |   | September 30, 2007 |       | December 31, 2006 |   |
|----------------------------------------------------|--------|------------------------------|------------|-----------------------------|--------|
|                                               |   | (Unaudited)                  |       |                        |   |
| Buildings                                          |   | $                            | 3,545,639  |                        | $      | 2,227,710 |   |
| Machinery                  and equipment           |   |                         | 11,476,432 |                        |   | 3,941,187 |   |
| Office                  equipment                  |   |                         | 107,677    |                        |   | 10,672 |   |
| Motor                  Vehicles                    |   |                         | 187,801    |                        |   | 32,971 |   |
| Cost                                               |   |                         | 15,317,548 |                        |   | 6,212,540 |   |
|                                               |   |                         |       |                        |   |   |   |
| Less:                  Accumulated Depreciation    |   |                         |       |                        |   |   |   |
|                                               |   |                         |       |                        |   |   |   |
| Buildings                                          |   | $                            | (1,085,309 | )                           | $      | (875,351 | ) |
| Machinery                  and equipment           |   |                         | (3,475,599 | )                           |   | (1,837,221 | ) |
| Office                  equipment                  |   |                         | (118,674   | )                           |   | (4,558 | ) |
| Motor                  Vehicles                    |   |                         | (173,264   | )                           |   | (7,129 | ) |
| Accumulated                  Depreciation          |   |                         | (4,852,846 | )                           |   | (2,724,260 | ) |
|                                               |   |                         |       |                        |   |   |   |
| Construction                  in progress          |   | $                            | 15,127,216 |                        | $      | 10,184,787 |   |
|                                               |   |                         |       |                        |   |   |   |
| Total                  property and equipment, net |   | $                            | 25,591,918 |                        | $      | 13,673,067 |   |

----

| **9.** | **Intangible                Assets** |
|--------|--------------------------------------|

|                                            |   | September 30, 2007 |       | December 31, 2006 |   |
|-------------------------------------------------|--------|------------------------------|------------|-----------------------------|--------|
|                                            |   | (Unaudited)                  |       |                        |   |
| Land-use                  rights                |   | $                            | 2,313,125  |                        | $      | 1,068,036 |   |
| Drugs                  permits and licenses     |   |                         | 2,309,805  |                        |   | 1,055,893 |   |
| Technology                  formulas            |   |                         | 971,060    |                        |   | 679,700 |   |
| Patent                                          |   |                         | 2,652,656  |                        |   | - |   |
| Cost                                            |   |                         | 8,246,646  |                        |   | 2,803,630 |   |
|                                            |   |                         |       |                        |   |   |   |
| Less:                  Accumulated amortization |   |                         |       |                        |   |   |   |
| Land-use                  rights                |   |                         | (219,790   | )                           |   | (150,465 | ) |
| Drugs                  permits and licenses     |   |                         | (1,250,068 | )                           |   | (1,085,471 | ) |
| Technology                  formulas            |   |                         | (125,983   | )                           |   | (66,210 | ) |
| Patent                                          |   |                         | (1,149,484 | )                           |   | 0 |   |
| Accumulated                  amortization       |   |                         | (2,745,325 | )                           |   | (1,302,146 | ) |
|                                            |   |                         |       |                        |   |   |   |
| Total                  intangible assets, net   |   | $                            | 5,501,321  |                        | $      | 1,501,483 |   |

|   | a) | Due                to the acquisition of SiBiono, two items were included: (1) patent,                the                innovation and research results of Genedicine, with cost $2,652,656;                (2)                land use right with a total area 20,574 square meters, with cost                $351,802 |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Benda                Ebei purchased a land use right with total purchase cost Rmb6 million                or                approximately $0.8 million. During the nine months ended as of September                30, 2007, an amount Rmb6 million or approximately $0.8 million was                paid. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | Benda                Ebei purchased a license for a new drug, which is a kind of anti-virus                product in nature with total purchase cost Rmb9 million or approximately                $1.20 million. During the nine months ended as of September 30, 2007,                an                amount Rmb9 million or approximately $1.20 million was paid. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | In                May 2007, SiBiono enter into a co-operation agreement with DNAVEC,                a                Japanese gene therapy research institute, Under the terms of the                agreement, DNAVEC will leverage SiBiono’s proven gene therapy                manufacturing platform and will transfer the exclusive development                and                distribution rights of SeV-Gag in China to SiBiono. The total purchase                cost Rmb2 million or approximately $0.27 million was paid during                the nine                months ended September 30, 2007 for obtaining such exclusive right. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **10.** | **Goodwill                and Acquisition Cost                Payable** |
|---------|-------------------------------------------------------------------------|

| **11.** | **Restricted                Cash and Bank Indebtedness** |
|---------|----------------------------------------------------------|

| **12.** | **Bank                Loans Payable** |
|---------|---------------------------------------|

|                                            |   | September 30, 2007 |      | December 31, 2006 |   |
|-------------------------------------------------|--------|------------------------------|-----------|-----------------------------|--------|
|                                            |   | (Unaudited)                  |      |                        |   |
| Bank                  loans due within one year |   | $                            | 2,918,768 |                        | $      | 256,492 |   |
| Bank                  loans due after one year  |   |                         | -         |                        |   | - |   |
| Total                  debt                     |   | $                            | 2,918,768 |                        | $      | 256,492 |   |

----

| **13.** | **Long                Term Debt Payable** |
|---------|-------------------------------------------|

|                                                        |   | September 30, 2007 |      | December 31, 2006 |   |
|-------------------------------------------------------------|--------|------------------------------|-----------|-----------------------------|--------|
|                                                        |   | (Unaudited)                  |      |                        |   |
| Long-term                  debt payable due within one year |   | $                            | 2,357,986 |                        | $      | - |   |
| Long-term                  debt payable due after one year  |   |                         | 412,368   |                        |   | - |   |
| Total                  debt                                 |   | $                            | 2,770,354 |                        | $      | - |   |

| **14.** | **Accounts                Payable and Accrued                Liabilities** |
|---------|----------------------------------------------------------------------------|

| **15.** | **Welfare                and Employment Liabilities** |
|---------|-------------------------------------------------------|

| **16.** | **Statutory                Reserves** |
|---------|---------------------------------------|

| **17.** | **Related                Party Transactions****and Long Term Loan                Receivable** |
|---------|-----------------------------------------------------------------------------------------------|

----

|                                                                 |   | September 30, 2007 |      | December 31,2006 |   |
|----------------------------------------------------------------------|--------|------------------------------|-----------|-----------------------|--------|
|                                                                 |   | (Unaudited)                  |      |                  |   |
| Yiqing,                  Wan                                         |   |                         |      |                  |   |   |   |
| Due                  to Ever Leader Holdings Co. Ltd.                |   | $                            | 529,710   |                  | $      | 455,275 |   |
| Hubei                  Benda Science and Technology Co. Ltd          |   |                         |      |                  |   |   |   |
| Due                  to Yidu Benda Chemicals Co. Ltd.                |   |                         | 1,457,467 |                  |   | 1,299,479 |   |
| Due                  to Ever Leader Holdings Co. Ltd.                |   |                         | 569,405   |                  |   | 210,518 |   |
| Xiaozhi                  Zhang                                       |   |                         |      |                  |   |   |   |
| Due                  to Shenzhen SiBiono Gene Tech Co. Ltd.          |   |                         | 4,932     |                  |   | - |   |
| Pong                  Tsaiohuei                                      |   |                         |      |                  |   |   |   |
| Due                  to Shenzhen SiBiono Gene Tech Co. Ltd.          |   |                         | 1,839     |                  |   | - |   |
| Eric                  Yu                                             |   |                         |      |                  |   |   |   |
| Due                  to Benda Pharmaceutical Inc.                    |   |                         | 231       |                  |   | - |   |
| Feng                  Wang                                           |   |                         |      |                  |   |   |   |
| Due                  to Beijing Shusai Pharyngitis Research Co. Ltd. |   |                         | 28,447    |                  |   | 11,543 |   |
| Total                  due from related parties                      |   | $                            | 2,592,031 |                  | $      | 1,976,815 |   |

|                                                                     |   | September 30, 2007 |      | December 31,2006 |   |
|--------------------------------------------------------------------------|--------|------------------------------|-----------|-----------------------|--------|
|                                                                     |   | (Unaudited)                  |      |                  |   |
| Hubei                  Benda Science and Technology Co. Ltd              |   |                         |      |                  |   |   |   |
| Due                  from Hubei Tongji Benda Ebei Phamacetucial Co. Ltd. |   | $                            | 144,085   |                  | $      | 236,205 |   |
| Due                  from Jiangliang Benda Pharamaceutical Co. Ltd.      |   |                         | 1,818,402 |                  |   | 1,833,358 |   |
| Due                  from Beijing Shusai Pharyngitis Research Co. Ltd.   |   |                         | 3,025     |                  |   | - |   |
| Wei                  Xu                                                  |   |                         |      |                  |   |   |   |
| Due                  from Hubei Tongji Benda Ebei Phamacetucial Co. Ltd. |   |                         | 931,153   |                  |   | 943,865 |   |
| Due                  from Beijing Shusai Pharyngitis Research Co. Ltd.   |   |                         | 59,779    |                  |   | 20,937 |   |
| Yiqing,                  Wan                                             |   |                         |      |                  |   |   |   |
| Due                  from Hubei Tongji Benda Ebei Phamacetucial Co. Ltd. |   |                         | 128,600   |                  |   | - |   |
| Due                  from Shenzhen SiBiono Gene Tech Co. Ltd.            |   |                         | 74,424    |                  |   | - |   |
|                                                                     |   |                         |      |                  |   |   |   |
|                                                                     |   | $                            | 3,159,468 |                  | $      | 3,034,365 |   |

| **18.** | **Redeemable                  Common Stock Issuable For                  Services** |
|---------|-------------------------------------------------------------------------------------|

----

| **19.** | **Other                general and administrative** |
|---------|-----------------------------------------------------|

|   | a) | $265,608                was incurred for the audit services                fee; |
|--------|----|---------------------------------------------------------------------------------|

|   | b) | $48,818                was incurred for advertisement                expense; |
|--------|----|-------------------------------------------------------------------------------|

|   | c) | $20,226                was incurred for postage, courier and printing expenses; |
|--------|----|---------------------------------------------------------------------------------|

|   | d) | $148,979                was incurred for legal fee; |
|--------|----|-----------------------------------------------------|

|   | e) | $258,047                was incurred for office expenses; |
|--------|----|-----------------------------------------------------------|

|   | f) | $173,400                was incurred for cash bonus; |
|--------|----|------------------------------------------------------|

|   | g) | $482,316                was incurred for salary and wages; |
|--------|----|------------------------------------------------------------|

|   | h) | $32,479                was incurred for conference                expenses; |
|--------|----|-----------------------------------------------------------------------------|

|   | i) | $47,054                was incurred for consultation services                fee; |
|--------|----|-----------------------------------------------------------------------------------|

|   | j) | $43,510                was incurred for rental and utilities; |
|--------|----|---------------------------------------------------------------|

|   | k) | $92,641                was incurred for filing, investor relationship activities                expenses; |
|--------|----|-----------------------------------------------------------------------------------------------------------|

|   | l) | $205,159                was incurred for travel and transportation expenses. |
|--------|----|------------------------------------------------------------------------------|

|   | a) | $64,191                was incurred for audit services                fee; |
|--------|----|----------------------------------------------------------------------------|

|   | b) | $60,982                was incurred for office expenses; |
|--------|----|----------------------------------------------------------|

|   | c) | $132,889                was incurred for salary and wages; |
|--------|----|------------------------------------------------------------|

|   | d) | $9,623                was incurred for rental and                utilities; |
|--------|----|-----------------------------------------------------------------------------|

|   | e) | $44,138                was incurred for travel and transportation                expenses. |
|--------|----|--------------------------------------------------------------------------------------------|

----

| **20.** | **Government                Subsidies / Grants** |
|---------|--------------------------------------------------|

| **21.** | **Income                Taxes** |
|---------|---------------------------------|

----

| **22.** | **Long                Term Convertible Promissory                Note** |
|---------|-------------------------------------------------------------------------|

----

| **23.** | **Common                Stock, Preferred Stock, Additional Paid-in Capital, Warrants and                Options** |
|---------|-------------------------------------------------------------------------------------------------------------------|

|   | (a) | None                shares of Preferred Stock issued and                outstanding; |
|--------|-----|--------------------------------------------------------------------------------------|
|   | (b)  | 96,258,411              shares of Common Stock issued and outstanding, par value $0.001              each;  |
|--------|-----------|------------------------------------------------------------------------------------------------------------------|
|   | (c)  | The              balance of additional paid-in capital was              $13,099,424;  |
|--------|-----------|--------------------------------------------------------------------------------------------|
|   | (d) | 706,195              shares of Common Stock to be issuable for services rendered related              to the              Exchange Transaction and those services rendered by the various              consultants were valued at the private placement offering price of              the              Company Common Stock on November 15, 2006 at $0.4622 per share or total              $326,403; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (e) | 28,557,936              Warrants, each convertible into one (1) share of the Company’s Common              Stock, issued and outstanding, and; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (f) | None              Options issued and outstanding. |
|--------|-----|---------------------------------------------------|

----

|  | (a) | None                shares of Preferred Stock issued and                outstanding; |
|--|-----|--------------------------------------------------------------------------------------|

|  | (b) | 97,576,800                shares of Common Stock issued and outstanding, par value $0.001 each; |
|--|-----|-------------------------------------------------------------------------------------------------|

|  | (c) | The                balance of additional paid-in capital was $21,324,277 whereas                $7,560,000 was received from the issuance of convertible promissory                note,                see Note 22 for details; $325,697 was recorded as additional paid-in                capital for the issuance of 706,195 shares to various consultants;                $339,156 was recorded as additional paid-in capital for the exercise                of                612,194 warrants at $0.555 per share during the three months ended                September 30, 2007; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | 27,945,742                Warrants, each convertible into one (1) share of the Company’s Common                Stock, issued and outstanding, and; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | None                Options issued and outstanding. |
|--|-----|-----------------------------------------------------|

**24.          **
**Commitments          and Contingencies**

|                                                |   | September                  30, |   | Decemebr                  31, |   |
|-----------------------------------------------------|--------|--------------------------------|--------|-------------------------------|--------|
|                                                |   | 2007                           |   | 2006                          |   |
|                                                |   | (Unaudited)                    |   |                          |   |
| Operating                  Lease                    |   |                           |   |                          |   |   |   |
| Rental                  and Property Management Fee |   |                           |   |                          |   |   |   |
| Within                  one year                    |   | $                              | 27,364 |                          | $      | - |   |
| One                  to two year                    |   |                           | 20,891 |                          |   | - |   |
| Total                  commitments payable          |   | $                              | 48,254 |                          | $      | - |   |

**25.          **
**Segment          Information**

----

|                                                    |   | NINE MONTHS ENDED SEPTEMBER 30,       |                                                 | THREE MONTHS ENDED SEPTEMBER 30, |   |
|---------------------------------------------------------|--------|-----------------------------------------------------------|------------------------------------------------------|------------------------------------------------------|--------|
|                                                    |   | 2007                                                      |                                                 | 2006                                                 |   | 2007 |   | 2006 |   |
|                                                    |   | (Unaudited)                                               |                                                 | (Unaudited)                                          |   | (Unaudited) |   | (Unaudited) |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |
|                                                    |   | Benda                Ebei                                 |                                                 | Benda                Ebei                            |   |
|                                                    |   |                                                      | 2007                                                 |                                                 |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|  *Products              produced*                  |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| *Conventional                medicines/injection vials* |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Revenue                from external customers          |   | $                                                         | 11,780,412                                           |                                                 | $      | 7,634,663 |   | $ | 5,749,690 |   | $ | 2,773,289 |   |
| Intersegement                revenue                    |   |                                                      | -                                                    |                                                 |   | - |   |   | - |   |   | - |   |
| Segment                profit (loss)                    |   |                                                      | 3,153,071                                            |                                                 | $      | 2,072,858 |   |   | 1,971,405 |   |   | 1,029,508 |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Total                assets, segment                    |   | $                                                         | 26,546,870                                           |                                                 | $      | 10,324,496 |   | $ | 26,546,870 |   | $ | 10,324,496 |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
|                                                    |   | Jiangling Benda                                 | Jiangling Benda                                 |
|                                                    |   |                                                      | 2007                                                 |                                                 |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|  *Products              produced*                  |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| *Active                pharmaceutical ingredients*      |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Revenue                from external customers          |   | $                                                         | -                                                    |                                                 | $      | 15,491 |   | $ | - |   | $ | 45 |   |
| Intersegement                revenue                    |   |                                                      | -                                                    |                                                 |   | - |   |   | - |   |   | - |   |
| Segment                profit (loss)                    |   |                                                      | (61,786                                              | )                                                    | $      | (168,666 | ) |   | (40,175 | ) |   | 139,620 |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Total                assets, segment                    |   | $                                                         | 7,678,034                                            |                                                 | $      | 3,908,879 |   | $ | 7,678,034 |   | $ | 3,908,879 |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
|                                                    |   | Yidu Benda                                      | Yidu Benda                                      |
|                                                    |   |                                                      | 2007                                                 |                                                 |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|  *Products              produced*                  |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| *Bulk                chemicals*                         |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Revenue                from external customers          |   | $                                                         | 701,590                                              |                                                 | $      | 4,696,623 |   | $ | 3,071 |   | $ | 1,934,815 |   |
| Intersegement                revenue                    |   |                                                      | -                                                    |                                                 |   | - |   |   | - |   |   | - |   |
| Segment                profit (loss)                    |   |                                                      | (542,093                                             | )                                                    | $      | 1,819,388 |   |   | (66,857 | ) |   | 891,617 |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Total                assets, segment                    |   | $                                                         | 6,943,868                                            |                                                 | $      | 8,111,711 |   | $ | 6,943,868 |   | $ | 8,111,711 |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
|                                                    |   | Beijing Shusai                                  | Beijing Shusai                                  |
|                                                    |   |                                                      | 2007                                                 |                                                 |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|  *Products              produced*                  |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| *Pharynigitis                killer therapy*            |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Revenue                from external customers          |   | $                                                         | 35,791                                               |                                                 | $      | 18,646.00 |   | $ | 12,738 |   | $ | 18,646.00 |   |
| Intersegement                revenue                    |   |                                                      | -                                                    |                                                 |   | - |   |   | - |   |   | - |   |
| Segment                profit (loss)                    |   |                                                      | (85,392                                              | )                                                    | $      | (41,480 | ) |   | (33,128 | ) |   | (17,445 | ) |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Total                assets, segment                    |   | $                                                         | 115,588                                              |                                                 | $      | 134,406.18 |   | $ | 115,588 |   | $ | 134,406 |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
|                                                    |   | SiBiono                                              | SiBiono                                              |
|                                                    |   |                                                      | 2007                                                 |                                                 |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|  *Products              produced:*                 |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| *Genedicin                (Ad-p53)*                     |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Revenue                from external customers          |   | $                                                         | 3,278,502                                            |                                                 | $      | - |   | $ | 1,793,944 |   | $ | - |   |
| Intersegement                revenue                    |   |                                                      | -                                                    |                                                 |   | - |   |   | - |   |   | - |   |
| Segment                profit (loss)                    |   |                                                      | 1,635,415                                            |                                                 | $      | - |   |   | 952,036 |   |   | - |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Total                assets, segment                    |   | $                                                         | 12,449,840                                           |                                                 | $      | - |   | $ | 12,449,840 |   | $ | - |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
|                                                    |   | TOTAL                                                | TOTAL                                                |
|                                                    |   | NINE MONTHS ENDED September 30,  | THREE MONTHS ENDED September 30, |
|                                                    |   |                                                      | 2007                                                 |                                                 |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                    |   |                                                      | (Unaudited)                                     |                                                 |   | (Unaudited) |   |   | (Unaudited) |   |   | (Unaudited) |   |
| Revenue                from external customers          |   | $                                                         | 15,796,295                                           |                                                 | $      | 12,365,423 |   | $ | 7,559,443 |   | $ | 4,726,795 |   |
| Intersegement                revenue                    |   |                                                      | -                                                    |                                                 |   | - |   |   | - |   |   | - |   |
| Segment                profit (loss)                    |   |                                                      | 4,099,215                                            |                                                 | $      | 3,682,100 |   |   | 2,783,281 |   |   | 2,043,300 |   |
|                                                    |   |                                                      |                                                 |                                                 |   |   |   |   |   |   |   |   |   |
| Total                assets, segment                    |   | $                                                         | 53,734,201                                           |                                                 | $      | 22,479,492 |   | $ | 53,734,201 |   | $ | 22,479,492 |   |

|                                                         |   | TOTAL                                               |       | TOTAL                                                |   |
|--------------------------------------------------------------|--------|-----------------------------------------------------|------------|------------------------------------------------------|--------|
|                                                         |   | NINE MONTHS ENDED September 30, |       | THREE MONTHS ENDED September 30, |   |
|                                                         |   | 2007                                                |       | 2006                                                 |   | 2007 |   | 2006 |   |
|                                                         |   | (Unaudited)                                         |       | (Unaudited)                                          |   | (Unaudited) |   | (Unaudited) |   |
| Profit                                                       |   |                                                |       |                                                 |   |   |   |   |   |   |   |   |   |
| Total                profit for reportable segment           |   | $                                                   | 4,099,215  |                                                 | $      | 3,682,100 |   | $ | 2,783,281 |   | $ | 2,043,300 |   |
| Unallocated                amounts:                          |   |                                                | -          |                                                 |   | - |   |   | - |   |   | - |   |
| Other                corporate expense                       |   |                                                | (9,749,790 | )                                                    |   | (107,330 | ) |   | (1,109,455 | ) |   | (25,211 | ) |
| Total                consolidated profit before income taxes |   |                                                | (5,650,575 | )                                                    | $      | 3,574,770 |   |   | 1,673,826 |   |   | 2,018,089 |   |
| Total                assets                                  |   | $                                                   | 57,877,614 |                                                 | $      | 22,494,269 |   | $ | 57,877,614 |   | $ | 22,494,269 |   |

----

|   | a) | $134,653                was incurred for the amortization expense of the placement agent                commission related to debt issue costs, see Note 22 for details; |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | $8,222,184                was incurred for the consultant and professional fees, see the Note                18 and                Note 23 for details; |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | $208,692                was incurred for the audit services                fee; |
|--------|----|---------------------------------------------------------------------------------|

|   | d) | $120,000                was incurred for later filing of 10K; $420,000 was incurred for                registration statement late effective penalty; |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e) | $92,641                was incurred for investor relations, transfer agent and filing                fee |
|--------|----|----------------------------------------------------------------------------------------------------------|

|   | f) | $239,599                was incurred for salary and wages. |
|--------|----|------------------------------------------------------------|

|   | a) | $58,161                was incurred for audit services; |
|--------|----|---------------------------------------------------------|

|   | b) | $45,684                was incurred for foreign exchange                losses; |
|--------|----|---------------------------------------------------------------------------------|

|                                                     |   | NINE MONTHS ENDED September 30, |       | THREE MONTHS ENDED September 30, |   |
|----------------------------------------------------------|--------|-----------------------------------------------------|------------|------------------------------------------------------|--------|
|                                                     |   | 2007                                                |       | 2006                                                 |   | 2007 |   | 2006 |   |
|                                                     |   | (Unaudited)                                         |       | (Unaudited)                                          |   | (Unaudited) |   | (Unaudited) |   |
| Total                  assets, segment                   |   | $                                                   | 53,734,201 |                                                 | $      | 22,479,492 |   | $ | 53,734,201 |   | $ | 22,479,492 |   |
|                                                     |   |                                                |       |                                                 |   |   |   |   |   |   |   |   |   |
| Total                  assets of corporate:              |   |                                                |       |                                                 |   |   |   |   |   |   |   |   |   |
| Cash                  and cash equivalent                |   |                                                | 221,298    |                                                 |   | 14,777 |   |   | 221,298 |   |   | 14,777 |   |
| Bank                  indebtedness                       |   |                                                | 1,218,240  |                                                 |   |   |   |   | 1,218,240 |   |   |   |   |
| Prepaid                  expesnes and deposit            |   |                                                | 9,983      |                                                 |   | - |   |   | 9,983 |   |   | - |   |
| Refundable                  purchase price paid          |   |                                                | 1,200,000  |                                                 |   | - |   |   | 1,200,000 |   |   | - |   |
| Due                  from related parties                |   |                                                | 1,099,345  |                                                 |   | - |   |   | 1,099,345 |   |   | - |   |
| Debit                  issue costs:                      |   |                                                |       |                                                 |   |   |   |   |   |   |   |   |   |
| placement                  agent commission              |   |                                                | 394,547    |                                                 |   | - |   |   | 394,547 |   |   | - |   |
| Accumulative                  other comprehensive income |   |                                                |       |                                                 |   | - |   |   |   |   |   | - |   |
|                                                     |   |                                                |       |                                                 |   |   |   |   |   |   |   |   |   |
| Total                  assets                            |   | $                                                   | 57,877,614 |                                                 | $      | 22,494,269 |   | $ | 57,877,614 |   | $ | 22,494,269 |   |

**26.          **
**Subsequent          Events**

**Item      2. Management’s Discussion and Analysis or Plan of      Operation**

----

----

**Critical      Accounting Policies**

**Revenue      Recognition**

----

**Operational      Results **

|                                                                         |   | **September 30,** |        | **September 30,** |   |
|------------------------------------------------------------------------------|--------|------------------------|-------------|------------------------|--------|
|                                                                         |   | **2007**               |        | **2006**               |   |
|                                                                         |   | **(Unaudited)**        |        | **(Unaudited)**        |   |
|                                                                         |   |                   |        |                   |   |
| Revenue                                                                      |   | $                      | 15,796,295  |                   | $      | 12,365,423 |   |
| Cost                    of goods sold                                        |   |                   | (8,105,852  | )                      |   | (6,908,404 | ) |
| Gross                    profit                                              |   |                   | 7,690,443   |                   |   | 5,457,019 |   |
|                                                                         |   |                   |        |                   |   |   |   |
| Selling                    expenses                                          |   |                   | (675,013    | )                      |   | (421,646 | ) |
|                                                                         |   |                   |        |                   |   |   |   |
| General                    and administravive expenses                       |   |                   | (12,355,921 | )                      |   | (1,427,465 | ) |
| Research                    and development expenses                         |   |                   | (310,084    | )                      |   | (33,138 | ) |
| Total                    operating expenses                                  |   |                   | (13,341,018 | )                      |   | (1,882,249 | ) |
| Operating                    income / (loss)                                 |   |                   | (5,650,575  | )                      |   | 3,574,770 |   |
|                                                                         |   |                   |        |                   |   |   |   |
| Interest                    expenses                                         |   |                   | (2,207,878  | )                      |   | (118,674 | ) |
| Other                    income (expenses)                                   |   |                   | 104,966     |                   |   | (249,643 | ) |
| Government                    subsidies / grants                             |   |                   | 1,690,974   |                   |   | - |   |
|                                                                         |   |                   |        |                   |   |   |   |
| Income                    / (loss) before minority interest and income taxes |   |                   | (6,062,513  | )                      |   | 3,206,453 |   |
| Income                    taxes                                              |   |                   | -           |                   |   | - |   |
| Minority                    interest                                         |   |                   | (1,509,564  | )                      |   | (221,703 | ) |
|                                                                         |   |                   |        |                   |   |   |   |
| Net                    Income / (loss)                                       |   | $                      | (7,572,077  | )                      | $      | 2,984,750 |   |
|                                                                         |   |                   |        |                   |   |   |   |
| Earnings                    / (loss) per share - basic                       |   | $                      | (0.08       | )                      | $      | 0.04 |   |
|                                                                         |   |                   |        |                   |   |   |   |
| Weighted                    average shares outstanding - basic               |   |                   | 96,872,524  |                   |   | 70,259,331 |   |
|                                                                         |   |                   |        |                   |   |   |   |
| Earnings                    / (loss) per share - diluted                     |   | $                      | (0.06       | )                      | $      | 0.04 |   |
|                                                                         |   |                   |        |                   |   |   |   |
| Weighted                    average shares outstanding - diluted             |   |                   | 125,103,425 |                   |   | 70,259,331 |   |

----

*Net      Revenue:*

| 1. | Benda’s                subsidiary, Benda Ebei’s net revenue increased $4.2 MM or 55% to $11.8 MM                for nine months ended September 30, 2007 from $7.6 MM for nine months                ended September 30, 2006, it was due to new products sales in 2007.                New                products introduced in 2007 are B12 Vitamin, Inosine, Gentamycin                80                Thousand Unit, B6 Vitamin, Methiouine, Lincomycin, and Troxerutin,                they                contributed approximately $2.4 MM to our net revenue. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Benda’s                subsidiary, Jiangling Benda’s net revenue dropped to zero for the nine                months ended September 30, 2007 as the plant was closed while it                underwent                an upgrade to meet GMP certification standards. Jiangling Benda was                reopened on Aug 10, 2007 and resumes its production. The management                expects that its sales will boost up in the coming months. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Benda’s                subsidiary, Yidu Benda’s net revenue dropped $4.0 MM or 85% to $700K for                the nine months ended September 30, 2007 from $4.7 MM for the nine                months                ended September 30, 2006 as the plant was temporarily closed since                mid                January to upgrade its waster water treatment system to comply with                new                environmental standards. Yidu Benda has completed the upgrade and                filed                the status report with related regulatory bodies for approval. The                regulatory body is conducting environmental assessment for Benda.                While                awaiting the approval, the Company is transferring part of production                from                Yidu Benda to Jiangling Benda to minimize the negative impact on                sales. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | Benda’s                subsidiary, Beijing Shusai, incorporated on July 15, 2006, realized                net                revenue of $37K for nine months ended September 30, 2007. China’s State                Food and Drug Administration (SFDA) recently experienced an overhaul                in                its policies and regulatory systems in an effort to fight against                corruption in Chinese pharmaceutical industry. Beijing Shusai’s operation                is adversely affected by this recent policy changes which prohibits                some                state-owned hospitals from forming alliances with us. The management                is                now working hard with the local government departments and sort out                the                solutions for the future operation plan. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | Benda’s                newly acquired entity SiBiono (acquired and effective on April 1,                2007)                realized net revenue of $3.0 MM for the nine months ended September                30,                2007. (Refer to note 1 of Note to Consolidation Financial Statements                for                details.) SiBiono’s flagship product, Gendicine is the world’s only                commercialized gene therapy. While only 1,869 vials of Gendicine                were sold                in Q1 2007 by SiBiono, sales ramped to 12,432 vials in Q3 2007 after                Benda’s taking over SiBiono in April. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Cost      of Goods Sold*

*Gross      Profit *

| 1. | Benda                Ebei – gross profit margin dropped by 5% from 43% to 38% during the                reporting period due to the following reasons, |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a) | Launch                new products with lower gross margin of 38%. However, the management                believes that those new products will increase our net revenue as                they                gain market acceptance, therefore we will continue and extend our                efforts                to produce and promote these new products. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Even                though there was a slightly drop of gross profit margin in Benda                Ebei,                however the gross profit margin on the whole was better off with                the                presence of SiBiono, in which the gross margin of Gendicine, SiBiono’s                flagship product was approximately 90% for the nine months ended                September                30, 2007 as a result of low procurement and manufacturing cost and                high                sales price. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Selling      Expenses:*

*General      and Administrative Expenses:*

|   | a) | $291K                finder fee to China Hi-Tech Funds Co.                Ltd.; |
|--------|----|---------------------------------------------------------------------------------|

|   | b) | $135K                amortization expense of the placement agent commission related to                debt                issue costs, (Refer to note 22 of Notes to Consolidated Financial                Statements for details); |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | $8.2MM                consulting and professional fees, (Refer to Note 18 and                Note 23 of Notes to Consolidated Financial Statements for                details); |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | $120K                for late filing of 10K; and $420K for late effective of registration                statement; |
|--------|----|---------------------------------------------------------------------------------------------------------------------|

|   | e) | $173K                cash bonus; |
|--------|----|----------------------------------|

|   | f) | $265K                audit services fee; |
|--------|----|------------------------------------------|

|   | g) | $47K                consulting fee; |
|--------|----|-------------------------------------|

|   | h) | $149K                legal fee, 8K and 10K filing; |
|--------|----|----------------------------------------------------|

|   | i) | $59K                directors remuneration; |
|--------|----|---------------------------------------------|

|   | j) | $32K                conference expenses for events including MoneyShow, Gene Therapy                Conference etc,; |
|--------|----|----------------------------------------------------------------------------------------------------------------------|

|   | k) | $93K                investor relationship activities                expenses; |
|--------|----|-------------------------------------------------------------------------------|

|   | l) | $49K                advertisement expense; |
|--------|----|--------------------------------------------|

|   | m) | $20K                postage, courier and printing expenses; |
|--------|----|-------------------------------------------------------------|

|   | n) | $258K                office expenses; |
|--------|----|---------------------------------------|

|   | o) | $482K                salary and wages; |
|--------|----|----------------------------------------|

|   | p) | $44K                rental and utilities; |
|--------|----|-------------------------------------------|

|   | q) | $205K                travel and transportation expenses. |
|--------|----|----------------------------------------------------------|

*Operating      Income/ (Loss):*

*Interest      Expenses:*

*Government      Subsidies / Grants:*

*Income      Taxes:*

----

*Net      Income/(Loss):*

|   | a) | $1.6                MM as part of the total consideration for SiBiono acquisition |
|--------|----|-----------------------------------------------------------------------------------|

|   | b) | $5.9                MM for fixed assets and equipment                purchase |
|--------|----|-------------------------------------------------------------------------------|

|   | c) | $0.8                MM for plant’s construction |
|--------|----|-------------------------------------------------------|

|   | d) | $1.2                MM for new drug license acquisition |
|--------|----|---------------------------------------------------------|

|   | e) | $0.8                MM for the purchase of land use right |
|--------|----|-----------------------------------------------------------|

**Item      3. Controls and Procedures**

----

**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings.**

**Item      2. Changes in Securities.**

None.

**Item      3. Defaults Upon Senior Securities.**

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

**Item      5. Other Information.**

**Item      6. Exhibits and Reports of Form 8-K.**

----

**SIGNATURES**

|                                   |   | **BENDA                PHARMACEUTICAL, INC.**      |
|----------------------------------------|--------|----------------------------------------------------|
|                                   |   | Registrant                                         |
|                                   |   |                                               |
| Date:                November 19, 2007 |   | By:                */s/                Yiqing Wan* |
|                                   |   | Yiqing                Wan                          |
|                                   |   | President,                Chief Executive Officer  |
|                                   |   | Chairman                of Board of Directors      |

----