**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 March 31, 2007.**




**or**




**o**
            **Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934.**




**For
      the transition period from ______ to ______.**




**Commission
      file number 0-16397**




**BENDA
      PHARMACEUTICAL, INC.**


(Exact
      name of registrant as specified in its charter)




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




**Changjiang
                Tower, 23rd Floor**
              **No.
                1 Minquan Road**
              **Wuhan,
                Hubei Province, PRC**(Address
                of principal executive offices)
            (Zip
                Code)




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


(Registrant’s
      telephone number, including area code)




______________________________________________________________


(Former
      name, former address and former fiscal year, if changed since last
      report)




Check
      whether the issuer (1) has filed all reports required to be filed by Section
      13
      or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
      period that the issuer was required to file such reports), and (2) has been
      subject to such filing requirements for the past 90 days. Yes x No o




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


Yes o  No x




State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of May 21, 2007: 96,964,606 shares of common stock.














**BENDA
      PHARMACEUTICAL, INC.**


**FINANCIAL
      STATEMENTS**




**INDEX**




**PART
              I —
              FINANCIAL INFORMATION**Item
                1.
            Financial
                Statements
            1Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition
            16Item
                3.
            Control
                and Procedures
            22


**PART
              II —
              OTHER INFORMATION**
            23Item
                1.
            Legal
                Proceedings
            23Item
                2.
            Changes
                in Securities
            23Item
                3.
            Defaults
                Upon Senior Securities
            23Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            23Item
                5.
            Other
                Information
            24Item
                6.
            Exhibits
                and Reports on Form 8-K
            24**SIGNATURE**
            25




**Item
      1. Financial Information**




BASIS
      OF
      PRESENTATION




The
      accompanying reviewed financial statements are presented in accordance with
      generally accepted accounting principles for interim financial information
      and
      the instructions to Form 10-QSB and item 310 under subpart A of Regulation
      S-B.
      Accordingly, they do not include all of the information and footnotes required
      by generally accepted accounting principles for complete financial statements.
      In the opinion of management, all adjustments (consisting only of normal
      occurring accruals) considered necessary in order to make the financial
      statements not misleading, have been included. Operating results for the three
      months ended March 31, 2007 are not necessarily indicative of results that
      may
      be expected for the year ending December 31, 2007. The financial statements
      are
      presented on the accrual basis.


1


**Benda
      Pharmaceutical Inc.**


**Consolidated
      Balance Sheets**


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


**March
                  31**
              
              **December
                  31****2007**
              
              **2006****Assets**
              
              (UNAUDITED)Current
                  AssetsCash
                  and cash equivalents
              
              $
              6,632,601
              
              $
              1,676,119Receivables,
                  net
              
              
              7,616,585
              
              
              6,661,048Refundable
                  purchase price paid (Note 5)
              
              
              5,367,801
              
              
              5,367,801Inventories
                  (Note 6)
              
              
              536,044
              
              
              701,339Prepaid
                  expenses and deposits
              
              
              15,797
              
              
              4,818Total
                  current assets
              
              
              20,168,828
              
              
              14,411,125Due
                  from related parties (Note 12)
              
              
              2,143,427
              
              
              1,976,815Property
                  and equipments, net (Note 7)
              
              
              13,766,129
              
              
              13,673,067Intangible
                  assets (Note 8)
              
              
              1,459,487
              
              
              1,501,483Debit
                  Issue Costs (Note 14)
              
              
              377,657
              
              
              -Total
                  Assets
              
              $
              37,915,528
              
              $
              31,562,489**Liabilities
                  &Shareholders' Equity**Current
                  LiabilitiesAccounts
                  payable and accrued liabilities
              
              $
              1,618,755
              
              $
              1,823,030Various
                  taxes payable
              
              
              195,724
              
              
              226,931Bankloans
                  payable (Note 9)
              
              
              -
              
              
              256,492Wages
                  payable
              
              
              231,453
              
              
              145,903Deferred
                  revenues
              
              
              874
              
              
              1,732Total
                  current liabilities
              
              
              2,046,806
              
              
              2,454,088Long-term
                  convertible promissory notes (Note 14)
              
              
              15,497
              
              
              -Due
                  to related parties (Long-term) (Note 12)
              
              
              3,111,807
              
              
              3,034,365Total
                  liabilities
              
              
              5,174,109
              
              
              5,488,454Minority
                  interest
              
              
              2,165,578
              
              
              2,154,356Shareholders'
                  EquityPreferred
                  stock, $0.001par value; 5,000,000 shares authorized;None
                  issued and outstanding
              
              
              -
              
              
              -Common
                  stock, $0.001par value; 150,000,000 shares authorized;96,964,606
                  shares issued and outstanding
              
              
              96,964
              
              
              96,258Additional
                  paid in capital (Note 15)
              
              
              18,945,121
              
              
              13,099,424Retained
                  earnings (unrestricted)
              
              
              7,853,700
              
              
              7,437,663Statutory
                  surplus reserve fund (Note 11)
              
              
              1,869,523
              
              
              1,869,523Accumulative
                  other comprehensive income
              
              
              1,424,132
              
              
              1,090,408Shares
                  issuable for services (Noter 15)
              
              
              -
              
              
              326,403Total
                  Shareholders' Equity
              
              
              30,189,441
              
              
              23,919,680Total
                  Liabilities & Shareholders' Equity
              
              $
              37,529,128
              
              $
              31,562,489





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


2


**Benda
      Pharmaceutical Inc.**


**Consolidated
      Statements of Operations (UNAUDITED)**


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


**THREE
                  MONTHS ENDED**
                **MARCH
                  31,****2007**
              
              **2006**(UNAUDITED)
              
              (UNAUDITED)Revenue
              
              $
              3,029,035
              
              $
              3,656,776Cost
                  of Goods Sold
              
              
              (1,808,902
              )
              
              (1,887,517
              )Gross
                  Profit
              
              
              1,220,133
              
              
              1,769,259Selling
                  Expenses
              
              
              (88,183
              )
              
              (140,208
              )General
                  and administrativeAmortization
              
              
              (67,406
              )
              
              (69,282
              )Depreciation
              
              
              (196,599
              )
              
              (138,427
              )Other
                  general and administrative
              
              
              (382,470
              )
              
              (234,163
              )Total
                  general and administravive
              
              
              (646,475
              )
              
              (441,872
              )Research
                  and development
              
              
              -
              
              
              -Total
                  operating expenses
              
              
              (734,658
              )
              
              (582,080
              )Operating
                  Income
              
              
              485,475
              
              
              1,187,179Interest
                  expenses
              
              
              (17,585
              )
              
              (40,218
              )Other
                  income (expenses)
              
              
              (11,088
              )
              
              (246,770
              )Income
                  before minority interest and income taxes
              
              
              456,802
              
              
              900,191Income
                  taxes (Note 13)
              
              
              -
              
              
              -Minority
                  interest
              
              
              (40,765
              )
              
              (51,504
              )Net
                  Income
              
              $
              416,037
              
              $
              848,687Earnings
                  per share - basic
              
              $
              0.00
              
              $
              0.01Weighted
                  average shares outstanding - basic
              
              
              96,281,951
              
              
              64,942,360Earnings
                  per share - diluted
              
              $
              0.00
              
              $
              0.01Weighted
                  average shares outstanding - diluted
              
              
              124,099,914
              
              
              64,942,360





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


3




**Benda
      Pharmaceutical Inc.**


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


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


**THREE
                  MONTHS ENDED**
                **MARCH
                  31,****2007**
              
              **2006**(UNAUDITED)
              
              (UNAUDITED)**Cash
                  Flows FromOperating Activities**Net
                  Income
              
              $
              416,037
              
              $
              848,687Adjustments
                  to reconcile net income to net cash provided by operating
                  activities:Bad
                  Debt Provision (Recovery)
              
              
              (70,986
              )
              
              108,493Minority
                  Interest
              
              
              11,223
              
              
              61,697Loss
                  on disposals of fixed assets
              
              
              12,025
              
              
              246,819Depreciation
              
              
              205,757
              
              
              181,265Amortization
              
              
              67,406
              
              
              63,999Amortization
                  on debt issue cost
              
              
              8,743
              
              
              -Interest
                  expense (amortization of debt discount)
              
              
              15,497
              
              
              -Changes
                  in operating assets and liabilities:Account
                  receivable
              
              
              (884,551
              )
              
              (91,351
              )Prepaid
                  expenses and deposits
              
              
              (10,979
              )
              
              -Inventories
              
              
              165,295
              
              
              (271,113
              )Accounts
                  payable and accrued liabilities
              
              
              (204,275
              )
              
              559,440Others
                  payable
              
              
              84,693
              
              
              (13,826
              )Various
                  taxes payable
              
              
              (31,208
              )
              
              (15,319
              )**Net
                  cash provided by operating activities**
              
              
              (215,323
              )
              
              1,678,791**Cash
                  Flows From Investing Activities**Purchases
                  of intangible assets
              
              
              -
              
              
              (621,400
              )Construction
                  in progress
              
              
              (100,973
              )
              
              (671,371
              )Loans
                  to related parties, net
              
              
              (166,612
              )
              
              274**Net
                  cash used in investing activities**
              
              
              (267,585
              )
              
              (1,292,497
              )**Cash
                  Flows From Financing Actives**Proceeds
                  of long term debt - promissory note (Note 14)
              
              
              5,520,000
              
              
              -Proceeds
                  and repayments of borrowings under related parties, net
              
              
              77,442
              
              
              (200,782
              )Proceeds
                  and repayments of borrowings under bank loans, net
              
              
              (256,492
              )
              
              (12,057
              )**Net
                  cash provided by (used in) financing activities**
              
              
              5,340,950
              
              
              (212,839
              )Effect
                  of exchange rate changes on cash
              
              
              98,441
              
              
              51,792**Net
                  increase in cash and cash equivalents**
              
              
              4,956,482
              
              
              225,247**Cash
                  and cash equivalents, beginning of period**
              
              
              1,676,119
              
              
              308,082**Cash
                  and cash equivalents, end of  period**
              
              $
              6,632,601
              
              $
              533,329**Interest
                  paid**
              
              $
              2,565
              
              $
              37,832**Income
                  taxes paid**
              
              $
              -
              
              $
              -




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





4


**Benda
      Pharmaceutical Inc.**


**Notes
      to Consolidated Financial Statements**


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




**1.** **Organization**




Benda
      Pharmaceutical, Inc. is engaged in the business of identifying, discovering,
      developing, and manufacturing conventional medicines, active pharmaceuticals,
      bulk chemicals (or pharmaceutical immediates), and Traditional Chinese Medicines
      (“TCM”) for the treatment of some of the most widespread common ailments and
      diseases (e.g. common cold, diabetes, and cancer). For the historical
      development of the organization, it should be read in conjunction with the
      consolidated balance sheet information as of December 31, 2006 was derived
      from
      the audited consolidated financial statements included in the Company's Annual
      Report on Form 10-K.





**2.** **Basis
      of Preparation**




The
      unaudited consolidated financial statements of Benda Pharmaceutical Inc.and
      subsidiaries (the "Company") have been prepared in accordance with U.S.
      generally accepted accounting principles for interim financial information
      and
      pursuant to the requirements for reporting on Form 10-Q. Accordingly, they
      do
      not include all the information and footnotes required by accounting principles
      generally accepted in the United States of America for annual financial
      statements. However, the information included in these interim financial
      statements reflects all adjustments (consisting solely of normal recurring
      adjustments) which are, in the opinion of management, necessary for the fair
      presentation of the consolidated financial position and the consolidated results
      of operations. Results shown for interim periods are not necessarily indicative
      of the results to be obtained for a full year. The consolidated balance sheet
      information as of December 31, 2006 was derived from the audited consolidated
      financial statements included in the Company's Annual Report on Form 10-K.
      These
      interim financial statements should be read in conjunction with that
      report.





**3.** **Use
      of Estimates**




The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements,
      and
      the reported amounts of revenue and expenses during the reporting period. Actual
      results when ultimately realized could differ from those estimates.





**4.** **Significant
      Accounting Policies and New Pronouncement**





**Cash
      and Cash Equivalents**




Cash
      and
      cash equivalents include cash on hand, cash on deposit with various financial
      institutions in the PRC, and all highly-liquid investments with original
      maturities of three months or less at the time of purchase.




**Accounts
      Receivable**




Accounts
      receivable are carried at original invoice amount less an estimate made for
      doubtful accounts based on a review of all outstanding amounts on a monthly
      basis. Management judgment and estimates are made in connection with
      establishing the allowance for doubtful accounts. Specifically, we analyze
      the
      aging of accounts receivable balances, historical bad debts, customer
      concentrations, customer credit-worthiness, current economic trends and changes
      in our customer payment terms. Significant changes in customer concentration
      or
      payment terms, deterioration of customer credit-worthiness or weakening in
      economic trends could have a significant impact on the collectibility of
      receivables and our operating results. If the financial condition of our
      customers were to deteriorate, resulting in an impairment of their ability
      to
      make payments, additional allowances may be required.




5




**Inventories**




Inventories,
      which are primarily comprised of raw materials, packaging materials, and
      finished goods, are stated at the lower of cost or net realizable value, using
      the first-in, first-out (“FIFO”) method. Cost being determined on the basis of a
      moving average. The Company evaluates the need for reserves associated with
      obsolete, slow-moving and non-salable inventory by reviewing net realizable
      values on a periodic basis.




**Property
      and Equipment**




Property
      and equipment are recorded at cost and depreciated using the straight-line
      method, with an estimated 5% salvage value of original cost, over the estimated
      useful lives of the assets as follows:


Buildings
              
              20-30
                  yearsMachinery
                  and equipment
              
              10-15
                  yearsMotor
                  Vehicle
              
              5
                  yearsElectronic
                  and office equipment
              
              5
                  years





Expenditures
      for repairs and maintenance, which do not improve or extend the expected useful
      lives of the assets, are expensed as incurred while major replacements and
      improvements are capitalized.




When
      property or equipment is retired or disposed of, the cost and accumulated
      depreciation are removed from the accounts, with any resulting gains or losses
      being included in net income or loss in the year of disposition.




**Impairment
      of Long-Lived Assets**




The
      Company evaluates potential impairment of long-lived assets, in accordance
      with
      Statement of Financial Accounting Standards (“SFAS”) No. 144, *Accounting
      for the Impairment or Disposal of Long-Lived Assets* ,
      which
      requires the Company to (a) recognize an impairment loss only if the carrying
      amount of a long-lived asset is not recoverable from its undiscounted cash
      flows
      and (b) measure an impairment loss as the difference between the carrying amount
      and fair value of the asset. The Company believes that long-lived assets in
      the
      accompanying consolidated balance sheets are appropriately valued at March
      31,
      2007 and December 31, 2006.




**Intangible
      Assets**




The
      Company’s intangible assets are stated at cost less accumulated amortization and
      are comprised of land-use rights and drug permits and licenses. Land-use rights
      are related to land the Company occupies in Hubei Province, PRC and are being
      amortized on a straight-line basis over a period of 40 years. Drug permits
      and
      licenses are being amortized on a straight-line basis over a period of 10 years. Technology
      formulas know how is being amortized on a straight-line basis over a period
      of
      10 years.




**Revenue
      Recognition**




The
      Company recognizes revenue when the significant risks and rewards of ownership
      have been transferred pursuant to PRC law, including such factors as when
      persuasive evidence of an arrangement exists, delivery has occurred, the sales
      price is fixed or determinable, sales and value-added tax laws have been
      complied with, and collectibility is reasonably assured. The Company generally
      recognizes revenue when its products are shipped.




**Research
      and Development**




Research
      and development costs are expensed as incurred and consist primarily of salaries
      and related expenses of personnel engaged in research and development
      activities. Rather than spend considerable sums internally on R&D in a
      market where the Company can not easily protect its results of development,
      the
      Company prefers to leverage its management team’s extensive industrial network
      and knowledge in finding new drugs and treatments that may be potentially very
      successful but which have not yet been brought to market.





**Income
      Taxes**




The
      Company accounts for income taxes under the liability method in accordance
      with
      SFAS No. 109, *Accounting
      for Income Taxes* .
      Deferred tax assets and liabilities are recorded for the estimated future tax
      effects of temporary differences between the tax basis of assets and liabilities
      and amounts reported in the accompanying consolidated balance sheets. Deferred
      tax assets are reduced by a valuation allowance if current evidence indicates
      that it is considered more likely than not that these benefits will not be
      realized.




6




**Comprehensive
      Income**




The
      Company has adopted SFAS No. 130, *Reporting
      Comprehensive Income,* which
      establishes standards for reporting and displaying comprehensive income, its
      components, and accumulated balances in a full-set of general-purpose financial
      statements. Accumulated other comprehensive income represents the accumulated
      balance of foreign currency translation adjustments.




**Concentration
      of Credit Risk**




A
      significant portion of the Company's cash at December 31, 2006 and 2005 is
      maintained at various financial institutions in the PRC which do not provide
      insurance for amounts on deposit.





The
      Company has not experienced any losses in such accounts and believes it is
      not
      exposed to significant credit risk in this area.




The
      Company operates principally in the PRC and grants credit to its customers
      in
      this geographic region. Although the PRC is economically stable, it is always
      possible that unanticipated events in foreign countries could disrupt the
      Company’s operations.




**Basic
      and Diluted Earnings Per Share**




The
      Company adopted Statement of Financial Accounting Standards No. 128, “Earnings
      Per Share” (SFAS128). SFAS 128 requires the presentation of earnings per share
      (EPS) as Basic and Diluted EPS. Basic earnings per share are calculated by
      taking net income divided by the weighted average shares of common stock
      outstanding during the period. Diluted earnings per share is calculated by
      taking basic weighted average shares of common stock and increasing it for
      dilutive common stock equivalents such as warrants that are in the money.





**Foreign
      Currency Translation**




The
      functional currency of the Company is the Renminbi (“RMB”), the PRC’s currency.
      The Company maintains its financial statements using the functional currency.
      Monetary assets and liabilities denominated in currencies other than the
      functional currency are translated into the functional currency at rates of
      exchange prevailing at the balance sheet dates. Transactions denominated in
      currencies other than the functional currency are translated into the functional
      currency at the exchange rates prevailing at the dates of the transaction.
      Exchange gains or losses arising from foreign currency transactions are included
      in the determination of net income (loss) for the respective
      periods.




For
      financial reporting purposes, the financial statements of the Company, which
      are
      prepared using the RMB, are translated into the Company’s reporting currency,
      United States Dollars. Balance sheet accounts are translated using the closing
      exchange rate in effect at the balance sheet date and income and expense
      accounts are translated using the average exchange rate prevailing during the
      reporting period. Adjustments resulting from the translation, if any, are
      included in accumulated other comprehensive income (loss) in stockholder’s
      equity.




The
      exchange rates in effect at March 31, 2007 and December 31, 2006 were RMB 1
      for
      $0.12952 and $0.12825, respectively.




**Fair
      Value of Financial Instruments**





The
      Company's financial instruments include cash equivalents, accounts receivable,
      other receivables, accounts payable, accrued expenses, value-added taxes,
      short-term and long-term bank loans, and loans payable to related parties.
      The
      carrying amounts of financial instruments other than long-term obligations
      approximate fair value due to their short maturities. Long-term obligations
      approximate fair value based upon rates currently available for similar
      instruments.





7




**Recent
      Accounting Pronouncements**




In
      July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an
      Interpretation of FASB Statement *No. 109* (“FIN
      48”), which clarifies the accounting for uncertainty in income taxes recognized
      in an enterprise's financial statements. FIN 48 prescribes a two-step process
      to
      determine the amount of tax benefit to be recognized. First, the tax position
      must be evaluated to determine the likelihood that it will be sustained upon
      examination. If the tax position is deemed "more-likely-than-not" to be
      sustained, the tax position is then valued to determine the amount of benefit
      to
      be recognized in the financial statements. FIN 48 will be effective as of the
      beginning of the Company’s 2007 fiscal year. The Company is currently evaluating
      the impact that adopting FIN 48 will have on its financial statements.





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      ("SFAS") No. 157, "Fair Value Measurements", which establishes a framework
      for
      reporting fair value and expands disclosures about fair value measurements.
      SFAS
      No. 157 is effective for financial statements issued for fiscal years beginning
      after November 15, 2007 and interim periods within those fiscal years. The
      Company is currently assessing the impact of the adoption of this standard
      on
      its financial statements.





In
      September 2006, FASB issued SFAS No. 158,"Employers' Accounting for Defined
      Benefit Pension and Other Postretirement Plans-An amendment of SFAS No. 87,
      88,
      106, and 132(R). This Statement improves financial reporting by requiring an
      employer to recognize the overfunded or underfunded status of a defined benefit
      postretirement plan (other than a multiemployer plan) as an asset or liability
      in its statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a
      business entity or changes in unrestricted net assets of a not-for-profit
      organization. This Statement also improves financial reporting by requiring
      an
      employer to measure the funded status of a plan as of the date of its year-end
      statement of financial position, with limited exceptions. An employer with
      publicly traded equity securities is required to initially recognize the funded
      status of a defined benefit postretirement plan and to provide the required
      disclosures as of the end of the fiscal year ending after December 15, 2006
      with
      earlier application allowed. The Company does not expect the adoption of SFAS
      No. 158 to have a material impact on its consolidated result of operations
      and
      financial condition.





**Recently
      Adopted Accounting Pronouncements**




SFAS
      No. 123R, *Share-Based
      Payment, an Amendment of SFAS No. 123* ,
      was
      issued in December 2004 and was effective as of the beginning of the
      Company’s 2006 fiscal year. SFAS No. 123R requires all share-based payments
      to qualified individuals, including grants of employee stock options, to be
      recognized as compensation expense in the financial statements based on their
      grant date fair values. Upon the reverse acquisition of the Company and Ever
      Leader, the Company agreed to issue 706,195 shares of its common stock to
      various consultants as compensation, which were valued at $0.4622 each and
      recognized as consulting fees in the year ended December 31, 2006.





**5.** **Refundable** **Purchase
      Price Paid**




In
      December 2006, Benda, through its 95% owned subsidiary Benda Ebei, plans to
      enter into an agreement with the two controlling shareholders of Shenzhen
      Sibiono GeneTech Co. Ltd. (“SiBiono”) to purchase a total of approximately 58%
      of the ownership of Sibiono for total cash consideration of approximately Rmb
      60
      million (approximately $7.7 million). Due to this possible acquisition, Benda,
      through its subsidiaries Everleader and Benda Ebei, as of December 31, 2006,
      the Company
      had advanced RMB 13,027,618.55 (or approximately $1,670,743) to Shenzhen
      Yuanxing Gene City Development Co., Ltd. and HK$19,419,599.26 (or approximately
      $2,497,058) to Shenzhen Yuanzheng Investment Development Co., Ltd. as deposits
      for the pending acquisition of their shares in SiBiono by Benda Since the
      acquisition was only formally signed on March 31, 2007 and closed until April
      5,
      2007, the total advanced amount of $4,167,801 was recorded as refundable
      purchase price paid on December 31, 2006.




On,
      December 7, 2006, Benda Ebei paid $1.2 million to SECO (Shenzhen) Biotech Co.,
      Ltd. (“SECO”) pursuant to a purchase agreement signed between SECO and Benda
      Ebei on December 3, 2006 to acquire a technology know-how and drug
      specifications / technical parameters in producing a Gastropathy drug owned
      by
      SECO. According to the purchase agreement, Benda Ebei shall pay $1.5 million
      in
      total for the acquisition, of which $1.2 million should be paid within 5
      business days after execution of the purchase agreement and the balance shall
      be
      paid when the Company receives the U.S. FDA approval on product certification
      in
      four months upon the signing date of the agreement. The purchase price paid
      was
      HK$9,341,220.00 (approximately $1.2 million) and was recorded as Refundable
      Purchase Price Paid on December 31, 2006 as the deal had not been closed as
      of
      March 31, 2007 and is refundable per agreement if the US FDA approval is not
      obtained.




8




**6.** **Inventories**




The
      Company’s inventories at March
      31,
      2007 and December 31, 2006 are comprised as follows:


March
                  31, 2007
              
              December
                  31, 2006(Unaudited)Raw
                  materials
              
              $
              315,864
              
              $
              311,064Packing
                  materials
              
              
              50,861
              
              
              80,639Finished
                  goods
              
              
              169,320
              
              
              309,637Total
                  inventories at cost
              
              
              536,044
              
              
              701,339Less:
                  Reserves
              
              
              -
              
              
              -Total
                  inventories, net
              
              $
              536,044
              
              $
              701,339





No
      reserve for obsolete, slow-moving or non-salable inventory was required at
      March
      31, 2007 and December 31, 2006.




**7.** **Property
      and Equipment**




The
      Company’s property and equipment at March
      31,
      2007 and December 31, 2006 are comprised as follows:




March
                  31, 2007
              
              December
                  31, 2006(Unaudited)Buildings
              
              $
              2,431,366
              
              $
              2,227,710Machinery
                  and equipment
              
              
              4,766,535
              
              
              3,941,187Office
                  equipment
              
              
              11,378
              
              
              10,672Motor
                  Vehicles
              
              
              35,984
              
              
              32,971Cost
              
              
              7,245,264
              
              
              6,212,540Less:
                  Accumulated DepreciationBuildings
              
              $
              (931,821
              )
              $
              (875,351
              )Machinery
                  and equipment
              
              
              (2,009,614
              )
              
              (1,837,221
              )Office
                  equipment
              
              
              (4,976
              )
              
              (4,558
              )Motor
                  Vehicles
              
              
              (10,520
              )
              
              (7,129
              )Accumulated
                  Depreciation
              
              
              (2,956,931
              )
              
              (2,724,260
              )Construction
                  in progress
              
              $
              9,477,797
              
              $
              10,184,787Total
                  property and equipment, net
              
              $
              13,766,129
              
              $
              13,673,067




Total
      depreciation expense allocated to general and administrative expense was
      $190,698 and $657,382 for quarter ended March 31, 2007 and year ended December
      31, 2006.




9





**8.** **Intangible
      Assets**




The
      Company’s intangible assets at March
      31,
      2007 and December 31, 2006 are comprised as follows:


March
                  31, 2007
              
              December
                  31, 2006(Unaudited)Land-use
                  rights
              
              $
              1,084,036
              
              $
              1,068,036Drugs
                  permits and licenses
              
              
              1,071,723
              
              
              1,055,893Technology
                  formulas
              
              
              686,448
              
              
              679,700Cost
              
              
              2,842,206
              
              
              2,803,630Less:
                  Accumulated amortizationLand-use
                  rights
              
              
              (162,156
              )
              
              (150,465
              )Drugs
                  permits and licenses
              
              
              (1,136,536
              )
              
              (1,085,471
              )Technology
                  formulas
              
              
              (84,027
              )
              
              (66,210
              )Accumulated
                  amortization
              
              
              (1,382,719
              )
              
              (1,302,146
              )Total
                  intangible assets, net
              
              $
              1,459,487
              
              $
              1,501,483




The
      technology formulas represent the formulas special know how for Yanlong
      Anti-Cancer Oral Liquid, and the Pharyngitis Killer Therapy. On March 31, 2007,
      the values of these formulas are $647,592 and $38,856 respectively.




**9.** **Bank
      Loans**




The
      Company’s bank loans at March
      31,
      2007 and December 31, 2006 are comprised as follows:


March
                  31, 2007
              
              December
                  31, 2006(Unaudited)Bank
                  loans due within one year
              
              $
              -
              
              $
              256,492Bank
                  loans due after one year
              
              
              -
              
              
              -Total
                  debt
              
              $
              -
              
              $
              256,492




As
      of
      December 31, 2006, the Company had one outstanding bank loans which were used
      primarily to fund construction in progress projects and for general working
      capital purposes. This loan carried annual interest rates ranging from 5.59%
      and
      was guaranteed by an unrelated party and the full amount was repaid in the
      first
      quarter of 2007.





Total
      interest expense paid
      related to the Company’s outstanding bank loans was $2,565 and $113,458 for the
      quarter ended March 31, 2007 and year ended December 31, 2006,
      respectively.




**10.** **Pension
      and Employment Liabilities**




As
      stipulated by the relevant laws and regulations for enterprises operating in
      the
      PRC, the Company is required to maintain a defined contribution retirement
      plan
      for all of its employees who are residents of the PRC. All retired employees
      of
      the Company are entitled to an annual pension equal to their basic annual salary
      upon retirement. The Company contributes to a state sponsored retirement plan
      approximately 20% of the base salary of each of its employees and has no further
      obligations for the actual pension payments or post-retirement benefits beyond
      the annual contributions. The state sponsored retirement plan is responsible
      for
      the entire pension obligations payable for all past and present
      employees.




10




**11.** **Statutory
      Reserves**




As
      stipulated by the relevant laws and regulations for enterprises operating in
      the
      PRC, the Company is required to make annual appropriations to a statutory
      surplus reserve fund for each of its PRC subsidiaries. Specifically, the Company
      is required to allocate 15% its profits after taxes at the fiscal year ended,
      as
      determined in accordance with the PRC accounting standards applicable to the
      Company, to a statutory surplus reserve until such reserve reaches 50% of the
      registered capital of the Company. As of March 31, 2007, and December 31, 2006
      and 2005, the registered capital of the Company’s PRC subsidiaries was
      $12,690,184 and $12,017,575 respectively.





**12.** **Related
      Party Transactions**




Due
      from related
      parties at March 31, 2007 and December 31, 2006 are comprised as
      follows:




March
                  31, 2007
              
              December
                  31, 2006(Unaudited)Yiqing,
                  WanDue
                  to Ever Leader Holdings Co. Ltd.
              
              $
              486,647
              
              $
              455,275Hubei
                  Benda Science and Technology Co. LtdDue
                  to Yidu Benda Chemicals Co. Ltd.
              
              
              1,431,503
              
              
              1,299,479Due
                  to Ever Leader Holdings Co. Ltd.
              
              
              209,087
              
              
              210,518Feng
                  WangDue
                  to Beijing Shusai Pharyngitis Research Co. Ltd.
              
              
              16,190
              
              
              11,543Total
                  due from related parties
              
              $
              2,143,427
              
              $
              1,976,815




Due
      to
      related parties at March 31, 2007 and December 31, 2006 are comprised as
      follows:


March
                  31, 2007
              
              December
                  31, 2006(Unaudited)Hubei
                  Benda Science and Technology Co. LtdDue
                  from Hubei Tongji Benda Ebei Phamacetucial Co. Ltd.
              
              $
              260,042
              
              $
              236,205Due
                  from Jiangliang Benda Pharamaceutical Co. Ltd.
              
              
              1,876,255
              
              
              1,833,358Wei
                  XuDue
                  from Hubei Tongji Benda Ebei Phamacetucial Co. Ltd.
              
              
              953,256
              
              
              943,865Due
                  from Beijing Shusai Pharyngitis Research Co. Ltd.
              
              
              22,254
              
              
              20,937$
              3,111,807
              
              $
              3,034,365




The
      above
      advances bear no interest and the above loans due to related parties are
      unsecured, non-interest bearing and are not convertible into equity. Long-term
      debts are due on December 31, 2012. Proceeds from the above loans were used
      primarily for general working capital purposes.





All
      those
      related parties incur advances to different companies within the group when
      those companies have cash flow shortages from time to
      time, or withdraw funds when those companies have excessive funds in
      order to inject funds to other companies within the group.





The
      overall net impact on the relative party transactions was always negative.
      In
      other words, the related parties lend money to the companies within the group
      during the reported period ended at March 31, 2007 and December 31,
      2006.





**13.** **Income
      Taxes**




Benda
      is
      subject to Delaware, United State of America tax, but no provision for income
      taxes were made for the quarter ended March 31, 2007 and 2006 as Benda did
      not
      have reportable taxable income for the period.




11





Ever
      Leader, a wholly owned subsidiary of Benda, is subject to Hong Kong tax, but
      no
      provisions for income taxes were made for the quarter ended March 31, 2007
      and
      2006 as Ever Leader did not have reportable taxable income for the periods.





Benda
      Ebei was registered as a Sino-Foreign Equity Joint Venture on December 25,
      2003
      and is subject to the tax laws applicable to Sino-Foreign Equity Joint Ventures
      in the PRC. Benda Ebei is fully exempt from PRC enterprise income tax for two
      years starting from the first profit-making year, followed by a 50% reduction
      in
      income taxes for the following three years, commencing from the first profitable
      year.





Jiangling
      Benda and Yidu Benda are cross-municipal investment entities and enjoy the
      same
      tax treatment as Sino-Foreign Joint Ventures and were therefore exempt from
      PRC
      enterprise income tax for two years starting from the first profit-making year,
      followed by a 50% reduction in income taxes for the following three years,
      commencing from the first profitable year. Cross-municipal investments entities
      refer to entities that are incorporated in one municipal region but have
      investments in another municipal region.





Beijing
      Shusai does not have taxable income for the quarter ended March 31, 2007 and
      2006.





The
      Company expects that some of these exemption periods will expire in November
      2007, after which Benda Ebei, Jiangling Benda and Yidu Benda can be expected
      to
      an average 16.5% tax rate. The remaining tax holidays will expire on November
      2010, thereafter these operating companies will be subject to the regular 33%
      tax rate n corporate profits. The Company is in the process of obtaining the
      approval from the relevant government authorities for the tax exemption status
      as a Sino-Foreign Equity Joint Venture from November 2005.





As
      a
      result of the above tax exemptions, there was no income taxes payable for the
      Company for the quarter ended March 31, 2007 and year ended December 31, 2006.
      Had these tax exemptions not been available to the Company, income tax expense
      would have increased by approximately $250,800 and $424,593 for the quarter
      ended March 31, 2007 and 2006, respectively.





**14.** **Long
      Term Convertible Promissory Note**





In
      order
      to finance the acquisition of a majority of the shares of Shenzhen SiBiono
      GeneTech Co., Ltd. (“SiBiono”), on April 5, 2007, we entered into an Investment
      Agreement with certain accredited and institutional investors (“Investors”) who
      had also participated in the subscription for $12,000,000 of our common stock
      pursuant to certain Securities Purchase Agreements dated November 15, 2006
      (“November Financing”). Pursuant to the Investment Agreement, the Investors
      purchased a total of 252 Units for $7,560,000 with each Unit consisting of
      (i) a
      convertible promissory note in the principal amount of Thirty Thousand Dollars
      ($30,000) which shall be convertible into 54,087 shares of the Company's common
      stock, par value $0.001 per share, and (ii) a warrant to acquire 54,087
      shares of Common Stock at an exercise price of $0.555 per share. The Notes
      shall
      bear an interest rate of four percent per annum until the Buyer elects to
      exercise the right to convert, and shall mature on March 28, 2009.





The
      securities underlying the Notes and Warrants issued to the Investors pursuant
      to
      the terms of the Investment Agreement shall be subject to the terms of the
      Make
      Good Agreement entered into in connection with the November Financing (the
“Make
      Good Agreement”). The Company further represented to the Investors that the
      targeted net income of the Company for fiscal year end 2007 (“FY07 Net Income”)
      will be greater than or equal to $10.0 million (adjusted for any non-cash
      charges associated with this Agreement and the SPA) (the "Performance
      Threshold"). In the event the Performance Threshold is not attained, then we
      shall promptly issue, or cause to be issued to the Investors or their designee,
      a pro rata portion of One Million (1,000,000) shares of Common Stock for every
      one (1) cent by which the Company’s earnings per share, determined on a fully
      diluted basis (“Earnings Per Share”) is less than $0.065.





As
      of
      March 31, 2007, an amount of $5,520,000 had been received which represented
      184
      units were subscripted by the investors.




12




According
      to EITF 98-5, “Accounting for Convertible Securities with Beneficial Conversion
      Features or Contingently Adjustable Conversion Ratios”, the warrants issued in
      connection with the convertible promissory notes were accounted for under APB
      14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase
      Warrants”. Under APB 14, the proceeds received from the lenders are to be
      allocated to the convertible promissory notes ad the note warrants in proportion
      to their respective fair value. The fair value of the warrants was calculated
      using the Black-Scholes option pricing model with the following assumptions:
      a
      risk-free interest rate of 4.5%, expected volatility of 25%, a dividend yield
      of
      0% and a contractual life of 2 years. The fair value of convertible
      promissory notes and warrants are presented as a component of additional paid-in
      capital in the shareholders equity. The discount represents the theoretical
      most
      beneficial conversion features to the holder of the convertible promissory
      notes
      measured at the issuance date of convertible promissory notes.  The
      discount represents mostly the theoretical beneficial conversion features to
      the
      holder of the convertible promissary notes measured at the issuance date of
      convertible promissory notes.





Keating
      Investment, LLC acted as the placement agent for the fund raised from the
      convertible promissory notes and the placement agent fee was 7% for the fund
      raised.





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




As
      of
      December 31, 2006, the Company had an aggregate of:




(a)
            96,258,411
                shares of Common Stock issued and
                outstanding;


(b)
            706,195
                shares of Common Stock to be issuable for services for various
                consultants;


(c)
            None
                shares of Preferred Stock issued and
                outstanding;


(d)
            28,557,936
                Warrants, each convertible into one (1) share of the Company’s Common
                Stock, issued and outstanding, and;


(e)
            None
                Options issued and outstanding.





As
      of
      March 31, 2007, the amount of 706,195 shares of the Company Common Stock ($0.001
      par value) were issued to various consultants 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. Therefore, as
      of
      March 31, 2007, the Company has an aggregate of:





(a)
            96,964,606
                shares of Common Stock issued and
                outstanding;


(b)
            None
                shares of Preferred Stock issued and
                outstanding;


(c)
            28,557,936
                Warrants, each convertible into one (1) share of the Company’s Common
                Stock, issued and outstanding, and;


(d)
            None
                Options issued and outstanding.





**16.** **Commitments
      and Contingencies**




As
      of
      March 31, 2007, the Company did not have any significant outstanding commitments
      or contingent liabilities.




**17.** **Segment
      Information**




The
      Company has four core operating segments: Benda Ebei, Jiangling Benda, Yidu
      Benda and Beijing Shusai. Benda Ebei manufactures injection solutions and other
      conventional medicines, Jiangling Benda manufactures active pharmaceutical
      ingredients, Yidu Benda manufactures bulk chemicals and Beijing Shusai operates
      and distributes Pharyngitis Killer Therapy.





Selected
      financial information for each of these segments for the quarter ended March
      31,
      2007 and 2006 is as follows:




13





Three
                  Months Ended March 31,Benda
                  Ebei2007
              
              2006(Unaudited)
              
              (Unaudited)Revenue
                  from external customers
              
              $
              2,339,463
              
              $
              2,373,076Inter
                  segement revenue
              
              
              -
              
              
              -Segment
                  profit (loss)
              
              $
              570,446
              
              $
              845,864




Three
                  Months Ended March 31,Jiangling
                  Benda2007
              
              2006(Unaudited)
              
              (Unaudited)Revenue
                  from external customers
              
              $
              -
              
              $
              15,404Inter
                  segement revenue
              
              
              -
              
              
              -Segment
                  profit (loss)
              
              $
              19,951
              
              $
              (78,161
              )




Three
                  Months Ended March 31,Yidu
                  Benda2007
              
              2006(Unaudited)
              
              (Unaudited)Revenue
                  from external customers
              
              $
              684,465
              
              $
              1,268,296Inter
                  segement revenue
              
              
              -
              
              
              -Segment
                  profit (loss)
              
              $
              182,624
              
              $
              440,782
  Three
                    Months Ended March 31,Beijing
                    Shusai2007
                
                2006(Unaudited)
                
                (Unaudited)Revenue
                    from external customers
                
                $
                5,107
                
                $
                -Inter
                    segement revenue
                
                
                -
                
                
                -Segment
                    profit (loss)
                
                $
                (22,241
                )
                $
                -
  Three
                  Months Ended March 31,Total2007
              
              2006(Unaudited)
              
              (Unaudited)Revenue
                  from external customers
              
              $
              3,029,035
              
              $
              3,656,776Inter
                  segement revenue
              
              
              -
              
              
              -Segment
                  profit (loss)
              
              $
              750,780
              
              $
              1,208,485




There
      were changes in segment assets, basis of segmentation or the way in which
      segment profit was measured for the quarter ended March 31, 2007 and
      2006.




14





Three
                  Months Ended March 31,Total2007
              
              2006(Unaudited)
              
              (Unaudited)ProfitTotal
                  profit for reportable segment
              
              $
              750,780
              
              $
              1,208,485Unallocated
                  amounts:
              
              
              -
              
              
              -Other
                  corporate expense
              
              
              (293,978
              )
              
              (308,294
              )Total
                  consolidated profit after income taxes
              
              $
              456,802
              
              $
              900,191


The
      major
      reason for the decrease in the total consolidated profit after income taxes
      was
      due to the fact that on January 10, 2007 Yidu Benda received a government order
      issued by the local government, Yidu Benda plant has to be shut down since
      the
      mid of January 2007 for improvement of our waste water treatment systems. The
      order requires us to finish the improvement and be compliant by June 30, 2007.
      We expect our Yidu Benda plant to resume production by July 1,
      2007.




**18.** **Basic
      and Diluted Weighted Average Number of Shares**




**March
                  31**
              
              **December
                  31****2007**
              
              **2006**(Unaudited)
              
              (Unaudited)Basic
                  weighted average number of shares
              
              
              96,281,951
              
              
              73,414,057Assumed
                  exercise of warrants & convertible promissory notes
              
              
              27,817,963
              
              
              1,450,226Diluted
                  weighted average number of shares
              
              
              124,099,914
              
              
              74,864,283




**19.** **Subsequent
      Events**




Except
      the acquisition of a majority of the shares of Shenzhen SiBiono GeneTech Co.,
      Ltd, the acquisition contract signed on March 31, 2007 and the related financing
      which will be closed on April 5, 2007, that mentioned in Note 5 (“Refundable
      Purchase Price Paid”) and Note 14 (“Long Term Convertible Promissory Note”),
      there is not other material subsequent event.




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




Forward-Looking
      Statements




The
      following discussion may contain certain forward-looking statements within
      the
      meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
      Securities Exchange Act of 1934. Such statements are intended to be covered
      by
      the safe harbors created by such provisions. These statements include the plans
      and objectives of management for future growth of the Company, including plans
      and objectives related to the consummation of acquisitions and future private
      and public issuances of the Company's equity and debt securities. The
      forward-looking statements included herein are based on current expectations
      that involve numerous risks and uncertainties. Assumptions relating to the
      foregoing involve judgments with respect to, among other things, future
      economic, competitive and market conditions and future business decisions,
      all
      of which are difficult or impossible to predict accurately and many of which
      are
      beyond the control of the Company. Although the Company believes that the
      assumptions underlying the forward-looking statements are reasonable, any of
      the
      assumptions could be inaccurate and, therefore, there can be no assurance that
      the forward-looking statements included in this Form 10-QSB will prove to be
      accurate. In light of the significant uncertainties inherent in the
      forward-looking statements included herein, the inclusion of such information
      should not be regarded as a representation by the Company or any other person
      that the objectives and plans of the Company will be achieved.




15




The
      words
“we,” “us” and “our” refer to the Company. The words or phrases “would be,”
“will allow,” “intends to,” “will likely result,” “are expected to,” “will
      continue,” “is anticipated,” “estimate,” “project,” or similar expressions are
      intended to identify “forward-looking statements.” Actual results could differ
      materially from those projected in the forward looking statements as a result
      of
      a number of risks and uncertainties, including but not limited to: (a) limited
      amount of resources devoted to achieving our business plan; (b) our failure
      to
      implement our business plan within the time period we originally planned to
      accomplish; (c) because we are seeking to merge with an operating business
      which
      has not yet been identified, you will be unable to determine whether we will
      ever become profitable; and (d) other risks that are discussed in this Form
      10-QSB or included in our previous filings with the Securities and Exchange
      Commission.




RESULTS
      OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2007 COMPARED TO THE THREE
      MONTHS ENDED MARCH 31, 2006





The
      following tables set forth key components of our results of operations for
      the
      periods indicated for Benda Pharmaceutical Inc.


**March
                  31 2007**
              
              **March
                  31 2006****(Unaudited)**
              
              **(Unaudited)****Revenue**
              
              $
              3,029,035
              
              $
              3,656,776Cost
                  of Goods Sold
              
              
              (1,808,902
              )
              
              (1,887,517
              )**Gross
                  Profit**
              
              
              1,220,133
              
              
              1,769,259**Selling
                  Expenses**
              
              
              (88,183
              )
              
              (140,208
              )**General
                  and administravive**
              
              
              (646,475
              )
              
              (441,872
              )**Research
                  and development**
              
              
              -
              
              
              -**Total
                  operating expenses**
              
              
              (734,658
              )
              
              (582,080
              )**Operating
                  Income**
              
              
              485,475
              
              
              1,187,179Interest
                  expenses
              
              
              (17,585
              )
              
              (40,218
              )Other
                  income (expenses)
              
              
              (11,088
              )
              
              (246,770
              )**Income
                  before minority interest and income taxes**
              
              
              456,802
              
              
              900,191Income
                  taxes
              
              
              -
              
              
              -Minority
                  interest
              
              
              (40,765
              )
              
              (51,504
              )**Net
                  Income**
              
              $
              416,037
              
              $
              848,687**Earnings
                  per share - basic**
              
              $
              0.00
              
              $
              0.01**Weighted
                  average shares outstanding - basic**
              
              
              96,281,951
              
              
              64,942,360**Earnings
                  per share - diluted**
              
              $
              0.00
              
              $
              0.01**Weighted
                  average shares outstanding - diluted**
              
              
              124,099,914
              
              
              64,942,360




*Net
      Revenue:*




Net
      revenue decreased $627,741, or 17%, from $3,656,776 in the quarter ended March
      31, 2006 to $3,029,035 in the quarter ended March 31, 2007. The major reasons
      of
      the changes are stated as follows:





1.
            Jiangling
                Benda, which has been temporarily closed for plant overhaul in preparation
                for GMP certification. The Jiangling Benda plant is expected to resume
                production in August 2007. The first floor of Benda Ebei’s plant is
                allocated for the production of injection vials. We are in the process
                of
                expanding the second floor of Benda’s Ebei’s plant, which will be
                dedicated to the production of branded new drugs in pill, grain and
                capsule form. Production of these items is expected to start in July
                2007
                and boost 2007 net revenue
                significantly.




16




2.
            On
                January 10, 2007, Yidu Benda received a government order issued by
                the
                local government, it has to be shut down since the mid of January
                2007 for
                improvement of our waste water treatment systems. The order requires
                us to
                finish the improvement and be compliant by June 30, 2007. Due to
                this
                fact, the net revenue was dropped by $583,831 or 46%. We expect our
                Yidu
                Benda plant to resume production by July 1, 2007. Before the resumption
                of
                its production, the Company is now moving the production from Yidu
                Benda
                to Jiangling Benda so as to minimize the negative impact on
                sales.





The
      rise
      and fall in our product sales in the quarter ended March 31, 2007 and 2006
      by
      subsidiary and by category were as follows:


Subsidiary
              
              Product
                  Category
              
              March
                  31, 2007
              
              March
                  31, 2006
              
              Increase
                  /
                  (Decrease)
                    %Unaudited
              
              
              UnauditedBenda
                  Ebei
              
              
              Medicines/injection
                  vials
              
              
              2,339,463
              
              
              2,373,076
              
              
              -1
              %Jiangling
                  Benda
              
              
              Active
                  Pharmaceutical Ingredients
              
              
              -
              
              
              15,404
              
              
              -100
              %Yidu
                  Benda
              
              
              Bulk
                  Chemicals
              
              
              684,465
              
              
              1,268,296
              
              
              -46
              %Beijing
                  Shusai
              
              
              Pharynigitis
                  Killer therapy
              
              
              5,107
              
              
              -
              
              
              NATotal
              
              
              
              
              
              3,029,035
              
              
              3,656,776
              
              
              -17
              %


*Source:
        Company*




*Cost
      of Revenue*




Cost
      of
      revenue decreased $78,615, or 4% from $1,887,517 in the quarter ended March
      31,
      2006 to $1,808,902 in the quarter ended March 2007. This was primarily because
      of the reduction in cost of materials for production. For instance, in the
      year
      of 2006, we start co-operate with Sanxia University, College of Chemistry and
      Life Science for the production of L-methionine and the cost of such material
      has been reduced thereto.





*Gross
      Profit*




Gross
      Profit decreased $549,126, or 31% from $1,769,259 in the quarter ended March
      31,
      2006 to $1,220,133 in the quarter ended March 2007 mainly due to the decrease
      in
      net revenue.




*Selling
      Expenses:*




Selling
      expenses decreased $52,025, or 37% from $140,208 in the quarter ended March
      31,
      2006 to $88,183 in the quarter ended March 2007, primarily due to lower
      distribution costs.





*General
      and Administrative Expenses:*




General
      and administrative expenses increased $204,603 or 46% from $441,872 in the
      quarter ended March 31, 2006 to $646,475 in the quarter ended March 2007. The
      increase of these expenses were primarily due to (i) $120,000 was being
      compensated to investors for the late filing of 10K; (ii) $35,930 was spent
      for
      investor relations and filing fees; (iii) $35,095 was spent for the legal fees.
      The items (ii) and (iii) were only incurred after the Company listed in public
      since November 15, 2006.





*Income
      from Operations:*




Operating
      income decreased $701,704, or 59% from $1,187,179 in the quarter ended March
      31,
      2006 to $485,475 in the quarter ended March 2007, was mainly due to the dropped
      of net revenue caused by the ceased of Yidu Benda’s production and the increase
      of the expenses of general and administrative. However, if we add back those
      additional expenses incurred in general and administrative, the operating income
      of quarter ended March 2007 would be approximately $676,600 approximately
      $510,679 or 43% lower than the quarter ended March 31, 2006.





*Interests
      Expenses:*




Interest
      expenses decrea sed
      $22,633, or 56% from $40,218 in the quarter ended March 31, 2006 to $17,585
      in
      the quarter ended March 31, 2007. This was primarily due to the fact the
      short-term was fully repaid in the period of the first quarter of
      2007





*Income
      Taxes:*




Benda
      is
      subject to Delaware, United State of America tax, but no provision for income
      taxes were made for the quarter ended March 31, 2007 and 2006 as Benda did
      not
      have reportable taxable income for the periods.


17
  Ever
        Leader, a wholly owned subsidiary of Benda, is subject to Hong Kong tax,
        but no
        provisions for income taxes were made for the quarter ended March 31, 2007
        and
        2006 as Ever Leader did not have reportable taxable income for the periods.





Benda
      Ebei was registered as a Sino-Foreign Equity Joint Venture and is subject to
      the
      tax laws applicable to Sino-Foreign Equity Joint Ventures in the PRC. Benda
      Ebei
      is fully exempt from PRC enterprise income tax for two years starting from
      the
      first profit-making year, followed by a 50% reduction in income taxes for the
      following three years, commencing from the first profitable year.





Jiangling
      Benda and Yidu Benda are cross-municipal investment entities and enjoy the
      same
      tax treatment as Sino-Foreign Joint Ventures and were therefore exempt from
      PRC
      enterprise income tax for two years starting from the first profit-making year,
      followed by a 50% reduction in income taxes for the following three years,
      commencing from the first profitable year. Cross-municipal investments entities
      refer to entities that are incorporated in one municipal region but have
      investments in another municipal region.





Beijing
      Shusai did not have taxable income for the quarter ended March 31,
      2007.





The
      Company expects that some of these exemption periods will expire in November
      2007, after which Benda Ebei, Jiangling Benda and Yidu Benda can be expected
      to
      an average 16.5% tax rate. The remaining tax holidays will expire on November
      2010, thereafter these operating companies will be subject to the regular 33%
      tax rate on corporate profits. The Company is in the process of obtaining the
      approval from the relevant government authorities for the tax exemption status
      as a Sino-Foreign Equity Joint Venture from November 2005.





As
      a
      result of the above tax exemptions, there was no income taxes payable for the
      Company for the quarter ended March 2007 and 2006. Had these tax exemptions
      not
      been available to the Company, income tax expense would have increased by
      approximately $250,800 and $424,593 for the quarter ended March 31, 2007 and
      2006, respectively.





*Net
      Income:*




Net
      income was $416,037 in the quarter ended March 2007, compared to $848,687 in
      the
      quarter ended March 2006, a decrease of $432,650, or 51%, was mainly due to
      the
      dropped of net revenue caused by the ceased of Yidu Benda’s production and the
      increase of the expenses of general and administrative.




*Minority
      Interests:*




Minority
      interest accounted for 5% of net profit after income taxes of Benda Ebei,
      Jiangling Benda and Yidu Benda, and 25% of net profit after incomes taxes of
      Beijing Shusai for the quarter ended March 31, 2007 and 2006.





LIQUIDITY
      AND CAPITAL RESOURCES




Net
      cash
      provided by operating activities was negative $212,523 in the quarter ended
      March 2007, compared to $1,678,791 in the quarter ended March 31, 2005, a
      decrease of $1,894,114 or 113%. This was primarily due to an increase in working
      capital needs resulting from increased accounts receivable by $975,902 and
      decreased account payable and accrued liabilities by $763,715.





Net
      cash
      used in investing activities was $267,585 in the quarter ended March 31, 2007
      compared to $1,292,497 in the quarter ended March 31, 2006, a decrease of
      $1,024,912 or 79%. This was mainly due to the fact that: (i) the Company
      purchase a technology formula which was know as Yanlong Anti-Cancer Oral Liquid;
      and (ii) payment for the Jiangling Benda overhaul in preparation for GMP
      certification, in the quarter ended March 31, 2006.





18




Net
      cash
      used in investing activities was $5,340,950 in the quarter ended March 31,
      2007
      compared to negative $212,839 in the quarter ended March 31, 2006, an increase
      of $5,553,789 or 2,609%. This was primarily due to the financing performed
      in
      the quarter ended March 31, 2007.





In
      order
      to finance the acquisition of a majority of the shares of Shenzhen SiBiono
      GeneTech Co., Ltd. (“SiBiono”), on April 5, 2007, we entered into an Investment
      Agreement with certain accredited and institutional investors (“Investors”) who
      had also participated in the subscription for $12,000,000 of our common stock
      pursuant to certain Securities Purchase Agreements dated November 15, 2006
      (“November Financing”). Pursuant to the Investment Agreement, the Investors
      purchased a total of 252 Units for $7,560,000 with each Unit consisting of
      (i) a
      convertible promissory note in the principal amount of Thirty Thousand Dollars
      ($30,000) which shall be convertible into 54,087 shares of the Company's common
      stock, par value $0.001 per share, and (ii) a warrant to acquire 54,087
      shares of Common Stock at an exercise price of $0.555 per share. The Notes
      shall
      bear an interest rate of four percent per annum until the Buyer elects to
      exercise the right to convert, and shall mature on March 28, 2009.





The
      securities underlying the Notes and Warrants issued to the Investors pursuant
      to
      the terms of the Investment Agreement shall be subject to the terms of the
      Make
      Good Agreement entered into in connection with the November Financing (the
“Make
      Good Agreement”). The Company further represented to the Investors that the
      targeted net income of the Company for fiscal year end 2007 (“FY07 Net Income”)
      will be greater than or equal to $10.0 million (adjusted for any non-cash
      charges associated with this Agreement and the SPA) (the "Performance
      Threshold"). In the event the Performance Threshold is not attained, then we
      shall promptly issue, or cause to be issued to the Investors or their designee,
      a pro rata portion of One Million (1,000,000) shares of Common Stock for every
      one (1) cent by which the Company’s earnings per share, determined on a fully
      diluted basis (“Earnings Per Share”) is less than $0.065.





As
      of
      March 31, 2007, an amount of $5,520,000 had been received which represented
      184
      units were subscripted by the investors.




**Critical
      Accounting Policies**





Accounting
      policies discussed in this section are those that we consider to be most
      critical to an understanding of our financial statements because they inherently
      involve significant judgment and uncertainties.  For all of these
      estimates, we caution that future events rarely develop exactly as forecast,
      and
      the best estimates routinely require adjustment. Also see note 2, Summary of
      Significant Accounting Policies.





**Revenue
      Recognition**




The
      Company recognizes revenue when the significant risks and rewards of ownership
      have been transferred pursuant to PRC law, including such factors as when
      persuasive evidence of an arrangement exists, delivery has occurred, the sales
      price is fixed or determinable, sales and value-added tax laws have been
      complied with, and collectibility is reasonably assured. The Company generally
      recognizes revenue when its products are shipped.




**Accounts
      Receivable**




Accounts
      receivable are carried at original invoice amount less an estimate made for
      doubtful accounts based on a review of all outstanding amounts on a monthly
      basis. Management judgment and estimates are made in connection with
      establishing the allowance for doubtful accounts. Specifically, we analyze
      the
      aging of accounts receivable balances, historical bad debts, customer
      concentrations, customer credit-worthiness, current economic trends and changes
      in our customer payment terms. Significant changes in customer concentration
      or
      payment terms, deterioration of customer credit-worthiness or weakening in
      economic trends could have a significant impact on the collectibility of
      receivables and our operating results. If the financial condition of our
      customers were to deteriorate, resulting in an impairment of their ability
      to
      make payments, additional allowances may be required.




19




**Inventories**




Inventories,
      which are primarily comprised of raw materials, packaging materials, and
      finished goods, are stated at the lower of cost or net realizable value, using
      the first-in, first-out (“FIFO”) method. Cost being determined on the basis of a
      moving average. The Company evaluates the need for reserves associated with
      obsolete, slow-moving and non-salable inventory by reviewing net realizable
      values on a periodic basis.




**Recent
      Accounting Pronouncements**




In
      July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an
      Interpretation of FASB Statement *No. 109* (“FIN
      48”), which clarifies the accounting for uncertainty in income taxes recognized
      in an enterprise's financial statements. FIN 48 prescribes a two-step process
      to
      determine the amount of tax benefit to be recognized. First, the tax position
      must be evaluated to determine the likelihood that it will be sustained upon
      examination. If the tax position is deemed "more-likely-than-not" to be
      sustained, the tax position is then valued to determine the amount of benefit
      to
      be recognized in the financial statements. FIN 48 will be effective as of the
      beginning of the Company’s 2007 fiscal year. The Company is currently evaluating
      the impact that adopting FIN 48 will have on its financial statements.





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      ("SFAS") No. 157, "Fair Value Measurements", which establishes a framework
      for
      reporting fair value and expands disclosures about fair value measurements.
      SFAS
      No. 157 is effective for financial statements issued for fiscal years beginning
      after November 15, 2007 and interim periods within those fiscal years. The
      Company is currently assessing the impact of the adoption of this standard
      on
      its financial statements.




In
      September 2006, FASB issued SFAS No. 158,"Employers' Accounting for Defined
      Benefit Pension and Other Postretirement Plans-An amendment of SFAS No. 87,
      88,
      106, and 132(R). This Statement improves financial reporting by requiring an
      employer to recognize the overfunded or underfunded status of a defined benefit
      postretirement plan (other than a multiemployer plan) as an asset or liability
      in its statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a
      business entity or changes in unrestricted net assets of a not-for-profit
      organization. This Statement also improves financial reporting by requiring
      an
      employer to measure the funded status of a plan as of the date of its year-end
      statement of financial position, with limited exceptions. An employer with
      publicly traded equity securities is required to initially recognize the funded
      status of a defined benefit postretirement plan and to provide the required
      disclosures as of the end of the fiscal year ending after December 15, 2006
      with
      earlier application allowed. The Company does not expect the adoption of SFAS
      No. 158 to have a material impact on its consolidated result of operations
      and
      financial condition.





20





**Item
      3. Controls and Procedures**




Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and principal financial officer, we conducted an
      evaluation of our disclosure controls and procedures, as such term is defined
      under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
      Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2007. Based
      on
      this evaluation, our principal executive officer and principal financial officer
      have concluded that our disclosure controls and procedures are effective to
      ensure that information required to be disclosed by us in the reports we file
      or
      submit under the Exchange Act is recorded, processed, summarized, and reported
      within the time periods specified in the Securities and Exchange Commission’s
      rules and forms and that our disclosure and controls are designed to ensure
      that
      information required to be disclosed by us in the reports that we file or submit
      under the Exchange Act is accumulated and communicated to our management,
      including our principal executive officer and principal financial officer,
      or
      persons performing similar functions, as appropriate to allow timely decisions
      regarding required disclosure.




There
      were no changes (including corrective actions with regard to significant
      deficiencies or material weaknesses) in our internal controls over financial
      reporting that occurred during the first quarter of fiscal 2007 that has
      materially affected, or is reasonably likely to materially affect, our internal
      control over financial reporting.




21




**PART
      II - OTHER INFORMATION**




**Item
      1. Legal Proceedings.**




The
      Company is currently not a party to any pending legal proceedings and no such
      action by, or to the best of its knowledge, against the Company has been
      threatened.




**Item
      2. Changes in Securities.**




Pursuant
      to certain Investment Agreements, on April 5, 2007, we issued to the Buyers
      a
      total of 247 Units for $7,410,000 with each Unit consisting of (1) a convertible
      promissory note (the “Note”) in the principal amount of Thirty Thousand Dollars
      ($30,000) which shall be convertible into 54,087 shares of the Company's common
      stock, par value $0.001 per share, and (ii) a warrant to acquire 54,087
      shares of Common Stock at an exercise price of $0.555 per share. Such securities
      were not registered under the Securities Act of 1933. The issuance of these
      securities was exempt from registration under Regulation D and Section 4(2)
      of the Securities Act. We made this determination based on the representations
      of Buyers, which included, in pertinent part, that such shareholders were either
      (a) "accredited investors" within the meaning of Rule 501 of Regulation D
      promulgated under the Securities Act, or (b) not a "U.S. person" as that term
      is
      defined in Rule 902(k) of Regulation S under the Act, and that such shareholders
      were acquiring our common stock, for investment purposes for their own
      respective accounts and not as nominees or agents, and not with a view to the
      resale or distribution thereof, and that Benda understood that the shares of
      our
      common stock may not be sold or otherwise disposed of without registration
      under
      the Securities Act or an applicable exemption therefrom.




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




None




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




No
      matter
      was submitted during the quarter ending March 31, 2007, covered by this report
      to a vote of the Company’s shareholders, through the solicitation of proxies or
      otherwise.




22




**Item
      5. Other Information.**




None




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





(a)    Exhibits





31.1
      Certification pursuant to Section 302 of Sarbanes Oxley Act of
      2002





32.1
      Certification pursuant to Section 906 of Sarbanes Oxley Act of
      2002





(b)   Reports
      of Form 8-K





On
      January 11, 2007, in its Current Report on Form 8-K dated January 9, 2007,
      the
      Company reported the change of its certifying accountants.





On
      February 14, 2007, in its Current Report on Form 8-K dated February 9, 2007,
      the
      Company reported the appointment of a Chief Financial Officer and an Amendment
      to the Bylaws changing the fiscal year end.





On
      March
      1, 2007, in its Current Report on Form 8-K dated February 8, 2007, the Company
      reported the dismissal of its certifying accountants.





On
      March
      13, 2007, in its Current Report on Form 8-K dated March 7 2007, the Company
      reported the appointment of its new certifying accountants.





On
      March
      26, 2007, in its Current Report on Form 8-K dated March 20, 2007, the Company
      reported a change in directors.





On
      March
      27, 2007, in its Current Report on Form 8-K dated March 27, 2007, the Company
      reported it had entered into negotiations for the acquisition of a PRC
      company.





23




**SIGNATURES**




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




**BENDA
                PHARMACEUTICAL, INC.**RegistrantDate:
                May 21, 2007
            By:*/s/
                Yiqing Wan*Yiqing
                WanPresident,
                Chief Executive OfficerChairman
                of Board of Directors




24