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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-K /A

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

For the Fiscal Year Ended May 31, 2008 OR

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

Commission file number 333-127016

CHINA HEALTH CARE
CORPORATION(Exact name of registrant as specified in its
charter)

|Wyoming                                          | 98-0463119                          
|------------------------------------------------ | ------------------------------------
|(State or other Jurisdiction of Incorporation or | (I.R.S. Employer Identification No.)
|Organization)                                    |                                     
|                                                 |                                     
|T Plaza
      Center, Suite 400,                 |                                     
|15950
      North DallasParkway, Dallas          | TX
      75249                      
|(Address of Principal Executive Offices)         | (zip code)                          

Registrant's telephone number, including area code: (972)
  361-8033

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

|Title of Each Class | Name of Each Exchange On Which
      Registered
|------------------- | -----------------------------------------------
|N/A                 | N/A                                            

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $0.001

Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 the
Securities Act. Yes[ ] No[x]

Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act. Yes[ ] No[x]

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

Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405
of this chapter) is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive

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proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See definition of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer [ ] | Accelerated filer [ ] | Non-accelerated filer [ ] | Smaller reporting company [x]
|--------------------------- | --------------------- | ------------------------- | -----------------------------

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes[ ] No[x]

The aggregate market value of
Common Stock held by non-affiliates of the Registrant on August 28, 2008 was
$18,581,209.40 based on a $0.65 closing price for the Common Stock on August 13,
2008. For purposes of this computation, all executive officers and directors
have been deemed to be affiliates. Such determination should not be deemed to be
an admission that such executive officers and directors are, in fact, affiliates
of the Registrant.

Indicate the number of shares outstanding of each of the
registrants classes of common stock as of the latest practicable date.

50,148,000 Shares as of August 28, 2008

DOCUMENTS INCORPORATED BY REFERENCE

None.

2

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TABLE OF CONTENTS

|            |                                                                                                                          | Page
|----------- | ------------------------------------------------------------------------------------------------------------------------ | ----
|            |                                                                                                                          |     
|Item 1.     | Business                                                                                                                 | 4   
|            |                                                                                                                          |     
|Item 2.     | Properties                                                                                                               | 17  
|            |                                                                                                                          |     
|Item 3.     | Legal Proceedings                                                                                                        | 18  
|            |                                                                                                                          |     
|Item 4.     | Submission of
      Matters to a Vote of Security Holders                                                                | 18  
|            |                                                                                                                          |     
|Item 5.     | Market for Registrants
      Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities | 19  
|            |                                                                                                                          |     
|Item 6.     | Selected Financial
      Data                                                                                            | 19  
|            |                                                                                                                          |     
|Item 7.     | Managements
      Discussion and Analysis of Financial Condition and Results of Operations                              | 19  
|            |                                                                                                                          |     
|Item 7A.    | Quantitative
      and Qualitative Disclosure of Market Risk                                                             | 25  
|            |                                                                                                                          |     
|Item 8.     | Financial Statements
      and Supplementary Data                                                                        | 25  
|            |                                                                                                                          |     
|Item 9.     | Changes in and
      Disagreements With Accountants on Accounting and Financial Disclosure                               | 27  
|            |                                                                                                                          |     
|Item 9A(T). | Controls and
      Procedures                                                                                            | 27  
|            |                                                                                                                          |     
|Item 9B.    | Other Information                                                                                                        | 28  
|            |                                                                                                                          |     
|Item 10.    | Directors, Executive
      Officers and Corporate Governance                                                             | 28  
|            |                                                                                                                          |     
|Item 11.    | Executive Compensation                                                                                                   | 32  
|            |                                                                                                                          |     
|Item 12.    | Security Ownership
      of Certain Beneficial Owners and Management and Related Stockholder Matters                     | 35  
|            |                                                                                                                          |     
|Item 13.    | Certain Relationships
      and Related Transactions, and Director Independence                                          | 36  
|            |                                                                                                                          |     
|Item 14.    | Principal Accountant
      Fees and Services                                                                             | 37  
|            |                                                                                                                          |     
|Item 15.    | Exhibits, Financial
      Statements and Schedules                                                                       | 38  

3

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PART I

Item 1. Business

Corporate Overview

The address
  of our principal executive office is T Plaza Center, Suite 400, 15950 North
  Dallas Parkway, Dallas. Our telephone number is (972) 361-8033.

Our common shares became listed on the OTC Bulletin Board on
March 22, 2007, under the symbol CVLG. Prior to this date, there was no public
market for our common shares.

On May 13, 2008, the Secretary of State of Wyoming effected a
change of name of our company from The Cavalier Group to China Health Care
Corporation, as approved by our shareholders. The name change became effective
with the Over-the-Counter Bulletin Board at the opening for trading on May 16,
2008 under the new stock symbol CNHL.

Corporate History

We were incorporated in the state of Wyoming on February 11,
2005. Since our incorporation, we had been in the business of the exploration
and development of a mineral property approximately 1,320 acres in size in
northeastern, Ontario. Our property was without known reserves and our program
was exploratory in nature. Because we were not successful in implementing our
business plan, we abandoned it and focused on the identification of suitable
businesses with which to enter into a business opportunity or business
combination.

On January 20, 2008, we entered into a share exchange agreement
with United Premier Medical Group Limited, a Cayman corporation, and the
shareholders of United Premier Medical Group Limited. The share exchange
agreement contemplated our company acquiring all of the issued and outstanding
common shares in the capital of United Premier Medical Group Limited in exchange
for the issuance by our company of 42,658,000 shares of our common stock. As of
the closing date of July 24, 2008, the former shareholders of United Premier
Medical Group Limited held approximately 85.1% of the issued and outstanding
common shares of our company.

On January 20, 2008, we entered into a share exchange agreement
with United Premier Medical Group Limited, a Cayman corporation, and the
shareholders of United Premier Medical Group Limited. The closing of the
transactions contemplated in the share exchange agreement and the acquisition of
all of the issued and outstanding common shares in the capital of United Premier
Medical Group Limited occurred on July 24, 2008. In accordance with the closing
of the share exchange agreement, we issued 42,658,000 shares of our common stock
to the former shareholders of United Premier Medical Group Limited in exchange
for the acquisition, by our company, of all of the 21,329 issued and outstanding
shares of United Premier Medical Group Limited on the basis of 2,000 common
shares of our company for every one common share of United Premier Medical Group
Limited.

Business Subsequent to the Acquisition of United Premier
Medical Group Limited

As of the closing date of the share exchange agreement on July
24, 2008, we commenced the business of providing premium specialty medical
services in the Peoples Republic of China (PRC), with a prime focus on the
provision of services to women and children. Specifically, we provide
consultancy services to the VIP Maternity & Gynecological Centers (the VIP
Birthing Centers) in the PRC. Our first VIP Birthing Center was operated in
October 2002 at the International Peace Maternity & Child Health Hospital,
supported by the consultation services of Johns Hopkins International, LLC.
(JHI). JHI is a leader in patient care, medical research, teaching and
training in the United States.

Over the past several years, we have signed co-operative
agreements with a number of well respected hospitals in Obstetrics /Gynecology
(OB/GYN) across the major PRC cities including Beijing, Shanghai, Guangzhou,
Foshan, Wuxi, Xiamen, Changsha and Hangzhou. In 2006, we signed a management
agreement with the University Hospital at Macau University of Science and
Technology (UH-MUST). We currently have contracts to provide

4

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consultancy services to a total of five VIP Birthing Centers in
the PRC and to manage a private hospital in Macau. In the future, we intend to
seek direct ownership of hospitals and clinics.

We have adopted a tri-partite approach of medical consultancy,
hospital management and specialty hospital joint ventures in the PRC. We plan to
develop a chain of specialized healthcare operations on a nation-wide scale
across the PRC. Our target markets are affluent PRC cities and regions, such as
the Changjiang River Delta, the Pearl River Delta and the Huabei region.

We have a distinct business model to achieve our business
objectives through partnering with western medical institutes and local
hospitals in the PRC. We can utilize our partners' hospital buildings, medical
facilities and equipment in the PRC while employing medical technology and
know-how from the United States of America. This business model can minimize
risk and facilitate business access into the Chinese market. We plan to
cooperate with the specialty units of carefully selected hospitals and to place
an emphasis on western trained local medical professionals.

We currently use the name of JHI in two of our VIP Birthing
centers including the ones in Wuxi and Xiamen . We keep negotiating co-operation
agreements with a number of hospital management organizations in the United
States, in order to sustain our competitiveness in providing premium education
and consultation services for our VIP birthing centers, satellite health centers
and specialty hospitals.

Since 2002, we have established a reputable chain of
hotel-style VIP Maternity & GYN Centers, delivering premium OB/GYN services
primarily targeting the affluent middle and upper classes in China. Our services
emphasize quality, safety and privacy, and are well supported by consultation
services of qualified western standards, typically from the United States. Our
past and present agreements with hospitals wherein we provided premium specialty
medical services are as follows:

|Location  | Business                   | Affiliation      | Commencement    | Number of Beds
|--------- | -------------------------- | ---------------- | --------------- | --------------
|Shanghai  | VIP Maternity & GYN Center | Public Hospital  | Oct-02 / Jan-05 | 11/25         
|Guangzhou | VIP Maternity & GYN Center | Public Hospital  | Mar-04          | 11            
|Wuxi      | VIP Maternity & GYN Center | Public Hospital  | Jan-05          | 11            
|Changsha  | VIP Maternity & GYN Center | Public Hospital  | May-05          | 12            
|Foshan    | VIP Maternity & GYN Center | Public Hospital  | Aug-05          | 15            
|Xiamen    | VIP Maternity & GYN Center | Public Hospital  | Jan-06          | 12            
|Macau     | Hospital Management        | Private Hospital | Jun-06          | 60            
|Hangzhou  | VIP Maternity & GYN Center | Private Hospital | Nov-06          | 15            

We currently have contracts to provide consultancy services to
a total of five VIP Birthing Centers in the PRC and to manage a private hospital
in Macau. These centers are located in Wuxi (the Wuxi Center), Xiamen (the
Xiamen Center), Changsha (the Changsha Center), Foshan (the Foshan Center)
and Hangzhou (the Hangzhou Center). For the Wuxi Center, Xiamen Center and the
hospital in Macau, they are operated under our service contract and regularly
paying us a monthly service fee. For the Changsha Center, it is still under our
service contract but the host hospital of this center has stopped paying us
since June 2007 while still using the JHI brand name. We have engaged a law firm
in the PRC to negotiate with the host hospital for a settlement for the sake of
not taking any legal action. For the Foshan Center, it is still operated under
our service contract but the host hospital has stopped paying us since October
2006 and no longer used the JHI brand name. We engaged a law firm in the PRC to
negotiate with the host hospital for a settlement for the sake of not taking any
legal action. For the Hangzhou Center, though our service contract is still
valid, we have not been paid since the commencement of its operation. We are
identifying a law firm in the PRC to negotiate with its host hospital for a
possible settlement.

5

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The center in Guangzhou (the Guangzhou Center) ceased its
operation in March 2007 and our invested assets were sold back to its host
hospital. The net receipt of this asset sale amounted to $968,000. For the VIP
Birthing Center in Shanghai (the Shanghai Center), we have not been paid since
January 2006 and we have taken legal action against the host hospital for breach
of contract. The case was accepted by and filed in the Shanghai No.1
Intermediate Peoples Court in the PRC on April 10, 2007. Our proposed claim is
about $2,900,000 (equivalent to Renminbi (RMB)22,600,000).

During the period from June 15, 2002 to June 10, 2004,
Proactive Medical Enterprise (Hong Kong) Ltd. ('PME-HK"), one of our
subsidiaries, entered into a number of agreements with JHI, including an
educational and consulting services agreement, a licensing agreement, two
novation and assignment agreements for the licensing agreement dated June 15,
2002 and two amendment agreements to the licensing agreement and one amendment
agreement to the educational and consulting service agreement dated June 15,
2002. Pursuant to these agreements, JHI provides PME-HK certain educational and
consulting services related to obstetrics and gynecology primarily through the
Department of Obstetrics and Gynecology of The Johns Hopkins Hospital (the
"Department") in enhancing the quality of services delivered to our VIP Birthing
Centers in China. PME-HK is permitted to have limited use of the names of JHI
and of the Department (herein collectively called the Mark) and is allowed to
disclose that its service has consulted with JHI and / or the Department in
connection with the establishment of specific clinical programs.

On April 11, 2003, PME-HK, JHI and Proactive Medicare
Enterprise, Inc. (PMEI) entered into an agreement of novation and assignment
for education and consulting services (the JHI Assignment Agreement). PMEI is
an entity related to the Company in that PMEI was formed and owned by Herbert
Wong a brother of Wong Yao Wing, a director of UPMG. Herbert Wong died in June
2006. PMEI was subsequently dissolved in November 2007 (See Note 5). Pursuant to
the JHI Assignment Agreement, PME-HK assigned to PMEI all the rights, benefits
and obligations of PME-HK under the JHI Consulting Agreements. On April 11,
2003, PME-HK and PMEI entered into a services agreement (the Service
Agreement) to re-establish the terms between the parties regarding the
consultation services from PMEI to PME-HK in International Peace Maternity &
Child Health Hospital. On March 28, 2004, PME-HK and PMEI entered into a project
consultancy agreement (the Consultancy Agreement) to supersede the Service
Agreement. In the Consultancy Agreement, PME-HK appoints PMEI as project
consultant to provide services related to establishment, management and
development of healthcare services in the PRC.

We are currently in dispute with JHI mainly on the fee
structure, outstanding fee owing to JHI and use of JHI brand in future, and we
are actively negotiating with JHI for settlement. As indicated in an email from
JHI dated April 22, 2008, the Company believes that JHI is willing to give
limited support dependent on JHIs receiving advance payment for any services
requested. The Company also believes that JHI is willing to proceed with
settlement negotiations with the Company as long as the Company is willing to
pay an amount of $300,000. Given the positive attitude of JHI shown to the
Company, the Company believes the negotiation outcome would be positive and
constructive.

Corporate History of United Premier Medical Group Limited
and Corporate Structure

The United Premier Medical Group (the Group) was founded in
2001 with United Premier Medical Group Limited (UPMG) as the ultimate holding
company. UPMG was incorporated as a Cayman corporation on March 28, 2003 and
directly wholly owns UPMG International Limited (UPMGI), a British Virgin
Islands corporation, which in turn holds a number of subsidiaries in the PRC,
Hong Kong and Macau.

6

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The following is a table which describes corporate structure of
United Premier Medical Group:



|No. | Company Code | Company Name                                      | **Place of** 
        **Incorporation** | Nature of Business                                                                                                 
|--- | ------------ | ------------------------------------------------- | --------------------------------------- | -------------------------------------------------------------------------------------------------------------------
|1   | UPMG         | United Premier Medical Group Limited              | Cayman Islands                          | Serves as the ultimate holding company of the
      Group                                                          
|2   | UPMGI        | UPMG International Limited                        | British Virgin Islands                  | Serves as an investment holding company holding all
      subsidiaries of the Group in the PRC, Hong Kong and Macau
|3   | PME-HK       | Proactive Medicare Enterprise (Hong Kong) Limited | Hong Kong                               | Holding our business operations in Hong Kong and being a
      cost center of the Group                            
|4   | PME-SZ       | Proactive Medicare (Shenzhen) Company Limited     | Hong Kong                               | A dormant company at the moment                                                                                    
|5   | PME-CS       | Proactive Medicare (Changsha) Company Limited     | Hong Kong                               | Serves as a vehicle for signing the service agreement of
      the VIP birthing center in Changsha, the PRC        
|6   | PME-XIA      | Proactive Medicare (Xiamen) Company Limited       | Hong Kong                               | Serves as vehicle for signing the service agreement of the
      VIP birthing center in Xiamen, the PRC            
|7   | PME-NAN      | Proactive Medicare (Nanjing) Company Limited      | Hong Kong                               | A dormant company at the moment                                                                                    

7

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|No. | Company Code | Company Name                                                      | Place of Incorporation | Nature of Business                                                                                                                                                                               
|--- | ------------ | ----------------------------------------------------------------- | ---------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8   | PME-HZ       | Proactive Medicare (Hangzhou) Company Limited                     | Hong Kong              | Serves as a vehicle for signing the service
      agreement of the VIP birthing center in Hangzhou, the PRC                                                                                      
|9   | PME-WX       | Proactive Medicare (Wuxi) Company Limited                         | Hong Kong              | Serves as vehicle for signing the service agreement of the
      VIP birthing center in Wuxi, the PRC                                                                                            
|10  | UPMG- SHA    | United Premier Medical Group (Shanghai) Limited                   | Hong Kong              | A dormant company at the moment                                                                                                                                                                  
|11  | PMS-HK       | Proactive Medicare Services (Hong Kong) Limited                   | Hong Kong              | Serves as a vehicle for signing the service agreement of
      the VIP birthing center in Foshan, the PRC                                                                                        
|12  | PME-BJ       | Proactive Medicare (Beijing) Company Limited                      | Hong Kong              | A dormant company at the moment                                                                                                                                                                  
|13  | UPMG-HK      | UPMG (Hong Kong) Limited                                          | British Virgin Islands | A dormant company at the moment                                                                                                                                                                  
|14  | UPMG-US      | UPMG (US) Limited                                                 | British Virgin Islands | Serves as a vehicle for signing the management service
      agreement of University Hospital at Macau University of Science &
      Technology in Macau, the PRC                                
|15  | HB-GZ        | Guangzhou Inno- Proactive Medicare Consultancy Limited            | PRC                    | Holding some of our general, administrative and finance
      operations in the PRC                                                                                                              
|16  | BK-SH        | Shanghai Proactive Medicare Health Education Center
      Limited | PRC                    | Previously served for holding the operation of the VIP
      birthing center at International Peace Maternity & Child Health
      Hospital in Shanghai, the PRC but has been dormant for 2 years
|17  | UBK-SZ       | UPMG (Shenzhen) Limited                                           | PRC                    | Holding some of our general, administrative and finance
      operations in the PRC                                                                                                              
|18  | UPMG-MU      | UPMG (Macau) Company Limited                                      | Macau                  | Holding the operation of providing management services to
      the University Hospital at Macau University of Science & Technology in
      Macau, the PRC                                      
|19  | PHL          | Pro-Innovative Holdings Limited                                   | British Virgin Islands | Serve as an investment holding company. Dormant at the
      moment                                                                                                                              
|20  | PML          | Pro-Innovative Medical Limited                                    | Hong Kong              | A dormant company at the moment                                                                                                                                                                  

8

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|No. | Company Code | Company Name                           | Place of Incorporation | Nature of Business                                                
|--- | ------------ | -------------------------------------- | ---------------------- | ------------------------------------------------------------------
|21  | Ideamart     | Ideamart Holdings Limited              | British Virgin Islands | A dormant company at the moment                                   
|22  | UPMGIG       | UPMG International (Guangdong) Limited | British Virgin Islands | Serve as an investment holding company Dormant at the
      moment
|23  | UPMGGC       | UPMG (Guangdong) Company Limited       | Hong Kong              | A dormant company at the moment                                   

The Market *

The healthcare industry in China has been growing rapidly since
its economy took off in 1980s. National healthcare expenditures was found to
increase robustly at 15% in compound annual growth rate (CAGR) from
approximately RMB 215 billion in 1995 to RMB 866 billion in 2005. Per capita
healthcare expenditure, in overall, increased by 2.72 times from RMB177.9 in
1995 to RMB662.3 in 2005, while the per capita growth in urban areas was 1.8
times during the same period.

|Per Capita Healthcare Expenditure (RMB) | 1995  | 2000   | 2003   | 2004   | 2005  
|--------------------------------------- | ----- | ------ | ------ | ------ | ------
|Overall                                 | 177.9 | 361.88 | 509.5  | 583.9  | 662.3 
|Urban                                   | 401.3 | 828.6  | 1108.9 | 1261.9 | 1122.8
|Rural                                   | 112.9 | 209.4  | 274.7  | 301.6  | 318.5 

Source: 2007
  National Health Economics Institute  Report on Health Expenditure in China

The chart below shows the national healthcare expenditures of
  China from 1980 to 2005:



Source: 2007
  Health Statistics  Ministry of Health, P.R. China

Under the past centralized planning system, virtually all
hospitals and healthcare facilities in China were invested, owned and run by
government or state-owned business entities. As of year 2000, there were 16,318
hospitals in the PRC, of which most were built during 1950s and 1990s with
common defects in design and engineering. Major defects are characterized by
incomplete functional layout, little consideration of hospital safety systems,
lack of environmental friendly concept, deficiency in patient-first philosophy
as well as poor installation and use of medical equipment and hospital
management system. Such shortcomings are far too outdated to effectively help
combating emergency medical crisis and safeguard human life.

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Hospital construction market has demonstrated itself a fast
growing sector in China. During 1950 and 2000, China built an average of 270
hospitals per year and about 488 hospitals per year from 2000 to 2006. SARS
directly caused an economic loss of RMB300 billion in China, which was partially
attributed to the poor and outdated design and planning of existing healthcare
facilities, and is believed to be an important contributor to the improved
market growth. Over the past 10 years, the number of hospitals was found to
increase at a CAGR of 2%, from 15,833 hospitals in 1996 to 19,246 hospitals in
2006, of which specialized hospitals increased at a CAGR of 10% from 2,271 in
2003 to 3,022 in 2006. Obstetric & Gynecologic (OB/GYN) hospitals
represented a high growth sub-sector, increasing by 29.5% in CAGR from 81 in
2003 to 176 in 2006 due to the general rise in birth rate and growing health
awareness of women in China.

|Type / Year                            | 1950  | 1980    | 1990    | 1996    | 2000    | 2003    | 2004    | 2005    | 2006   
|-------------------------------------- | ----- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | -------
|General Hospitals                      | 2,692 | 7,859   | 10,424  | 11,696  | 11,872  | 12,599  | 12,900  | 12,982  | 13,120 
|Traditional Chinese Medicine Hospitals | 4     | 678     | 2,080   | 2,405   | 2,591   | 2,518   | 2,611   | 2,620   | 2,665  
|Specialized Hospitals                  | 85    | 694     | 1,362   | 1,473   | 1,543   | 2,271   | 2,492   | 2,682   | 3,022  
|Hospitals in Total                     | 2,803 | 9,902   | 14,377  | 15,833  | 16,318  | 17,764  | 18,393  | 18,703  | 19,246 
|Medical Institutions in Total          | 8,915 | 180,553 | 208,734 | 322,566 | 324,771 | 291,323 | 297,540 | 298,997 | 308,969
|Obstetric & Gynecologic Hospitals      | na    | na      | na      | na      | na      | 81      | 103     | 127     | 176    

Source: Center
  for Health Statistics and Information, Ministry of Health, P.R. China 
  Report on the National Health Services Survey of China, 2006

The medical service market in China is still primitive in the
sense that public medical institutions lack competent manpower, financial
resources, material resources, and generally lag behind in medical technologies.
The situation seems improved a lot as the industry gradually open to the world
after Chinas accession to World Trade Organization (WTO). In 2005, the industry
revenue was estimated at RMB 480 billion with annual growth of over 10%, making
it a lucrative market that has tempted investments from different parts of the
world. Consequently, massive inflow of capital has in turn triggered new changes
in the medical system of the country.

The niche market for high quality, patient-oriented medical
services in China, though remains small at the moment, is found to have
encouraging growth over the past years. It is estimated, so far, about 1% to 2%
of the Chinese population can afford top-end Western medical care. As the
standard of living gradually improves, more people are willing to spend for
quality medical services. According to a survey by China Association of Branding
Strategy (CABS), about 175 million or 13.5% of Chinese consumers can afford a
variety of luxury brands. China, being the worlds largest consumer of high-end
luxury goods, accounted for about 12% of global luxury sales in 2005, already a
dominant contributor of global luxury market when compared with developed
countries like Japan (41%), the United States (17%) and the European countries
(16%). Large hospitals in China are on the move to deliver high quality medical
services so as to meet the increasing demand from affluent middle to upper
classes. Star-class hospital environment, warm and personalized care services,
patient safety and privacy, quality management as well as other indicators of
quality services become the keys to out-compete in this niche market.

Shanghai  the most important economic and financial center in
China, has already incubated a huge population of affluent class. The Changjiang
delta that houses Shanghai, Nanjing, Wuxi, Suzhou, Changzhou, Zhenjiang,
Nantong, Taizhou, Hangzhou and Ningbo, represents one of the most affluent and
populous regions in China, generating great demand for premium medical services
given its high living standard and strong consumption power.

10

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A summary of the medical environment in the Changjiang delta
region is shown as follow:

|City      | Population (Million) | No. of Medical &
      Healthcare Institutions | No. of Public Hospitals | No. of Beds | No. of beds per 1000 people
|--------- | -------------------- | ---------------------------------------------- | ----------------------- | ----------- | ---------------------------
|Shanghai  | 17.42                | na                                             | 500                     | na          | na                         
|Nanjing   | 6.4                  | 1,335                                          | 10                      | 23,059      | 3.60                       
|Wuxi      | 5.5                  | 1,051                                          | 21                      | na          | na                         
|Suzhou    | 3.7                  | 1,354                                          | 71                      | 19,000      | 5.14                       
|Changzhou | 2.08                 | 769                                            | 15                      | 11,393      | 5.48                       
|Zhenjiang | 2.9                  | 790                                            | 32                      | 7,889       | 2.72                       
|Nantong   | 7.8                  | na                                             | 281                     | na          | na                         
|Taizhou   | 5.04                 | 965                                            | 27                      | 11,592      | 2.30                       
|Hangzhou  | 6.29                 | 1,492                                          | 419                     | na          | na                         
|Ningbo    | 5.69                 | 1,263                                          | 48                      | 14,653      | 2.58                       
|TOTAL     | 62.82                |                                                |                         |             |                            

Source:
  China Statistical Yearbook 2007  National Bureau of Statistics of P.R.China

* The Tenth
  Five-Year Plan of the Medicine Industry and Its Development  by BizChina,
  the business arm of ChinaDaily.com.cn

Government Regulation

We have witnessed favorable government policies toward the
healthcare industry in China and several positive measures were implemented to
reform the industry. Pursuant to the Guidance of Healthcare System Reform in
Towns and Cities promulgated in 2000, commercial or privately owned hospitals
are now operating under more business-friendly guidelines. While government
entities (including certain state-owned enterprises) continue to operate public
non-profit making hospitals, providing healthcare services to the general
public, commercial hospitals are given greater flexibility in pricing their
services and higher autonomy in operation and administration. To further
encourage the development of the private hospital industry, private hospitals
enjoy both reductions and exemptions to various taxes during the first three
years of operation. The Guidance also encourages hospitals to adopt measures to
improve their operational efficiencies and technical capabilities.

As per Chinas WTO commitments, Foreign service suppliers are
permitted to establish joint venture hospitals or clinics with local Chinese
partners with quantitative limitations in line with Chinas needs. Foreign
majority ownership is permitted. In accordance with the Interim Regulations on
Administration of Sino-Foreign Joint Venture and Cooperative Medical
Institutions jointly issued by the Ministry of Health (MOH) and the Ministry
of Foreign Trade and Economic Cooperation (MOFTEC, now called Ministry of
Commerce  MOFCOM) in 2000, the Chinese party of Sino-foreign joint ventures
and cooperative medical institutions shall hold no less than 30% of shares and
legal rights or interest, which also mean foreign investors are allowed to hold
a maximum stake of 70%. Such regulations also specify that the establishment of
Sino-foreign joint venture and cooperative medical institutions should be
approved respectively by MOH and MOFCOM. In other words, foreigners are allowed
to run hospitals or clinics in the form of equity or co-operative joint ventures
with an equity interest up to 70% and

11

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duration for co-operation up to 20 years. A private
joint-venture healthcare facility in China therefore has the critical advantages
of being a private hospital overseas, including clear ownership, flexibility and
independence to implement new management practices, and the ability to change
prices and services rapidly in response to market demand.

Competition

Despite the emergence of commercial (for-profit) healthcare
services, they remain an insignificant portion in terms of total hospitals in
China whilst public hospitals continue to account for most of the healthcare
services in China. However, it is a different scenario in the OB/GYN sector
where private hospitals are playing a more dominant role. In 2006, there were a
total of 176 OB/GYN hospitals in China, of which about 30% or 52 hospitals are
state-owned whereas the private-owned accounted for about 40% of total or 70
hospitals. United Family Hospitals is one of our close competitors. It is one of
the internationally funded and managed facilities in mainland China having small
hospitals each of about 50 beds located in Beijing and Shanghai. Besides, there
are international clinics in every major urban center of Beijing, Shanghai and
Guangzhou. Another competitor, International SOS, has the clinics principally
catering the expatriate communities of these cities. Other competitors include
Parkway Health Hospital & Clinics, which has a major presence in Shanghai,
and Shanghai East International Medical Center which is a joint venture hospital
located on the campus of the local Shanghai East Hospital. Joint-venture
hospitals in China are mainly high-end players serving foreign employees and
their dependents from Europe, Japan, South Korea, Taiwan and Hong Kong.

Sales and Marketing

So far, most hospitals in China still rely heavily on referrals
and repeat customers. Having established our UPMG brand awareness in China, we
have the marketing strategy mainly based on the Words of Mouth from our
patients, medical professionals and industry expert in terms of three major
directions.

|1) | Reaching the Right Targets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | We focus on the more affluent peers like high-end
      community groups, residential clubhouses, chambers of commerce and
      corporate clients and emphasize value added services like Patient Safety,
      Customer Service, Help Desk and Healthcare Education.                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2) | Membership System                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Membership-based hospitals are very popular among the
      high-income community in affluent PRC cities like Shanghai. This system
      helps linking up our prenatal care program, postnatal care program, well
      women program and well baby program. We offer membership to first-time
      patients who are then entitled to certain benefits like annual medical
      checkup and 24-hour house call. Other value-added services include
      computerized health records, which are accessible on the Internet, hence
      making them possible to conduct long-distance joint consultation with
      experts in other parts of the world.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3) | Recruitment of Healthcare Professionals Through Wu Ji
      Ping Foundation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Wu Ji Ping Foundation has an extensive hospital
      network and great connections with the PRC government officials, which are
      of great help to recruit high quality medical professionals  an effective
      means to retain our customers.                                                                                                                                                                                                                                                                                                                                                                                                 

Employees

United Premier
  Medical Group Limited currently has three officers. Siew Man Pang is the chief
  executive officer (Mr. Macfarland resigned as our Chief Executive Officer on
  October 1, 2008), Edwin Chan is the chief financial officer and Dr. Kenneth
  Lee is the chief operating officer. UPMG also employs a total of 12 employees
  and consultant in Hong Kong and the PRC, including one deputy project director,
  three managers, four assistants, three general staff and one consultant. United
  Premier Medical Group Limited is not a party to any collective bargaining agreement.
  We believe our relations with the United Premier Medical Group Limited employees
  are satisfactory.

12

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REPORTS TO SECURITY HOLDERS

We are required to file annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange
Commission and our filings are available to the public over the internet at the
Securities and Exchange Commissions website at http://www.sec.gov. The public
may read and copy any materials filed by us with the Securities and Exchange
Commission at the Securities and Exchange Commissions Public Reference Room at
100 F Street N.E. Washington D.C. 20549. The public may obtain information on
the operation of the Public Reference Room by calling the Securities and
Exchange Commission at 1-800-732-0330. The SEC also maintains an Internet site
that contains reports, proxy and formation statements, and other information
regarding issuers that file electronically with the SEC, at
http://www.sec.gov.

Item 1A. Risk Factors

Risks Related to our Business

We have a limited operating history, and it is difficult
to evaluate our financial performance and prospects. There is no assurance that
we will achieve profitability or that we will not discover problems with our
business model.

We have a limited operating history. As such, it is difficult
to evaluate our future prospects and performance, and therefore we cannot ensure
that we will operate profitably in the future.

We have limited funds available for operating expenses.
If we do not obtain funds when needed, we will have to cease our operations.

Currently, we have limited operating capital. As of May 31,
2008, our cash available was approximately $53. In the foreseeable future, we
expect to incur significant expenses when developing our business. We may be
unable to locate sources of capital or may find that capital is not available on
terms that are acceptable to us to fund our additional expenses. There is the
possibility that we will run out of funds, and this may affect our operations
and thus our profitability. If we cannot obtain funds when needed, we may have
to cease our operations.

We depend on attracting and retaining qualified
employees, the failure of which could result in a material decline in our
revenues.

We are a provider of healthcare consultancy services. Our
revenues and future growth depend on our ability to attract and retain qualified
employees. This is especially crucial to our business, as these employees will
generate revenue by providing the services that are the staple product that we
offer. We may face difficulties in recruiting and retaining sufficient numbers
of qualified employees because the market may not have enough of such personnel.
In addition, we compete with other companies for qualified employees. If we are
unable to retain such employees, we could face a material decline in our
revenue.

We derive most of our revenue from treatment facilities
rested with our host hospitals that are located in the Peoples Republic of
China, which makes us particularly sensitive to regulatory and economic
conditions in those cities where our facilities are, or will be located.

For the year ended September 30, 2007, our facilities rested
with our host hospitals in the Peoples Republic of China, or the PRC, accounted
for most of our total revenue. If our treatment facilities are adversely
affected by changes in regulatory and economic conditions within China, our
revenue and profitability may decline.

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We may have difficulty opening new medical facilities and
operating them profitably. We have limited experience in opening new treatment
facilities. If we are unable to execute our strategy, our growth may be
restrained and our operating results could be adversely affected.

Our growth strategy includes developing and opening new medical
facilities throughout the PRC, and, to date, we have limited experience in
opening new treatment facilities. Planning and opening new treatment facilities
can be complex and may be delayed, and, in some circumstances, prevented, by a
variety of forces, including local zoning and land use regulations, health
facility licensing, community opposition and other political issues. Healthcare
laws and other rules and regulations may also impede or increase the cost of
opening new facilities. If we are unable to open new treatment facilities on
time and on budget, our rate of growth and operating results may be adversely
affected.

Even if we are able to open new treatment facilities, we may
not be able to staff them. In addition, there can be no assurance that, once
completed, new treatment facilities will be able to generate operating profits.
Developing new facilities involves significant upfront capital investment and
expense and, if we are unable to attract patients quickly and/or enter into
contracts or extend our existing contracts with third party payers for these
facilities, these facilities may not be profitable and our operating results
could be adversely affected.

If we fail to cultivate new or maintain established
relationships with patient referral sources, our revenue may decline.

Our ability to grow or maintain our existing level of business
depends significantly on our ability to establish and maintain close working
relationships with patient referral sources. We may not be able to maintain our
existing referral source relationships or develop and maintain new relationships
in existing or new markets. If we lose existing relationships with our referral
sources, the number of patients we treat may decline, which may adversely affect
our revenue. If we fail to develop new referral relationships, our growth may be
restrained.

If we fail to implement our business strategy, our
business, financial condition and results of operations could be materially and
adversely affected.

Our future financial performance and success are dependent in
large part upon our ability to implement our business strategy successfully. We
may not be able to implement our business strategy successfully or achieve the
anticipated benefits of our business plan. If we are unable to do so, our
long-term growth and profitability may be adversely affected. Even if we are
able to implement some or all of the initiatives of our business plan
successfully, our operating results may not improve to the extent we anticipate,
or at all.

If we fail to use the brand of Johns Hopkins
International, our financial condition and results of operations could be
materially and adversely affected.

Our current performance and success are dependent in certain
extent upon the educational and consulting services provided by Johns Hopkins
International, LLC. If we are unable to receive such services, our profitability
may be adversely affected and our operating results may not improve to the
extent we anticipate.

Our success depends on our ability to manage growth
effectively. If we do not manage growth effectively, we may not be able to
maintain profitability.

Even if we are successful in generating new business, failure
to manage our growth could adversely affect our financial condition. We may
experience extended periods of very rapid growth. If we are not able to manage
our growth effectively, our business and financial condition could materially
suffer. Our growth may significantly strain our managerial, operational and
financial resources and systems. To manage our growth effectively, we will have
to continue to implement and improve our operational, financial and management
controls, reporting systems and procedures. In addition, we must effectively
expand, train and manage our employees. We will be unable to manage our
businesses effectively if we are unable to alleviate the strain on resources
caused by growth in a timely and successful manner. We may not be able to manage
our growth and a failure to do so could have a material adverse effect on our
business.

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If the PRC government finds that the agreements that
establish the structure for operating our business operations within the PRC do
not comply with PRC governmental regulations on foreign investment in the
medical industry, we could be subject to penalties. Such penalties may impact
our ability to maintain profitability.

If we or our operating subsidiaries or affiliates are found to
be in violation of any existing or future PRC laws or regulations, we could be
subject to severe penalties, including but not limited to: (i) revocation of our
business and operating licenses; (ii) discontinuing or restricting our
operations; (iii) imposition of conditions or requirements with which we may not
be able to comply; (iv) requirement that we restructure the relevant ownership
structure or operation; and (v) restriction or prohibition on our use of the
proceeds of our business operations to further finance our operations in the
PRC.

We rely on contractual arrangements with PRC obstetric
and gynecologic hospitals, which may not be as effective in providing
operational control as direct ownership. If we cannot maintain these
arrangements, we may have to cease operations.

We rely on contractual arrangements with PRC obstetric and
gynecologic hospitals to operate our business. These contractual arrangements
may not be as effective in providing us with control over our operations as
direct ownership. Under the current contractual arrangements, if the PRC
obstetric and gynecologic hospitals fail to perform their respective obligations
under these contractual arrangements, we may have to incur substantial costs to
enforce such arrangements and rely on legal remedies available under PRC law,
which may not be effective to allow us to maintain our business operations.
Additionally, many of these contractual arrangements are governed by PRC law
and, accordingly, will be interpreted in accordance with PRC law, and any
disputes would be resolved according to PRC legal procedures. The legal
environment in the PRC is not as developed as in other jurisdictions, such as
the United States. As a result, uncertainties in the PRC legal system could
limit our ability to enforce these contractual arrangements. In the event we are
unable to enforce these contractual arrangements, we may not be able to exert
effective control over our operations, and our ability to conduct our business
may be negatively affected.

Contractual arrangements we have entered into among our
subsidiaries and affiliated entities may be subject to scrutiny by the PRC tax
authorities. Such scrutiny may lead to additional tax liability and fines, which
would hinder our ability to achieve or maintain profitability.

Risks Relating to the Peoples Republic of China

Substantially all of our assets are located in the PRC and
substantially all of our revenues are derived from our operations in the PRC.
Accordingly, our business, financial condition, results of operations, and
prospects are subject, to a significant extent, to economic, political and legal
developments in the PRC.

The PRCs economic, political and social conditions, as
well as governmental policies, could affect the financial markets in the PRC,
our liquidity and access to capital, and our ability to operate our
business.

Our financial condition and results of operations may be
adversely affected by government control over capital investments or changes in
tax regulations that are applicable to us. The PRC economy differs from the
economies of most developed countries in many respects, including the amount of
government involvement, level of development, growth rate, control of foreign
exchange and allocation of resources. While the PRC economy has experienced
significant growth, growth has been uneven, both geographically and among
various sectors of the economy. The PRC government has implemented various
measures to encourage economic growth and to guide the allocation of resources.
The PRC economy has been transitioning from a planned economy to a more
market-oriented economy. Although the PRC government has implemented measures
since the late 1970s emphasizing the utilization of market forces for economic
reform, the reduction of state ownership of productive assets, and the
establishment of improved corporate governance in business enterprises, a
substantial portion of productive assets in the PRC are still owned by the PRC
government. In addition, the PRC government continues to play a significant role
in regulating industry development by imposing industrial policies. The PRC
government also exercises significant control over its economic growth through
the allocation of resources, controlling payment of foreign currency-denominated
obligations, setting monetary policy and providing preferential treatment to
particular industries or companies. Since late 2003, the PRC government has
implemented a number of measures, such as raising bank reserves against deposit
rates to place additional limitations on the ability of commercial banks to make
loans and raise interest rates,

15

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in order to slow down specific segments of the PRCs economy.
These actions, as well as future actions and policies of the PRC government,
could materially affect our liquidity and access to capital and our ability to
operate our business.

The PRC legal system embodies uncertainties which could
limit the legal protections available to us.

The PRC legal system is a civil law system based on written
statutes. Unlike common law systems, it is a system in which decided legal cases
have little precedential value. In 1979, the PRC government began to promulgate
a comprehensive system of laws and regulations governing economic matters in
general. The overall effect of legislation has been significantly enhanced
protections afforded to various forms of foreign investment in the PRC. However,
these laws, regulations and legal requirements change frequently, and their
interpretation and enforcement involve uncertainties. For example, we may have
to resort to administrative and court proceedings to enforce the legal
protection that we enjoy either by law or contract. However, because PRC
administrative and court authorities have significant discretion in interpreting
and implementing statutory and contractual terms, it may be more difficult to
evaluate the outcome of administrative and court proceedings and the level of
legal protection we enjoy than in more developed legal systems. In addition,
such uncertainties, including the inability to enforce our contracts, could
materially and adversely affect our business and operation. Also, intellectual
property rights and confidentiality protections in the PRC may not be as
effective as in the United States or other countries. Accordingly, we cannot
predict the effect of future developments in the PRC legal system, particularly
with regard to the medical industry, including the promulgation of new laws,
changes to existing laws or the interpretation or enforcement thereof, or the
preemption of local regulations by national laws. These uncertainties could
limit the legal protections available to us.

U.S. investors may experience difficulties in attempting
to enforce judgments based upon U.S. federal securities laws against us and our
non-U.S. resident directors.

All of our operations and our assets are located outside the
United States and some of our directors and officer are foreign citizens. As a
result, it may be difficult or impossible for U.S. investors to enforce
judgments of U.S. courts for civil liabilities against any of our individual
directors or officers.

Risks Relating to Our Common Shares

Trading on the OTC Bulletin Board may be volatile and
sporadic, which could depress the market price of our common shares and make it
difficult for our shareholders to resell their shares.

Our common shares are quoted on the OTC Bulletin Board service.
Trading in shares quoted on the OTC Bulletin Board is often thin and
characterized by wide fluctuations in trading prices, due to many factors that
may have little to do with our operations or business prospects. This volatility
could depress the market price of our common shares for reasons unrelated to
operating performance. Moreover, the OTC Bulletin Board is not a stock exchange,
and trading of securities on the OTC Bulletin Board is often more sporadic than
the trading of securities listed on a quotation system like Nasdaq or a stock
exchange like Amex. Accordingly, shareholders may have difficulty reselling any
of the shares.

Our share is a penny stock. Trading of our share may be
restricted by the SECs penny stock regulations which may limit a shareholders
ability to buy and sell our shares.

Our share is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in

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the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules; the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the shares that are subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common shares.

FINRA sales practice requirements may also limit a
shareholder's ability to buy and sell our share.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority,
or FINRA, has adopted rules that require that in recommending an investment to a
customer, a broker-dealer must have reasonable grounds for believing that the
investment is suitable for that customer. Prior to recommending speculative low
priced securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the FINRA believes that there is a high probability that
speculative low priced securities will not be suitable for at least some
customers. The FINRA requirements make it more difficult for broker-dealers to
recommend that their customers buy our common shares, which may limit your
ability to buy and sell our share.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common shares.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal
  office is located at T Plaza Center, Suite 400, 15950 North Dallas Parkway,
  Dallas. Our telephone number is (972) 361-8033. Our principal office is held
  under a one year lease to expire on August 2009. We rent this office space at
  a cost of $95 per month plus administrative expenses. We believe that the condition
  of our principal office is satisfactory, suitable and adequate for our current
  needs.

We also maintain
  our office in Hong Kong at Room 904, Tung Wai Commercial Building, 109 –
  111 Gloucester Road, Wan Chai, Hong Kong. Our telephone number is (852) 2511-8008.
  Our Hong Kong office is held under a lease with a term from August 1, 2008 to
  June 15, 2009 with rent of HK$30,000 per month.

We also hold the following property interests:

|Location                                                                                       | Tenant                                                      | Term of Lease                 | Rent              
|---------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | ----------------------------- | ------------------
|Room 1505, Block A, Hui Ya Garden 251
      Tian He Bie Road, Tian He District, Guangzhou, PRC | Guangzhou Inno-Proactive Medicare
      Consultancy Limited | July 1, 2004  June 30, 2006  | RMB5,300 per month
|Flat 5M-5O, Block A, Cai Fu Square 7060
      Shen Nam Da Road, Fu Tian District Zhenzhen, PRC | UPMG (US) Limited                                           | July 20, 2005  July 20, 2007 | RMB2,500 per month

17

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|Location                                                                                                    | Tenant                                                      | Term of Lease                      | Rent               
|----------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | ---------------------------------- | -------------------
|Room 3C2, Dian Wu Zhoung He Lou Jian Yi
      Zhi Street, Tian Shou Road Tian He District, Guangzhou, PRC   | Guangzhou Inno-Proactive Medicare
      Consultancy Limited | June 16, 2007  June 15, 2008      | RMB1,980 per month 
|Building 16, 302, Ding Xiang Apartment
      800 Hua Shan Road Shanghai, PRC                                | Guangzhou Inno-Proactive Medicare
      Consultancy Limited | June 16, 2007  June 15, 2008      | RMB7,500 per month 
|Room 1204, Tung Wai Commercial Building,
      109-111 Gloucester Road, Wanchai, HK                         | Proactive Medicare Enterprise (Hong Kong)
      Limited     | January 1, 2008  August 31, 2008  | $2,275 per month   
|Room 352, Dian Wu Zhoung He Lou, Jian Yi
      Zhi Street, Tian Shou Road, Tian He District, Guangzhou, PRC | Guangzhou Inno-Proactive Medicare
      Consultancy Limited | June 16, 2008 to December 15, 2008 | RMB1,980 per month 
|Tomson Center, 188 Zhang Yang Road,
      B-1601, Pudong Shanghai, PRC 200120                               | China Health Care Corporation                               | June 20, 2008 to June 30, 2009     | RMB15,000 per month

Item 3. Legal Proceedings

Other than as set out below, we know of no material, existing
or pending legal proceedings against us, nor are we involved as a plaintiff in
any material proceeding or pending litigation. There are no proceedings in which
any of our directors, officers or affiliates, or any registered or beneficial
shareholder, is an adverse party or has a material interest adverse to our
company.

Proactive Medicare Enterprise (HK) Limited, a subsidiary of our
company, is a plaintiff in a legal proceeding regarding a civil claim against a
hospital in the PRC namely, International Peace Maternity & Child Health
Hospital of the China Welfare Institute (IPMCHH or the defendant) who
refused to pay consultancy fees to PME-HK since April 2005.

On April 10, 2007, Proactive Medicare Enterprise (HK) Limited
(PME-HK) brought a civil action to the Shanghai No. 1 Intermediate Peoples
Court (the Shanghai Court) in the PRC against IPMCCH for breach of contract. A
statement claim from PME-HK was sent to the Shanghai Court for acceptance of
review. The proposed claims regarding this civil action included: (i) To order
IPMCHH to honor the co-operative agreement signed between PME-HK and IPMCHH on
February 2, 2004; (ii) To order IPMCHH to pay the consultant fee amounted
$2,890,000 (equivalent to RMB22,677,123) in arrears owed to PME-HK, and (iii)
IPMCHH shall bear the cost of this action.

On April 12, 2007, the statement of claim was legally accepted
and filed by the Shanghai Court (Notification of Acceptance: (2007) Hu Yi Zhong
Min Wu (Shang) Chu Zi No. 93). On May 29, 2007, the first instance of the case
was held to establish the case. On January 23, 2008, the second instance of the
case was held to further negotiate a mutually accepted settlement plan. Through
the mediation of the Shanghai Court, PME-HK and IPMCHH, so far, have gone
through several rounds of negotiation for a mutually agreed settlement amount in
recent months but a final settlement amount has yet to be confirmed.

We have also engaged a law firm in the PRC to negotiate with
two other hospitals in the PRC which are under contracts to pay us for the
consultancy services provided to their affiliated VIP Birthing Centers in Foshan
and Changsha in the PRC. The proposed claim in each case is about one million US
dollars. We have gone through several rounds of negotiation for an agreed
settlement amount in recent months and a final settlement amount has yet to be
confirmed. For the Hangzhou Center, we are identifying a suitable PRC lawyer to
negotiate with the host hospital for a mutually accepted settlement plan.

18

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The results of these negotiations / claim cannot be predicted,
and it is possible that the ultimate resolution of these matters, individually
or in the aggregate, may have a material adverse effect on our business (either
in the near-term or in the long-term), financial position, results of
operations, or cash flows.

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

None.

PART II

Item 5. Market for Registrants Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities

Our shares of common stock began trading on the OTC Bulletin
Board on March 22, 2008 under the symbol CVLG. Prior to this date, there was
no public market for our common shares. Our common shares became listed on the
OTC Bulletin Board on March 22, 2007, under the symbol CVLG. Prior to this
date, there was no public market for our common shares. On May 13, 2008, we
effected a change of name of our company from The Cavalier Group to China Health
Care Corporation. The name change became effective with the OTC Bulletin Board
at the opening for trading on May 16, 2008 under the new stock symbol
CNHL.

As of August 5, 2008, trading in our common shares has not
commenced on a consistent basis.

Item 6. Selected Financial Data

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations

We were incorporated in the State of Wyoming on February 11,
2005. Since our incorporation, we had been in the business of the exploration
and development of a mineral property approximately 1,320 acres in size in
north-eastern Ontario. Because we were not successful in implementing our
business plan, we considered various alternatives to ensure the viability and
solvency of our company.

On January 20, 2008, we entered into a share exchange agreement
with United Premier Medical Group Limited, a Cayman corporation, and the
shareholders of United Premier Medical Group Limited, a company engaged in the
provision of premium medical services in the Peoples Republic of China. The
share exchange agreement contemplated our company acquiring all of the issued
and outstanding common shares in the capital of United Premier Medical Group
Limited in exchange for the issuance by our company of 42,658,000 shares of our
common stock.

As of the closing date of the share exchange agreement on July
24, 2008, we have contracts to provide consultancy services to a total of five
VIP Birthing Centers in the PRC and to manage a private hospital in Macau. These
centers are located in Wuxi (the Wuxi Center), Xiamen (the Xiamen Center),
Changsha (the Changsha Center), Foshan (the Foshan Center) and Hangzhou
(the Hangzhou Center). For the Wuxi Center, Xiamen Center and the hospital in
Macau, they are operated under our service contracts and regularly paying us a
monthly service fee. For the Changsha Center, it is still under our service
contracts but the host hospital of this center has stopped paying us since June
2007 but still using the JHI brand name. We have engaged a law firm in the PRC
to negotiate with the host hospital for a settlement for the sake of not taking
any legal action. For the Foshan Center, it is still operated under our service
contract but the host hospital has stopped paying us since October 2006 and no
longer using the JHI brand name. We engaged a law firm in the PRC to negotiate
with the host hospital for a settlement for the sake of not taking any legal
action. For the Hangzhou Center, though our service contract is still valid, we
have not been paid since the commencement of its operation. We are identifying a
law firm in the PRC to negotiate with its host hospital for a possible
settlement. The center in Guangzhou (the Guangzhou Center) ceased its
operation in March 2007 and our invested assets were sold back to its host
hospital. The net receipt of this asset sale amounted to $968,000. For the
center in Shanghai (the Shanghai Center), we have not been paid since January
2006 and we

19

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have taken legal action against the host hospital for breach
  of contract. The case was accepted by and filed in the Shanghai No.1 Intermediate
  Peoples Court in the PRC on April 10, 2007. Our proposed claim is about
  $2,900,000 (equivalent to RMB22,600,000).
  These hospitals stopped paying for our services mainly due to 1) the newly appointed
  hospital directors who do not honor their predecessors’ contractual commitment
  with the Company as the case of the Changsha Center and the Shanghai Center;
  2) poor sense of contractual commitment of existing hospital management as in
  the case of the Foshan Center that the host hospital intends to keep all the
  profits once the knowledge transfer on how to run a successful unit has been
  essentially completed. We believe these events may negatively impact our net
  income, but only limited to those non-paid VIP Birthing Centers. However, we
  seek to minimize this risk for our remaining centers by implementing additional
  safeguard on intellectual property right while maintaining a strong political
  and personal relationship with relevant stakeholders. We are currently
  in dispute with JHI mainly on the fee structure, outstanding fee owing to JHI
  and use of the JHI name in future, and we are actively negotiating
  with JHI for a possible settlement.

We have devised a five-year business development plan in order
to capture substantial market share in China within a short period. This plan
follows a proactive pace of acquiring or establishing at least 15 specialty
hospitals and 45 satellite health centers in major PRC cities. Our targets
include those medium size hospitals each with 30 to 40 patient rooms. The first
target region in China will be the more affluent Changjiang Delta Region. The
first acquisition will be our model hospital that aims to provide a proven
success for future expansion.

Over the next
  twelve months, we plan to acquire 4 hospitals / health centers. Letters of Intent
  have been negotiated with a total of 4 to 5 acquisitions / management contract
  across Greater China. These potential targets are currently unrelated to us.
  We expect to go through at least several rounds of negotiation and the comprehensive
  due diligent process before closing these deals, which are scheduled to complete
  within 6 months from now. The due diligent process is considered a necessary
  process before negotiation the details of acquisition agreements. These acquisitions
  are typically in the more affluent cities like Beijing, Shanghai, Nanjing and
  Macau. Such acquisitions will include fully licensed small specialty hospitals
  each with about 30 to 40 beds as well as established satellite clinics. Additional
  merger & acquisition targets have been identified for the pipeline and negotiations
  are ongoing. We intend to finance these acquisitions through private placement
  to institutional investors. As a result, our future business will typically
  consist of three major revenue drivers, namely, VIP Birthing Center, Satellite
  Health Center and Specialty Hospital.

VIP Birthing Center is typically a hotel-style
integrated healthcare center consisting of 11 to 30 bedrooms. These centers are
specialized in providing premium obstetric and gynecologic services to
high-income locals and expatriates in the PRC. We emphasize home-feel facilities
and environment, professional clinical services, sophisticated clinical
indicators and reviews, high-end customer services, effective pain management
and infection control - all of them have attained the stringent U.S. quality
standards. More importantly, our customized and personalized services provide
much flexibility and allow our patients to choose their own specialty medical
services and surgery experts. To ensure service quality, safety and patient
privacy, our one-stop services is a continuous flow ranging from ultrasound
diagnosis, laboratory analysis to dispensary.

Satellite Health Centerprovides full scope of premium
outpatient services. Strategically, it is better than the VIP Birthing Centers
in the sense that we own the operating license of the clinic and hence has full
control of revenue received. Such business model can substantially increase the
flexibility in utilizing our resources in outpatient services. Besides, it will
play an important role in the overall network development of our specialty
hospitals by referring patients to specialty hospitals. At the initial stage, we
will target a ratio of 1 specialty hospital associated with 3 satellite health
centers.

Specialty Hospital Chain refers to a chain of medium
size hospitals in the PRC providing specialty healthcare services primarily for
women and children. For the coming years, we target to acquire about 15
hospitals, each having 30 to 40 bedrooms in size, and convert them into
specialty hospitals with outpatient services, inpatient services and minor
surgery services principally in the categories of Obstetrics, Gynecology,
Pediatrics, Urology and Infertility.

Services provided by our VIP Birthing Centers, Specialty
Hospitals and Satellite Health Centers are summarized as follow:

Services of VIP Birthing Center:

20

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|OBSTETRIC SERVICES                                                                                                                                                                     | GYNECOLOGIC SERVICES                                                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Outpatient: Pre-delivery
      check-up & consultation Prenatal genetics consultation
      Inpatient and / or Minor Surgery:
      Vaginal Birth Caesarean section Prenatal Education | Outpatient:
      Gynecologic check up Pre-marriage body checkup
      Inpatient and / or Minor Surgery:
      Gynecologic minor operation Minor operation for planned
      childbirth

Services of Specialty Hospital:

|OUTPATIENT                                                                                                                                      | INPATIENT                                                                                                            | MINOR SURGERY                                                                                               
|----------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------
|Obstetric services Gynecologic services
      Pediatric services Urology services Medical
      check-up Women wellness Rehabilitation Services | Obstetric services Gynecologic services
      Pediatric services Rehabilitation Services Nursing
      Home Services | Obstetric services Gynecologic services
      Pediatric services Urology services Infertility
      services

Services of Satellite Health Center:

|OB/GYN                                                                                                                                             | PEDIATRICS                                                                                                                                                       | INTERNAL MEDICINE                                                                                                                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|Obstetric services Gynecologic services
      Uro-gynecologic services Medical Cosmetic Service
      Women wellness check-up Infertility Services | Health Maintenance Services
      Anticipatory Guidance Immunization programs
      Rehabilitation Services Developmental Screening
      School Health Programs | Adult Health Maintenance Adult
      Vaccination Program Chronic Disease Management Urology
      services Rehabilitation Services Integrated TCM Services

21

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Results of Operations

Our financial statements for the year ended May 31, 2008, do
not reflect the acquisition of our subsidiary, United Premier Medical Group
Limited, completed on July 24, 2008.

|                   |   | Year Ended | 
|------------------ | - | ---------- | 
|                   |   | May 31     | 
|                   |   | 2008       | 
|Revenue            | $ | Nil        | 
|Operating Expenses | $ | 20,279     | 
|Net Loss           | $ | 20,279     | 

Revenue

We have not earned any revenues since our inception.

Expenses

Our operating expenses for the year ended May 31, 2008 and 2007
are outlined in the table below:

|                                                       |   | Year Ended | 
|------------------------------------------------------ | - | ---------- | 
|                                                       |   | May 31     | 
|                                                       |   | 2008       | 
|Contributed Rent                                       | $ | 2,400      | 
|Contributed
      Administrative Support               | $ | 200        | 
|Professional Fees                                      | $ | 6,255      | 
|Travel and Meals                                       | $ | Nil        | 
|Office                                                 | $ | 5,174      | 
|Rent                                                   | $ | Nil        | 
|Organization Costs                                     | $ | Nil        | 
|Bank Charges                                           | $ | 342        | 
|Licenses, Permits Filing Fees                          | $ | 2,761      | 
|Mineral Interest
      Acquisition Costs  Exploration | $ | Nil        | 
|Public Relations                                       | $ | 2,729      | 
|Interest Expense                                       | $ | 418        | 

Operating expenses for the year ended May 31, 2008, decreased
by 62.20% as compared to the comparative period in 2007, primarily as a result
of a decrease in mineral interest acquisition costs and office expense.

22

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Liquidity and Financial Condition

Working Capital

|                    |   | At May 31, |   |   | At May 31, | 
|------------------- | - | ---------- | - | - | ---------- | 
|                    |   | 2008       |   |   | 2007       | 
|Current Assets      | $ | 53         |   | $ | 3,258      | 
|Current Liabilities | $ | 18,418     |   | $ | 3,000      | 
|Working Capital     | $ | (18,365    | ) | $ | 258        | 

Cash Flows

|                                                    |   | At May 31, |   |   | At May 31, |  
|--------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                    |   | 2008       |   |   | 2007       |  
|Net Cash Used in Operating Activities               | $ | (2,261     | ) | $ | (57,035    | )
|Net Cash Provided by (Used In) Investing Activities | $ | Nil        |   | $ | Nil        |  
|Net Cash Provided by Financing Activities           | $ | Nil        |   | $ | 54,500     |  
|Effect of Exchange Rate Changes                     | $ | (944       | ) | $ | 954        |  
|Increase In Cash During The Period                  | $ | (3,205     | ) | $ | (1,581     | )

As of May 31, 2008, our company had a working capital deficit
of $18,365.

Future Financings

We will require additional financing in order to enable us to
proceed with our plan of operations, as discussed above. Accordingly, we will
require additional financing in order to continue operations. There is no
assurance that any party will advance additional funds to us in order to enable
us to sustain our plan of operations.

We anticipate continuing to rely on equity sales of our common
stock in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing stockholders. There is
no assurance that we will achieve any additional sales of our equity securities
or arrange for debt or other financing to fund our planned business
activities.

We presently do not have any arrangements for additional
financing and no potential lines of credit or sources of financing are currently
available for the purpose of proceeding with our plan of operations.

Contractual Obligations

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

23

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Going Concern

Because we are in the development stage, have not yet achieved
profitable operations and are dependent on our ability to raise capital from
stockholders or other sources to meet our obligations and repay our liabilities
arising from normal business operations when they become due, in their report on
our audited financial statements for the year ended May 31, 2008, our
independent auditors included an explanatory paragraph regarding concerns about
our ability to continue as a going concern. Our financial statements contain
additional note disclosure describing the circumstances that lead to this
disclosure by our independent auditors.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.

Critical Accounting Policies

The discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with the accounting principles generally accepted in the
United States of America. Preparing financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by managements application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.

Functional Currency

The Companys functional currency is the Canadian dollar;
however, the accompanying financial statements and footnotes refer to United
States (U.S.) dollars unless Canadian dollars are specifically designated with
CDN.

Cash and Cash Equivalents

The Company considers all highly liquid securities with
original maturities of three months or less when acquired to be cash
equivalents. There were no cash equivalents at May 31, 2008.

Financial Instruments

At May 31, 2008, the fair value of the Companys financial
instruments approximate their carrying value based on their terms and interest
rates.

Mineral Interests

Mineral interest acquisition costs include cash consideration
and the estimated fair value of common shares issued for mineral properties,
based on recent share issuances. Exploration and development expenditures are
expensed in the period incurred until such time as the Company establishes the
existence of commercial feasibility, at which time these costs will be deferred.
Administrative expenditures are expensed in the period incurred.

Mineral interest acquisition costs and related interest and
financing costs may be deferred until the property is placed into production,
sold or abandoned. Mineral interest acquisition costs will be deferred only when
and if proven and probable reserves have been found to exist. No proven or
probable reserves are currently known to exist.

Any deferred costs will be amortized on a unit-of-production
basis over the estimated proven and probable reserves of the property following
commencement of commercial production or written off if the property is sold,
allowed to lapse or abandoned.

24

---

Earnings (Loss) per Common Share

The Company reports loss per share using a dual presentation of
basic and diluted loss per share. Basic loss per share excludes the impact of
common stock equivalents. Diluted loss per share utilizes the average market
price per share when applying the treasury stock method in determining common
stock equivalents. At May 31, 2008, there were no variances between the basic
and diluted loss per share as there were no potentially dilutive securities
outstanding.

Income Taxes

The Company accounts for income taxes under the provisions of
SFAS No. 109, Accounting for Income Taxes(SFAS 109). SFAS 109 requires
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse.

Foreign Currency Translation

The accounts of the Companys foreign operations have been
translated into United States dollars. Assets and liabilities of those
operations are translated in U.S. dollars using exchange rates as of the balance
sheet date; income and expenses are translated using the average exchange rates
for the reporting period. Translation adjustments are deferred in accumulated
other comprehensive income (loss), a separate component of shareholders
deficit.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements, which clarifies the definition of fair value, establishes a
framework for measuring fair value within GAAP and expands the disclosures
regarding fair value measurements. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007. In
February 2008, the FASB issued FSP 157-2 Partial Deferral of the Effective Date
of Statement 157 (FSP 157-2). FSP 157-2 delays the effective date of SFAS 157,
for all nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually) to fiscal years beginning after November 15, 2008.

In February 2007, the Financial Accounting Standards Board
(FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115
(SFAS 159). SFAS No. 159 permits entities to choose to measure many financial
instruments and certain other items at fair value. This provides entities with
the opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without being required to apply
complex hedge accounting provisions. The provisions of SFAS No. 159 are
effective as of the beginning of fiscal years that start after November 15, 2007
(fiscal year March 31, 2009).

Effective March 26, 2007, we adopted FASB Interpretation No.
48, Accounting for Uncertainty in Income Taxesan Interpretation of FASB
Statement 109(FIN 48). FIN 48 requires that a position taken or expected
to be taken in a tax return be recognized in the financial statements when it is
more likely than not (i.e. a likelihood of more than fifty percent) that the
position would be sustained upon examination by tax authorities. A recognized
tax position is then measured at the largest amount of benefit that is greater
than fifty percent likely of being realized upon ultimate settlements. Upon
adoption, the Company does not have any material uncertain tax positions.

In March 2008, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards 161, Disclosures
about Derivative Instruments and Hedging Activities", which amends the
disclosure requirements of SFAS 133. SFAS 161 provides an enhanced
understanding about how and why derivative instruments are used, how they are
accounted for and their effect on an entitys financial position, performance
and cash flows. SFAS 161, which is effective for fiscal years beginning after
November 15, 2008, will require additional

25

---

disclosure in future filings, but will have no financial impact
to the Companys results of operations, cash flows or financial position.

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item 8. Financial Statements and Supplementary Data

26

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|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Index to Financial Statements 

|                                                                                                                                                                   | Page
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----
|                                                                                                                                                                   |     
|                                                                                                                                                                   |     
|Balance Sheet at May 31, 2008                                                                                                                                      | F-2 
|                                                                                                                                                                   |     
|Statements of Operations for the years ended May 31, 2008
      and 2007, and for the period from February 11, 2005 (inception) through
      through May 31, 2008 | F-3 
|                                                                                                                                                                   |     
|Statement of Changes in Shareholders' Deficit for the period
      from February 11, 2005 (inception) through May 31, 2008                                         | F-4 
|                                                                                                                                                                   |     
|Statements of Cash Flows for the years ended May 31, 2008
      and 2007, and for the period from February 11, 2005 (inception) through
      through May 31, 2008 | F-6 
|                                                                                                                                                                   |     
|Notes to Financial Statements                                                                                                                                      | F-7 

27

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Director and Shareholders

China Health Care Corporation (formerly The Cavalier
Group):

We have audited the accompanying balance sheet of China Health
Care Corporation as of May 31, 2008, and the related statements of operations,
changes in shareholders deficit and cash flows for the years ended May 31, 2008
and 2007, and from February 11, 2005 (inception) through May 31, 2008. These
financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Companys internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of China Health
Care Corporation as of May 31, 2008, and the results of its operations and its
cash flows for the years ended May 31, 2008 and 2007, and from February 11, 2005
(inception) through May 31, 2008 in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the financial statements, the Company has a limited operating history, limited
funds, and a working capital deficit, which raises a substantial doubt about its
ability to continue as a going concern. Managements plans in regard to these
matters are also described in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

Cordovano and Honeck LLP

Englewood, Colorado

July 18, 2008

F-1

---

|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Balance Sheet                 
|May 31, 2008                  

|                                                                    |   | May 31   |   |   | May 31  |  
|------------------------------------------------------------------- | - | -------- | - | - | ------- | -
|                                                                    |   | 2008     |   |   | 2007    |  
|Assets                                                              |   |          |   |   |         |  
|Current assets:                                                     |   |          |   |   |         |  
|Cash                                                                | $ | 53       |   | $ | 3,258   |  
|                                                                    |   |          |   |   |         |  
|Total assets                                                        | $ | 53       |   | $ | 3,258   |  
|                                                                    |   |          |   |   |         |  
|Liabilities and Shareholders
      Deficit                         |   |          |   |   |         |  
|Current liabilities:                                                |   |          |   |   |         |  
|Notes payable:                                                      |   |          |   |   |         |  
|Related
      party (Note 2)                                        | $ | 5,000    |   | $ | ---     |  
|Other
      (Note 6)                                                |   | 10,000   |   |   | ---     |  
|Accrued interest
      payable                                      |   | 418      |   |   | ---     |  
|Accrued liabilities                                                 |   | 3,000    |   |   | 3,000   |  
|Total
      current liabilities                                     |   | 18,418   |   |   | 3,000   |  
|                                                                    |   |          |   |   |         |  
|                                                                    |   |          |   |   |         |  
|Shareholders deficit (Note 4):                                     |   |          |   |   |         |  
|Common stock, $.001 par value;
      200,000,000 shares authorized, |   |          |   |   |         |  
|7,490,000
      shares issued and outstanding                       |   | 7,490    |   |   | 7,490   |  
|Additional paid-in capital                                          |   | 74,560   |   |   | 71,960  |  
|Accumulated deficit                                                 |   | (100,577 | ) |   | (80,298 | )
|Cumulative translation
      adjustment                             |   | 162      |   |   | 1,106   |  
|Total
      shareholders deficit                                   |   | (18,365  | ) |   | 258     |  
|                                                                    |   |          |   |   |         |  
|Total liabilities and shareholders deficit                         | $ | 53       |   | $ | 3,258   |  

See accompanying notes to financial statements

F-2

---

|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Statements of Operations      

|                                                     |   |                     |   |   |           |   |   | February 11, 2005 |  
|---------------------------------------------------- | - | ------------------- | - | - | --------- | - | - | ----------------- | -
|                                                     |   |                     |   |   |           |   |   | (Inception)       |  
|                                                     |   | For The Years Ended |   |   | Through   |  
|                                                     |   | May 31,             |   |   | May 31,   |  
|Expenses:                                            |   | 2008                |   |   | 2007      |   |   | 2008              |  
|Contributed rent (Note
      2)                      | $ | 2,400               |   | $ |          |   | $ | 3,800             |  
|Contributed administrative support
      (Note 2)    |   | 200                 |   |   | 200       |   |   | 750               |  
|Professional fees                                    |   | 6,255               |   |   | 8,730     |   |   | 23,885            |  
|Travel and meals                                     |   |                    |   |   | 1,175     |   |   | 4,619             |  
|Office                                               |   | 5,174               |   |   | 13,390    |   |   | 26,250            |  
|Rent.                                                |   |                    |   |   | 2,400     |   |   | 2,400             |  
|Organization costs                                   |   |                    |   |   |          |   |   | 250               |  
|Bank Charges.                                        |   | 342                 |   |   | 68        |   |   | 730               |  
|Licenses, permits
      filing fees                  |   | 2,761               |   |   | 1885      |   |   | 8,941             |  
|Mineral interest acquisition
      costs-Exploration |   |                    |   |   | 20,603    |   |   | 20,603            |  
|Public relations                                     |   | 2,729               |   |   | 5,202     |   |   | 7,931             |  
|Interest expense                                     |   | 418                 |   |   |          |   |   | 418               |  
|Total expenses                                       |   | 20,279              |   |   | 53,653    |   |   | 100,577           |  
|                                                     |   |                     |   |   |           |   |   |                   |  
|Loss before income taxes                             |   | (20,279             | ) |   | (53,653   | ) |   | (100,577          | )
|                                                     |   |                     |   |   |           |   |   |                   |  
|Income tax provision (Note 4)                        |   |                    |   |   |          |   |   |                  |  
|                                                     |   |                     |   |   |           |   |   |                   |  
|Net loss                                             | $ | (20,279             | ) | $ | (53,653   | ) | $ | (100,577          | )
|                                                     |   |                     |   |   |           |   |   |                   |  
|Basic and diluted loss per share                     | $ | (0.00               | ) | $ | (0.01     | ) |   |                   |  
|                                                     |   |                     |   |   |           |   |   |                   |  
|Basic and diluted weighted average                   |   |                     |   |   |           |   |   |                   |  
|common shares outstanding                            |   | 7,490,000           |   |   | 6,945,000 |   |   |                   |  

See accompanying notes to financial statements

F-3

---

|China Health Care Corporation                
|---------------------------------------------
|(Formerly The Cavalier Group)                
|(An Exploration Stage Company)               
|Statement of Changes in Shareholders' Deficit

|                                               |              |  |   |           |  |   |             |  |   |               |   |   | Cumulative  |  |   |         |  
|---------------------------------------------- | ------------ |  | - | --------- |  | - | ----------- |  | - | ------------- | - | - | ----------- |  | - | ------- | -
|                                               |              |  |   |           |  |   |             |  |   |               |   |   | Translation |  |   |         |  
|                                               |              |  |   |           |  |   |             |  |   |               |   |   | Adjustment  |  |   |         |  
|                                               |              |  |   |           |  |   | Additional  |  |   |               |   |   | Other       |  |   |         |  
|                                               | Common Stock |  |   | Paid-In   |  |   | Accumulated |  |   | Comprehensive |   |   |             | 
|                                               | Shares       |  |   | Par Value |  |   | Capital     |  |   | Deficit       |   |   | Income      |  |   | Total   |  
|                                               |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|Balance at February 11, 2005 (inception)       |             |  | $ |          |  | $ |            |  | $ |              |   | $ |            |  | $ |        |  
|                                               |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|February 2005, common stock sold to an         |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|officer ($.001/share) (Note 2)                 | 4,000,000    |  |   | 4,000     |  |   |            |  |   |              |   |   |            |  |   | 4,000   |  
|April 2005 through May 2005, common            |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|($.01/share) (Note 4)                          | 2,400,000    |  |   | 2,400     |  |   | 21,600      |  |   |              |   |   |            |  |   | 24,000  |  
|stock sold in private
      placement offering |              |  |   |           |  |   |             |  |   |               |   |   |            |  |   |        |  
|Office space and administrative support        |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|contributed by an
      officer (Note 2)       |             |  |   |          |  |   | 350         |  |   |              |   |   |            |  |   | 350     |  
|Net loss, period ended May 31, 2005            |             |  |   |          |  |   |            |  |   | (5,006        | ) |   |            |  |   | (5,006  | )
|                                               |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|Balance at May 31, 2005                        | 6,400,000    |  |   | 6,400     |  |   | 21,950      |  |   | (5,006        | ) |   |            |  |   | 23,344  |  
|                                               |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|Office space and administrative support        |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|contributed by an
      officer (Note 2)       |             |  |   |          |  |   | 1,400       |  |   |              |   |   |            |  |   | 1,400   |  
|Comprehensive loss:                            |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|Net loss, year ended                           |              |  |   |           |  |   |             |  |   |               |   |   |             |  |   |         |  
|February 28, 2006                              |             |  |   |          |  |   |            |  |   | (21,639       | ) |   |            |  |   | (21,639 | )
|Cumulative translation
      adjustment        |             |  |   |          |  |   |            |  |   |              |   |   | 152         |  |   | 152     |  
|Comprehensive loss                             |             |  |   |          |  |   |            |  |   |              |   |   |            |  |   | (21,487 | )

F-4

---

|Balance at May 31, 2006                     | 6,400,000 |  |   | 6,400 |  |   | 23,350 |  |   | (26,645  | ) |   | 152   |   |   | 3,257   |  
|------------------------------------------- | --------- |  | - | ----- |  | - | ------ |  | - | -------- | - | - | ----- | - | - | ------- | -
|                                            |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|July 2006, common stock sold pursuant       |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|to Form SB-2 registered offering at         |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|$.05/share, net of
      $5,000 of offering |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|costs (Note 4)                              | 1,090,000 |  |   | 1,090 |  |   | 48,410 |  |   |         |   |   |      |   |   | 49,500  |  
|Administrative support contributed          |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|by an officer (Note 2)                      |          |  |   |      |  |   | 200    |  |   |         |   |   |      |   |   | 200     |  
|Comprehensive loss:                         |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|Net loss, year ended                        |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|May
      31, 2007                          |          |  |   |      |  |   |       |  |   | (53,653  | ) |   |      |   |   | (53,653 | )
|Cumulative translation adjustment           |          |  |   |      |  |   |       |  |   |         |   |   | 954   |   |   | 954     |  
|Comprehensive loss                          |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   | (52,699 | )
|                                            |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|Balance at May 31, 2007                     | 7,490,000 |  |   | 7,490 |  |   | 71,960 |  |   | (80,298  | ) |   | 1,106 |   |   | 258     |  
|                                            |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|Office space and administrative support     |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|contributed by an officer (Note 2)          |          |  |   |      |  |   | 2,600  |  |   |         |   |   |      |   |   | 2,600   |  
|Comprehensive loss:                         |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|Net loss, year ended                        |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   |         |  
|May
      31, 2008                          |          |  |   |      |  |   |       |  |   | (20,279  | ) |   |      |   |   | (20,279 | )
|Cumulative translation adjustment           |          |  |   |      |  |   |       |  |   |         |   |   | (944  | ) |   | (944    | )
|Comprehensive loss                          |           |  |   |       |  |   |        |  |   |          |   |   |       |   |   | (21,223 | )
|Balance at May 31, 2008                     | 7,490,000 |  | $ | 7,490 |  | $ | 74,560 |  | $ | (100,577 | ) | $ | 162   |   | $ | (18,365 | )

See accompanying notes to financial statements

F-5

---

|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Statements of Cash Flows      

|                                                        |   |                     |   |   |         |   |   | February 11, 2005 |  
|------------------------------------------------------- | - | ------------------- | - | - | ------- | - | - | ----------------- | -
|                                                        |   |                     |   |   |         |   |   | (Inception)       |  
|                                                        |   | For The Years Ended |   |   | Through |  
|                                                        |   | May 31,             |   |   | May 31, |  
|                                                        |   | 2008                |   |   | 2007    |   |   | 2008              |  
|Cash flows from operating activities:                   |   |                     |   |   |         |   |   |                   |  
|Net loss                                                | $ | (20,279             | ) | $ | (53,653 | ) | $ | (100,577          | )
|Adjustments to reconcile net loss to
      net cash     |   |                     |   |   |         |   |   |                   |  
|used in operating activities:                           |   |                     |   |   |         |   |   |                   |  
|Office
      space and administrative support           |   |                     |   |   |         |   |   |                   |  
|contributed by an officer (Note 2)                      |   | 2,600               |   |   | 200     |   |   | 4,550             |  
|Changes in operating assets and liabilities:            |   |                     |   |   |         |   |   |                   |  
|Accounts payable and
      accrued liabilities          |   | 15,418              |   |   | (3,582  | ) |   | 18,418            |  
|Net cash used in                                        |   |                     |   |   |         |   |   |                   |  
|operating activities                                    |   | (2,261              | ) |   | (57,035 | ) |   | (77,609           | )
|                                                        |   |                     |   |   |         |   |   |                   |  
|Cash flows from financing activities:                   |   |                     |   |   |         |   |   |                   |  
|Proceeds from the sale of common stock                  |   |                    |   |   | 54,500  |   |   | 82,500            |  
|Payments for offering
      costs                       |   |                    |   |   |        |   |   | (5,000            | )
|Net cash provided by                                    |   |                     |   |   |         |   |   |                   |  
|financing
      activities                              |   |                    |   |   | 54,500  |   |   | 77,500            |  
|                                                        |   |                     |   |   |         |   |   |                   |  
|Net change in cash                                      |   | (2,261              | ) |   | (2,535  | ) |   | (109              | )
|                                                        |   |                     |   |   |         |   |   |                   |  
|Effect of exchange rate changes on cash                 |   | (944                | ) |   | 954     |   |   | 162               |  
|                                                        |   |                     |   |   |         |   |   |                   |  
|Cash, beginning of year                                 |   | 3,258               |   |   | 4,839   |   |   |                  |  
|                                                        |   |                     |   |   |         |   |   |                   |  
|Cash, end of year                                       | $ | 53                  |   | $ | 3,258   |   | $ | 53                |  
|                                                        |   |                     |   |   |         |   |   |                   |  
|Supplemental disclosure of cash flow
      information: |   |                     |   |   |         |   |   |                   |  
|Cash paid during the year for:                          |   |                     |   |   |         |   |   |                   |  
|Income taxes                                            | $ |                    |   | $ |        |   | $ |                  |  
|Interest                                                | $ |                    |   | $ |        |   | $ |                  |  

See accompanying notes to financial statements

F-6

---

|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Notes to Financial Statements 

(1) Summary of Significant Accounting Policies

Organization and Basis of Presentation

China Health Care Corporation (the Company) was incorporated
in the state of Wyoming on February 11, 2005 to engage in the acquisition,
exploration and development of mineral properties. The Company is in the
exploration stage in accordance with Industry Guide 7. On April 25, 2005, the
Company entered into an option agreement to acquire 100 percent of the right,
title and interest in mineral claims located in northeast Ontario, Canada.

On May 13, 2008, the Secretary of State of Wyoming effected a
change of our Companys name from The Cavalier Group to China Health Care
Corporation, as approved by our shareholders.

The accompanying financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As shown in the
accompanying financial statements, the Company has a limited operating history,
limited funds and a working capital deficit. These factors, among others, may
indicate that the Company will be unable to continue as a going concern.

Managements plan is to acquire interests in certain mining
claims and explore for minerals. The Companys future success is primarily
dependent upon the existence of minerals on the property for which the Company
owns an option to acquire claims. No minerals have yet been discovered on the
property. The Companys success will also be dependent upon its ability to raise
sufficient capital to fund its exploration program and, if minerals are
discovered, to mine the discovery on a timely and cost-effective basis. If
managements plan is not successful, the Company may look to acquire or merge
with another private operating company (see Note 7).

The financial statements do not include any adjustments
relating to the recoverability and classification of assets and/or liabilities
that might be necessary should the Company be unable to continue as a going
concern. Our continuation as a going concern is dependent upon our ability to
meet our obligations on a timely basis, and, ultimately to attain
profitability.

Use of Estimates

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

Functional Currency

The Companys functional currency is the Canadian dollar;
however, the accompanying financial statements and footnotes refer to United
States (U.S.) dollars unless Canadian dollars are specifically designated with
CDN.

Cash and Cash Equivalents

The Company considers all highly liquid securities with
original maturities of three months or less when acquired to be cash
equivalents. There were no cash equivalents at May 31, 2008.

Financial Instruments

At May 31, 2008, the fair value of the Companys financial
instruments approximate their carrying value based on their terms and interest
rates.

F-7

---

|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Notes to Financial Statements 

Mineral Interests

Mineral interest acquisition costs include cash consideration
and the estimated fair value of common shares issued for mineral properties,
based on recent share issuances. Exploration and development expenditures are
expensed in the period incurred until such time as the Company establishes the
existence of commercial feasibility, at which time these costs will be deferred.
Administrative expenditures are expensed in the period incurred.

Mineral interest acquisition costs and related interest and
financing costs may be deferred until the property is placed into production,
sold or abandoned. Mineral interest acquisition costs will be deferred only when
and if proven and probable reserves have been found to exist. No proven or
probable reserves are currently known to exist.

Any deferred costs will be amortized on a unit-of-production
basis over the estimated proven and probable reserves of the property following
commencement of commercial production or written off if the property is sold,
allowed to lapse or abandoned.

Earnings (Loss) per Common Share

The Company reports loss per share using a dual presentation of
basic and diluted loss per share. Basic loss per share excludes the impact of
common stock equivalents. Diluted loss per share utilizes the average market
price per share when applying the treasury stock method in determining common
stock equivalents. At May 31, 2008, there were no variances between the basic
and diluted loss per share as there were no potentially dilutive securities
outstanding.

Income Taxes

The Company accounts for income taxes under the provisions of
SFAS No. 109, Accounting for Income Taxes(SFAS 109). SFAS 109 requires
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse.

Foreign Currency Translation

The accounts of the Companys foreign operations have been
translated into United States dollars. Assets and liabilities of those
operations are translated in U.S. dollars using exchange rates as of the balance
sheet date; income and expenses are translated using the average exchange rates
for the reporting period. Translation adjustments are deferred in accumulated
other comprehensive income (loss), a separate component of shareholders
deficit.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements, which clarifies the definition of fair value, establishes a
framework for measuring fair value within GAAP and expands the disclosures
regarding fair value measurements. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007. In
February 2008, the FASB issued FSP 157-2 Partial Deferral of the Effective Date
of Statement 157 (FSP 157-2). FSP 157-2 delays the effective date of SFAS 157,
for all nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually) to fiscal years beginning after November 15, 2008.

In February 2007, the Financial Accounting Standards Board
(FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115
(SFAS 159). SFAS No. 159 permits entities to choose to measure many financial
instruments and certain other items at fair value. This provides entities with
the opportunity to mitigate volatility in reported earnings caused by

F-8

---

|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Notes to Financial Statements 

measuring related assets and liabilities differently without
being required to apply complex hedge accounting provisions. The provisions of
SFAS No. 159 are effective as of the beginning of fiscal years that start after
November 15, 2007 (fiscal year March 31, 2009).

Effective March 26, 2007, we adopted FASB Interpretation No.
48, Accounting for Uncertainty in Income Taxesan Interpretation of FASB
Statement 109(FIN 48). FIN 48 requires that a position taken or expected
to be taken in a tax return be recognized in the financial statements when it is
more likely than not (i.e. a likelihood of more than fifty percent) that the
position would be sustained upon examination by tax authorities. A recognized
tax position is then measured at the largest amount of benefit that is greater
than fifty percent likely of being realized upon ultimate settlements. Upon
adoption, the Company does not have any material uncertain tax positions.

In March 2008, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards 161, Disclosures
about Derivative Instruments and Hedging Activities", which amends the
disclosure requirements of SFAS 133. SFAS 161 provides an enhanced
understanding about how and why derivative instruments are used, how they are
accounted for and their effect on an entitys financial position, performance
and cash flows. SFAS 161, which is effective for fiscal years beginning after
November 15, 2008, will require additional disclosure in future filings, but
will have no financial impact to the Companys results of operations, cash flows
or financial position.

The adoption of these pronouncements has
not made a material effect on the Companys financial position or results of
operations.

(2) Related Party Transactions

On October 23, 2007, the Companys president loaned the Company
$5,000 in exchange for a promissory note. The note carries a five percent
interest rate and matures on October 23, 2008. Accrued interest payable on the
note totaled $151 at May 31, 2008.

The Companys president contributed office space to the Company
for the year ended May 31, 2008. The office space was valued at $200 per month
based on the market rate in the local area and is included in the accompanying
financial statements as contributed rent expense with a corresponding credit to
additional paid-in capital.

The president contributed administrative services to the
Company for the periods presented. The time and effort was recorded in the
accompanying financial statements based on the prevailing rates for such
services, which equaled $50 per hour based on the level of services performed.
The services are reported as contributed administrative services with a
corresponding credit to additional paid-in capital.

The Companys president contributed office space to the Company
from inception through May 31, 2006. The office space was valued at $100 per
month based on the market rate in the local area and is included in the
accompanying financial statements as contributed rent expense with a
corresponding credit to additional paid-in capital.

In February 2005, the Company sold 4,000,000 shares of its
restricted common stock to its president for $4,000 ($.001/share).

(3) Option Agreement on Mineral Interests

Casa Claims Option Agreement (formerly referred to as the
Mineta Resources Ltd. Option Agreement)

On April 25, 2005, the Company entered into an option agreement
to acquire 100 percent of the right, title and interest in a mineral claim
located in northeast Ontario, Canada. On November 30, 2006, the parties amended
the agreement due to delay the second phase of exploration from October 31, 2007
to October 31, 2008 and to increase

F-9

---

|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Notes to Financial Statements 

the work commitment from $120,000 to $130,000, which increased
the total work commitment from $150,000 to $160,000.

Under the terms of the Option Agreement, the Company is
required to:

| | A. | Make option exploration expenditures as
  follows:
| | -- | --------------------------------------------------

|Exploration
      Expenditures |   |            |  |  
|------------------------------ | - | ---------- |  | -
|                               |   | Due Date   | 
|CDN                            | $ | 30,000.00  |  | *
|CDN                            |   | 130,000.00 |  |  
|                               | $ | 160,000.00 |  |  

| | B. | Make annual payments of CDN$50,000, commencing January 1,
      2009, as long as the Company held any interest in the
  claim.
| | -- | ------------------------------------------------------------------------------------------------------------------------------

|* | During the three months ended November 30, 2006, the
      Company incurred CDN$22,790 (US$20,603) for exploration expenditures under
      the option agreement. In April 2007, the Company obtained a waiver for the
      requirement to expend CDN$30,000 by October 31,
2006.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition to the above terms, the optionor is to retain a
three percent net smelter royalty.

(4) Shareholders Equity

The Company filed a Form SB-2 registration statement with the
SEC on July 29, 2005 to offer up to 2,000,000 shares of the Companys common
stock at a price of $0.05 per share. The registration statement became effective
on January 31, 2006. During July 2006, the Company sold 1,090,000 common shares
pursuant to the registration statement for net proceeds of $49,500, after
deducting $5,000 of offering costs.

Between April 2005 and May 2005, the Company offered for sale
3,000,000 shares at of its common stock at a price of $0.01 per share. The
Company closed the offering after selling 2,400,000 shares for gross proceeds of
$24,000. The offering was made in reliance on an exemption from registration of
a trade in the United States under Rule 903 of Regulation S of the United States
Securities Act of 1933, as amended.

(5) Income Taxes

A reconciliation of the U.S. statutory federal income tax rate
to the effective tax rate is as follows:

|                                    |  | May 31, | 
|----------------------------------- |  | ------- | 
|                                    |  | 2008    | 
|U.S. statutory federal rate         |  | 15.00%  | 
|Contributed rent and services       |  | -0.15%  | 
|Net operating loss for which no tax |  |         | 
|benefit is currently available      |  | -14.85% | 
|                                    |  | 0.00%   | 

F-10

---

|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Notes to Financial Statements 

|                         |   | May 31, |  
|------------------------ | - | ------- | -
|                         |   | 2008    |  
|Deferred tax assets      | $ | 3,012   |  
|Deferred tax liabilities |   | -       |  
|Valuation allowance      |   | (3,012  | )
|                         | $ | -       |  

At May 31, 2008, deferred tax assets consisted of a net tax
asset of $15,109, due to operating loss carryforwards of $98,427 which was fully
allowed for, in the valuation allowance of $15,109. The valuation allowance
offsets the net deferred tax asset for which there is no assurance of recovery.
The net operating loss carryforward expires through the year 2028.

The valuation allowance will be evaluated at the end of each
year, considering positive and negative evidence about whether the deferred tax
asset will be realized. At that time, the allowance will either be increased or
reduced; reduction could result in the complete elimination of the allowance if
positive evidence indicates that the value of the deferred tax assets is no
longer impaired and the allowance is no longer required.

Should the Company undergo an ownership change as defined in
Section 382 of the Internal Revenue Code, the Companys tax net operating loss
carryforwards generated prior to the ownership change will be subject to an
annual limitation, which could reduce or defer the utilization of these
losses.

(6) Notes Payable

On September 18, 2007, an investor loaned the Company $5,000 in
exchange for a promissory note. The note carries a five percent interest rate
and matures on September 18, 2008.

On January 14, 2008, an investor loaned the Company $5,000 in
exchange for a promissory note. The note carries a five percent interest rate
and matures on January 14, 2009.

Accrued interest payable on the notes totaled $267 at May 31,
2008.

(7) Share Exchange Agreement

On January 20, 2008, the Company entered into a share exchange
agreement with United Premier Medical Group, a Cayman corporation, and the
shareholders of United Premier Medical Group. Pursuant to the terms of the share
exchange agreement, the Company has agreed to acquire all of the issued and
outstanding shares of United Premier Medical Groups common stock in exchange
for the Companys issuance of 42,658,000 shares of its common stock to the
shareholders of United Premier Medical Group.

Business of United Premier Medical Group

United Premier Medical Group is principally engaged in the
business of infrastructure investment in boutique units in hospitals or medical
centers of its business partners and providing hospital management and medical
consultation services through cooperation with hospitals and medical
institutions in the Peoples Republic of China and Macau on one hand and
strategic alliances with medical institutions in the United States and
experienced healthcare experts and medical consultants on the other hand.

Terms and Conditions of the Share Exchange Agreement

The following is a brief description of the terms and
conditions of the share exchange agreement that are material to the Company:

F-11

---

|China Health Care Corporation 
|------------------------------
|(Formerly The Cavalier Group) 
|(An Exploration Stage Company)
|Notes to Financial Statements 

|1. | The representations and warranties of United Premier
      Medical Group, its shareholders and the Company set forth in the share
      exchange agreement remain true, correct and complete in all respects as of
      the closing;                                                       
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                              
|2. | All of the covenants and obligations that the respective
      parties are required to perform or to comply with pursuant to the share
      exchange agreement at or prior to the closing must have been performed and
      complied with in all material respects;                        
|   |                                                                                                                                                                                                                                                                                              
|3. | United Premier Medical Group and the Company having
      received duly executed copies of all third party consents and approvals
      contemplated by the share exchange agreement, if any;                                                                                                
|   |                                                                                                                                                                                                                                                                                              
|4. | United Premier Medical Group and the Company having been
      reasonably satisfied with their due diligence investigations of the other
      party that is reasonable and customary in a similar transaction;                                                                              
|   |                                                                                                                                                                                                                                                                                              
|5. | United Premier Medical Group will have delivered to the
      Company audited financial statements prepared in accordance with United
      States GAAP and audited by an independent auditor registered with the
      Public Company Accounting Oversight Board in the United States;
  and
|   |                                                                                                                                                                                                                                                                                              
|6. | The Company will adopt resolutions appointing nominees of
      United Premier Medical Group to the board of directors of the
    Company.                                                                                                                                                   

Due to conditions precedent to closing, including but not
limited to those set out above, and the risk that these conditions precedent
will not be satisfied, there is no assurance that we will complete the share
exchange.

F-12

---

Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure

There were no disagreements related to accounting principles or
practices, financial statement disclosure, internal controls or auditing scope
or procedure during the two fiscal years and interim periods, including the
interim period up through the date the relationship ended.

Item 9A(T). Controls and Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our principal
executive officer (our president) and our principal accounting and financial
officer (our chief financial officer) to allow for timely decisions regarding
required disclosure. In designing and evaluating our disclosure controls and
procedures, our management recognizes that any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and our management is required to
apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures.

Our management does not expect that our disclosure controls or
our internal controls over financial reporting will prevent all error and fraud.
A control system, no matter how well conceived and operated, can provide only
reasonable, but no absolute, assurance that the objectives of a control system
are met. Further, any control system reflects limitations on resources, and the
benefits of a control system must be considered relative to its costs. These
limitations also include the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people or by management override of a
control. A design of a control system is also based upon certain assumptions
about potential future conditions; over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
may not be detected.

As of May 31, 2008, the year end period covered by this report,
we carried out an evaluation, under the supervision and with the participation
of our management, including our principal executive officer and our principal
accounting officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our president and
our chief financial officer concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this annual
report.

There have been no significant changes in our internal controls
over financial reporting that occurred during the fiscal year ended May 31, 2008
that have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

Management's Report on Internal Control over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act. Our management has employed a framework
consistent with Exchange Act Rule 13a-15(c), to evaluate our internal control
over financial reporting described below. Our internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation and fair presentation of
financial statements for external purposes in accordance with generally accepted
accounting principals.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

27

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Management conducted an evaluation of the design and operation
of our internal control over financial reporting as of May 31, 2008 based on the
criteria set forth in Internal Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. As a result of
this assessment, management concluded that, as of May 31, 2008, our internal
control over financial reporting was effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.

This annual report does not include an attestation report of
the company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the company to provide only
management's report in this annual report.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate
Governance

The following individuals serve as the directors and executive
officers of our company as of the date of this annual report. All directors of
our company hold office until the next annual meeting of our shareholders or
until their successors have been elected and qualified. The executive officers
of our company are appointed by our board of directors and hold office until
their death, resignation or removal from office.

|Name                | Position Held with Our Company | Age | Date First Elected or Appointed
|------------------- | ------------------------------ | --- | -------------------------------
|Henry J. Macfarland | Chief Executive Officer        | 59  | July 24, 2008                  
|Edwin Chan          | Chief Financial Officer        | 43  | July 24, 2008                  
|Kenneth Lee         | Chief Operating Officer        | 46  | July 24, 2008                  
|Wong Yuen Yee       | Director                       | 46  | July 24, 2008                  
|Wong Yao Wing       | Director                       | 50  | July 24, 2008                  
|Andrew B. Kramer    | Director                       | 46  | July 24, 2008                  

Business Experience

The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee of our company, indicating the persons principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.

28

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Henry J. Macfarland, Chief Executive Officer

Henry Macfarland has over 35 years of experience in senior
healthcare administration in the United States and China. Mr. Macfarland was
hired as the Senior Vice President of United Premier Medical Group (HK), Limited
between 2003 to 2006 to manage the VIP Maternity & GYN Centers in China . He
provided professional consulting services and strategic directions for the
group. Prior to this position, he worked in various sectors of the medical field
in the United States, providing his professional knowledge and leadership to
healthcare management. He was the President/CEO of Terrebonne General Medical
Center in Louisiana from 2000 to 2003; Executive Director of the Baylor Medical
Center in Irving, Texas from 1995 to 2000; and Senior Vice President/Chief
Operating Officer of Irving Healthcare System from 1989 to 1995; Associate
Administrator Memorial City Medical Center, Houston, Texas, from 1976 to
1989; Prior to his healthcare career, Mr. Macfarland served as a commissioned
officer in the US Navy and was designated a Surface Warfare Officer from 1971 to
1973.

Mr. Macfarland has also served numerous professional and
community groups in roles such as Chairman of the American College of Healthcare
Executives/Houston Chapter in 1984; Fellow member of the American College of
Healthcare Executives since 1987; Regional Chairman of the American Heart
Association Heart Walk in 2002; Chairman of Irving YMCA from 1995 to 1996; and
Development Chairman of Irving YMCA at Northlake in 1997.

Mr. Macfarland obtained his Master of Health Administration
from Washington University in 1976 and a Bachelor of Arts, Psychology from
Kansas University in 1971.

Kenneth Lee, M.D., Chief Operating Officer

Dr. Kenneth Lee has over 17 years of experience working in
various sectors of the healthcare industry in the United States, mainland China
and Macao. Prior to his current position, he was the Chief Operating Officer of
the University Hospital of Macau University of Science and Technology
Foundation. Before joining United Premier Medical Group, he was the founder and
Chief Executive Officer of American-Sino Human Resources Internationalization
and Consulting, Ltd, a PRC wholly foreign-owned enterprise. He also served as
Medical Director of Huashan Hospital American-Sino OB/GYN Services (ASOG) in
Shanghai and Senior Management Consultant for ASOG in Beijing. Prior to moving
to China, he was the Regional Care Management Medical Director for United Health
Group, the largest health insurance company in the United States. He has also
served on the Board of Managers for the Northern Ohio Alliance for Health, Ltd.,
an 11-hospital coalition, providing managed care leadership. Dr. Lee has also
served as the Director of the Resurrection Healthcare Family Medicine Residency
program in Chicago. In the early 1990s, Dr. Lee was also the founder and
Managing Director of a single specialty group practice in Ohio, USA.

Dr. Lee obtained his doctor of medicine (M.D.) degree from the
Medical University of Ohio and graduate degrees in Master of Business
Administration (MBA) and Master of Public Health (MPH) from the University of
South Florida. In addition, he is board certified in family medicine (FAAFP),
managed care medicine (CMCM) and as certified physician executive (CPE) by the
American College of Physician Executive.

Edwin Chan, Chief Financial Officer

Mr. Edwin Chan was a director of Biopack Environmental
Solutions Inc. (a publicly listed OTC Bulletin Board company) from March 2007 to
March 2008 and was the chief financial officer of the company for the third
quarter of 2007, where he was responsible for financial reporting, corporate
finance and investment analysis of the company. From 2004 to 2006, Mr. Chan was
a Senior Manager at China Everbright Securities (HK) Limited, a PRC-based
investment banking firm, where he was responsible for sales and brokerage of
securities to institutional investors in the Greater China Region. From 2002 to
2004, he was the Senior Manager (Business Valuation) of Vigers Appraisal &
Consulting Limited. From 2000 to 2002, Mr. Chan was the Research Manager for
Asia Financial Securities Limited.

Mr. Chan was awarded an MBA degree in 1999 from the Schulich
School of Business, York University, Canada, with a specialization in Corporate
Finance, Investment and Financial Management. He has also obtained an LL.B.

29

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degree from Tsinghua University in the Peoples Republic of
China, a Bachelor of Science degree from the Chinese University of Hong Kong and
a postgraduate certificate in Education from the University of Hong Kong.

Wong Yuen Yee, Director

Ms. Y. Y. Wong has over fifteen years of practical business
experience in the PRC. She is responsible for the overall strategic planning and
development of UPMG. In addition to the position held at UPMG, Ms. Wong founded
Inno-tech Holdings Ltd. (8202.HK), which was successfully listed in the Hong
Kong Growth Enterprise Market (GEM) market in 2002. Ms. Wong is the Chairman
of Inno-Tech Holdings Ltd. - a listed company on the Share Exchange of Hong Kong
focusing on sales and marketing of innovative smart home products in the PRC and
also the acquisition, development and management of budget hotels in the PRC.
Ms. Wong graduated from the University of Hong Kong with a Bachelor of Social
Science degree and a Masters degree in Business Administration. She is
enthusiastic about the welfare of Chinas women and children. Ms. Wong is a
Director of the Shanghai Soong Ching Ling Foundation. The foundation is
dedicated to developing the welfare of Chinese women and children.

Wong Yao Wing, Director

Mr. Robert Wong is a typical entrepreneur who founded his first
IT business in Hong Kong 15 years ago. His IT business was proven a great
success and was soon acquired by Legend Holdings Limited. Subsequently, Mr. Wong
joined HealthAnswers Inc. - a U.S. based comprehensive and integrated health
communications company providing health information and service to patients
through the continuum of healthcare, and set up the Asia Division of
HealthAnswers. Mr. Wongs tenure at HealthAnswers granted him good exposure of
the healthcare industry in the region. After then, Mr. Wong founded Inno-tech
Holdings Ltd. (8202.HK), which was successfully listed in the Hong Kong GEM
market in 2002. Mr. Wong is now the Deputy Chairman of the company. Mr. Wong
graduated from the University of Hong Kong with a Bachelor of Science Honor
degree, a Certification of Education and a Masters degree in Business
Administration. Mr. Wong received the Chief Executives Commendation for
Community Service in July 2005.

Andrew B. Kramer, Director

Mr. Andrew Kramer is a Registered Investment Advisor. He is
President and Portfolio Manager at Kramer Capital Management an investment firm
managing over 100 million dollars. Mr. Kramer has been an investment
professional for over twenty years the last 15 he has been associated with Third
Avenue Management, the value investment firm founded by the legendary value
investor Martin J. Whitman. In addition to Kramers duties at Kramer Capital he
chairs The Board of Trustees of a 12 million dollar annual budget non profit
organization and is a board member of various private companies. He was a
graduate of Colgat University 1984 with a double major in English and
History.

Significant Employees

Daisy Sin, Director -VIP Maternity & GYN Centers

Daisy Sin has over 12 years experience in private healthcare
organizations in Hong Kong, Macau and China. Ms Sin joined United Premier
Medical Group (UPMG) in 2003 and was the founder of the VIP Maternity & GYN
Centers in the main cities of China including: Shanghai, Guangzhou, Wuxi,
Foshan, Changsha, Xiamen and Hangzhou. In September 2006, she was seconded by
the group to University Hospital, Macau as the Deputy Chief Operating Officer.
She was also the founder of the International Medical Center, Executive Health
Management Center, Medical Skin & Laser Center, Integrated Rehab Service
Center and Sleep Disorder Management Center of the Hospital. Before joining
UPMG, Ms. Sin was the Administration Manager of Quality HealthCare Asia Ltd.,
the first listed healthcare company on the Stock Exchange of Hong Kong.

Xiu-sheng Cheng, Director -Government & Legal
Affairs

Xiu-sheng Cheng has over 26 years of China healthcare
experiences in clinical medicine, healthcare administration and management for
various hospitals, health bureau administrative organizations and medical
foundations. He was

30

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also one of the Founders of International Medical Network
Center (IMNC) of the China Medical Foundation. Prior to his current position,
Mr. Cheng was the Deputy General Manager of Shanghai Distance Learning Medical
Network Co., Ltd., and the Information Center of Shanghai Health Bureau. Prior
to 2003, he was the Executive Vice Secretary-General of IMNC. Mr. Cheng was the
Vice President of American Brother Industrial Co., Ltd. and concurrent board
member and Vice President of Shanghai Huawang Technic & Trade Co., Ltd. In
the early 1990s, he undertook the positions of Doctor-in-charge and Deputy
Director in Health Bureau administrative organizations and Class3A hospitals.
Mr. Cheng graduated from the top Fudan University (formally Shanghai Medical
University) in Shanghai with a Bachelor degree of Social Medicine and Healthcare
Administration and a MBA degree of Healthcare Economics. He was awarded a
scholarship by the Chinese Medical Association in USA.

Faith Lam, Director  Accounting & Procurement

Faith Lam has had a long career in Auditing since 1990. In
1994, he joined Deloitte Touche Tohmatsu, one of top four auditing firms in Hong
Kong. Prior to joining our group, Mr. Lam was a government qualified accountant
of a public company listed on the main board of the Stock Exchange of Hong Kong.
Mr. Lam graduated from Hong Kong Shue Yan College (the predecessor of Hong Kong
Shue Yan University) in 1990 majoring in Accounting. He is a Certified Public
Accountant of the Hong Kong Institute of Certified Public Accountants and a
fellow member of The Association of Chartered Certified Accountants.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons has been involved in any of the following events during the past five
years:

|1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                               
|2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding, excluding traffic violations and other
      minor offences;                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                               
|3. | being subject to any order, judgment or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
|   |                                                                                                                                                                                                                                                                                                                               
|4. | being found by a court of competent jurisdiction in a
      civil action, the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated.              

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors and persons who own more than 10% of our
common stock to file with the Securities and Exchange Commission initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
greater than 10% shareholders are required by the SEC regulations to furnish us
with copies of all Section 16(a) reports that they file.

Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that during fiscal year ended May 31, 2008, all filing requirements applicable
to our officers, directors and greater than 10% percent beneficial owners were
complied with, with the exception of the following:

31

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|Name                | Number of Late
      Reports | Number of Transactions
      Not Reported on a Timely Basis | Failure to File
      Required Forms
|------------------- | ---------------------------- | ----------------------------------------------------------- | ------------------------------------
|Gerald W. Williams  | 2(1)                         | 2(1)                                                        | 1                                   
|Roy D. West         | 2(2)                         | 2 (2)                                                       | 1                                   
|Henry J. Macfarland | 1(3)                         | 1(3)                                                        | 1                                   
|Edwin Chan          | 1(3)                         | 1(3)                                                        | 1                                   
|Kenneth Lee         | 1(3)                         | 1(3)                                                        | 1                                   
|Wong Yuen Yee       | 1(3)                         | 1(3)                                                        | N/A                                 
|Wong Yao Wing       | 1(3)                         | 1(3)                                                        | 1                                   
|Andrew B. Kramer    | 1(3)                         | 1(3)                                                        | 1                                   

(1) Gerald W. Williams filed a late
Form 3  Initial Statement of Beneficial Ownership of Securities and a late Form
4  Statement of Changes in Beneficial Ownership.

(2) Roy D. West filed one late Form 3 
Initial Statement of Beneficial Ownership of Securities and 1 late Form 4s -
Statement of Changes in Beneficial Ownership.

(3) The named executive officer or
director filed a late Form 3  Initial Statement of Beneficial Ownership of
Securities.

Code of Ethics

Our board of directors on April 30, 2005 adopted a formal
written Code of Business Conduct and Ethics and Compliance Program for all
officers, directors and senior employees. Our Code of Business Conduct and
Ethics and Compliance Program was filed as an exhibit to our annual report on
10-KSB filed with the Securities and Exchange Commission on August 28, 2007.

Audit Committee and Audit Committee Financial Expert

Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an "audit committee financial
expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent"
as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended.

We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or audit committees or committees
performing similar functions nor do we have a written nominating, compensation
or audit committee charter. Our board of directors does not believe that it is
necessary to have such committees because it believes the functions of such
committees can be adequately performed by our board of directors.

Item 11. Executive Compensation

The particulars of the compensation paid to the following
persons:

| | (a) | our principal executive officer;
| | --- | --------------------------------

32

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| | (b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the years
      ended May 31, 2008 and 2007; and                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                             
| | (c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the years ended May
      31, 2008 and 2007,

who we will collectively refer to as the named executive
officers of our company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:

|SUMMARY COMPENSATION TABLE                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------
|Name and Principal Position                                                                                                             
|Gerald W. Williams Former President,
      Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and
      Director (1)
|Henry J. Macfarland 
      Former Chief Executive
      Officer(2) (5)                                                                  
|Edwin Chan Chief Financial
      Officer(3)                                                                                             
|Dr. Kenneth Lee Chief Operating
      Officer(4)                                                                                        
|Wong Yuen Yee                                                                                                                           
|Wong Yao Wing                                                                                                                           
|Andrew B. Kramer                                                                                                                        

| | (1) | Mr. Williams resigned as our president, chief executive
      officer, secretary and treasurer on July 24, 2008 when Henry J. Macfarland
      was appointed as chief executive officer of our company following the
      closing of the share exchange agreement.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                    
| | (2) | On October 26, 2006, United Premier Medical Group (Hong
      Kong) Limited and American-Sino Human Resources Consulting &
      Management (Shanghai) Ltd. entered into a management service
    agreement                                                        

33

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| |     | concerning the appointment of Dr. Kenneth K. Lee as
        the Chief Operating Officer of United Premier Medical Group Limited and
        its subsidiaries and provision of related consulting services. A combined
        management and clinical service fee of about $10,355 will be paid per
        month as the sole compensation for these consulting services. There is
        no arrangement or plan in which pension, retirement or similar benefits
        under this agreement. On June 1, 2007, United Premier Medical Group International
        Limited and American-Sino Internationalization Consulting & Management
        Limited entered into a management agreement for the renewal of the agreement
        dated October 26, 2006 for the appointment of Dr. Kenneth Lee as the Chief
        Operating Officer of United Premier Medical Group Limited and its subsidiaries
        and provision of related consulting services. A combined management and
        clinical service fee of about $10,355 is paid per month as the sole compensation
        for these consulting services. There is no arrangement or plan in which
        pension, retirement or similar benefits under this agreement.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (3) | On October 15, 2007, United Premier Medical Group Limited
        and Stonebridge Healthcare Consulting, LLC entered into a consulting agreement
        concerning the engagement of Mr. Henry J. Macfarland as the Chief Executive
        Officer of United Premier Medical Group Limited and its subsidiaries and
        provision of related consulting services. An hourly fee of $150 but not
        to exceed a maximum of $1,200 per day is paid as the sole compensation
        for these consulting services. There is no arrangement or plan in which
        pension, retirement or similar benefits under this agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (4) | On November 1, 2007, UPMG (International) Limited and
        Asset Spring Investments Ltd. entered into a consulting agreement concerning
        the engagement of Mr. Chan Kam-fai, Edwin as the Chief Financial Officer
        of United Premier Medical Group Limited and its subsidiaries and provision
        of related consulting services. A monthly consulting fee of about $4,493
        is paid as the sole compensation for these consulting services. There
        is no arrangement or plan in which pension, retirement or similar benefits
        under this agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (5) | On October 1, 2008,
      Mr. Macfarland resigned as our Chief Executive Officer. As a result of Mr.
      Macfarland’s resignation we appointed Mr. Siew Man Pang. On October
      1, 2008, the Company entered into an employment agreement with Mr. Siew
      Man Pang as the Chief Executive Officer of the Company and its subsidiaries
      with a monthly compensation of $15,384 plus two months salary as the bonus.
      Mr. Pang is also entitled to a total of 500,000 share options of the Company
      exercisable at $0.70 after the first anniversary of his employment with
      the Company. There is no arrangement or plan in which pension, retirement
      or similar benefits under this agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

We have not entered into any employment agreement or consulting
agreements with our directors. There are no arrangements or plans in which we
provide pension, retirement or similar benefits for directors or executive
officers. Our directors and executive officers may receive share options at the
discretion of our board of directors in the future. We do not have any material
bonus or profit sharing plans pursuant to which cash or non-cash compensation is
or may be paid to our directors or executive officers, except that share options
may be granted at the discretion of our board of directors.

Stock Option Plan

Mr. Siew Man
  Pang, the Chief Executive Officer of the Company is entitled to a total of 500,000
  share options of the Company exercisable at $0.70 after the first anniversary
  of his employment with the Company, i.e. October 1, 2009. We do not have any
  other stock option plan in favor of our directors, other officers, consultants
  or employees of our company.

Stock Options/SAR Grants

We did not grant any options or stock appreciation rights
during our fiscal year ended May 31, 2008.

Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Values

There were no options exercised during our fiscal year ended
May 31, 2008 by any officer or director of our company.

Compensation of Directors

We do not have any agreements for compensating our directors
for their services in their capacity as directors, although such directors are
expected in the future to receive stock options to purchase shares of our common
stock as awarded by our board of directors.

34

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Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an "audit committee financial
expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent"
as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended.

We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or audit committees or committees
performing similar functions nor do we have a written nominating, compensation
or audit committee charter. Our board of directors does not believe that it is
necessary to have such committees because it believes the functions of such
committees can be adequately performed by our board of directors.

We have determined that Wong Yuen Yee, Wong Yao Wing and Andrew
B. Kramer are independent directors, as that term is used in Item 7(d)(3)(iv)(B)
of Schedule 14A under the Securities Exchange Act of 1934, as amended,
and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.

Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of our directors or executive officers or any associate or
affiliate of our company during the last two fiscal years, is or has been
indebted to our company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.

Family Relationships

There are no family relationships between any of our directors,
executive officers or directors.

Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters

The following table sets forth, as of August 28, 2008, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated.

|Name and Address of Beneficial Owner                                              | Title of
      Class | Amount and Nature
      of Beneficial Ownership | Percentage
      of Class(1)
|--------------------------------------------------------------------------------- | -------------------- | ----------------------------------------------- | ----------------------------
|Andrew B. Kramer 622 Third Avenue 32nd Floor
      New York, NY 10017             | Common Share         | 262,000                                         | 0.52%                       
|Wong Yuen Yee Flat E, 12/F, Monticello, 48 Kennedy
      Road, Wanchai, Hong Kong | Common Share         | 1,287,587                                       | 2.57%                       

35

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|Name and Address of Beneficial Owner                                                                             | Title of
      Class | Amount and Nature
      of Beneficial Ownership | Percentage
      of Class(1)
|---------------------------------------------------------------------------------------------------------------- | -------------------- | ----------------------------------------------- | ----------------------------
|Wong Yao Wing Flat 27D, Blk 4, Tolo Place, Ma On Shan,
      Shatin, N.T. Hong Kong                              | Common Share         | 1,231,175                                       | 2.46%                       
|Directors and Executive Officers as a Group                                                                      | Common Share         | 2,780,762                                       | 5.55%                       
|Autoscale Resource Ltd. Rm 903, Tung Wai Commercial
      Building 109  111 Gloucester Road Wan Chai, Hong Kong | Common Share         | 12,000,000                                      | 23.9%                       
|Gerald W. Williams 5728  125A Street Surrey, BC
      V3X 3G8                                                   | Common Share         | 4,000,000                                       | 7.8%                        

* Less than one percent of issued and outstanding common
shares.

| | (1) | Based on 50,148,000 shares of common stock issued and
      outstanding as of August 28, 2008. Except as otherwise indicated, we
      believe that the beneficial owners of the common shares listed above,
      based on information furnished by such owners, have sole investment and
      voting power with respect to such shares, subject to community property
      laws where applicable. Beneficial ownership is determined in accordance
      with the rules of the Securities and Exchange Commission and generally
      includes voting or investment power with respect to securities. Shares of
      common stock subject to options or warrants currently exercisable, or
      exercisable within 60 days, are deemed outstanding for purposes of
      computing the percentage ownership of the person holding such option or
      warrants, but are not deemed outstanding for purposes of computing the
      percentage ownership of any other person.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Equity Compensation Plans

Mr. Siew Man
  Pang, the Chief Executive Officer of the Company is entitled to a total of 500,000
  share options of the Company exercisable at $0.70 after the first anniversary
  of his employment with the Company, i.e. October 1, 2009. We do not have any
  other stock option plan in favor of our directors, other officers, consultants
  or employees

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.

Item 13. Certain Relationships and Related Transactions, and
Director Independence

Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended February 28, 2007, in
which the amount involved in the transaction exceeded or exceeds the lesser of
$120,000 or one percent of the average of our total assets at the year end for
the last three completed fiscal years.

36

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Loan from Companies Associated with United Premier Medical
Group Limited

On June 20, 2007, Inno-Tech Holdings Limited (Innotech), a
shareholder of UPMG, loaned $772,777 (equivalent to HK$6,000,000) to UPMG for
use as working capital and the repayment date is June 22, 2008. Pursuant to an
agreement dated April 29, 2008 signed between Innotech and UPMG for the
extension of loan repayment, it is agreed that repayment of full amount of the
above-mentioned loans is extended as scheduled below:

|Date of Loan Agreement | Loan Amount ($)          | Original Repayment Date | New Repayment Date
|---------------------- | ------------------------ | ----------------------- | ------------------
|June 20, 2007          | $772,777 (HK$ 6,000,000) | June 22, 2008           | December 22, 2008 

On January 10, 2008, Innotech loaned $384,615 (equivalent to
HK$3,000,000) to UPMG with the repayment date on January 9, 2009. On January 25,
2008, Innotech loaned another $512,820 (equivalent to HK$4,000,000) to UPMG with
the repayment date on January 24, 2009. Pursuant to an agreement dated April 29,
2008 signed between Innotech and UPMG for the extension of loan repayment, it is
agreed that repayment of full amount of the above-mentioned loans is extended as
scheduled below:

|Date of Loan Agreement | Loan Amount ($)         | Original Repayment Date | New Repayment Date
|---------------------- | ----------------------- | ----------------------- | ------------------
|January 10, 2008       | $384,615 (HK$3,000,000) | January 9, 2009         | July 9, 2009      
|January 25, 2008       | $512,820 (HK$4,000,000) | January 24, 2009        | July 24, 2009     

Item 14. Principal Accounting Fees and Services

The aggregate fees billed for the most recently completed
fiscal year ended May 31, 2008 and for fiscal year ended May 31, 2007 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our quarterly reports on Form 10-QSB and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:

|                   | Year Ended  
|------------------ | ------------
|                   | May 31, 2008
|Audit Fees         | $3,500      
|Audit Related Fees | $3,000      
|Tax Fees           | Nil         
|All Other Fees     | Nil         
|Total              | $6,500      

Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.

37

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PART IV

Item 15. Exhibits, Financial Statement Schedules

|(a) | Financial Statements
|--- | --------------------
|    |                     
|    | (1)                 
|    |                     
|    | (2)                 
|    |                     
|(b) | Exhibits            

|Exhibit |                                                                                                                                                                                                                                                                                                                                                
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                
|(2)     | Plan of Purchase, Sale, Reorganization, Arrangement,
      Liquidation or Succession                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                
|2.1     | Share Exchange Agreement dated January 20, 2008, among
      our company, United Premier Medical Group and the selling shareholders of
      United Premier Medical Group as set forth in the share exchange agreement
      (incorporated by reference from our Current Report on Form 8-K filed on
      January 28, 2008)                   
|        |                                                                                                                                                                                                                                                                                                                                                
|(3)     | Articles of Incorporation and By-laws                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                
|3.1     | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form SB-2 filed on July 29, 2005)                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                
|3.2     | Bylaws (incorporated by reference from our Registration
      Statement on Form SB-2 filed on July 29, 2005)                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                                
|(10)    | Material Contracts                                                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                
|10.1    | Option To Purchase And Royalty Agreement between The
      Cavalier Group and Larry Gervais of Timmins, Ontario, dated April 25, 2005
      to acquire a 100% interest in the Casa Claim Block, Porcupine Mining
      Division, Ontario.( incorporated by reference from our Registration
      Statement on Form SB-2 filed on July 29, 2005)
|        |                                                                                                                                                                                                                                                                                                                                                
|10.2    | Code Of Business Conduct & Ethics and Compliance
      Program (incorporated by reference from our Annual Report on Form 10-KSB
      filed on August 28, 2008)                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                
|10.3    | Educational and Consulting Services Agreement between JHI
      and PMEHK dated June 15, 2002. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                
|10.4    | Licensing Agreement between JHI and PMEHK dated June 15,
      2002. (incorporated by reference from our Current Report on Form 8-K filed
      on July 31, 2008)                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                
|10.5    | Novation and Assignment Agreement for Education and
      Consulting Services Agreement between PMEHK, PMEUS and JHI. (incorporated
      by reference from our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                
|10.6    | Novation and Assignment for Licensing Agreement between
      PMEHK, PMEUS and JHI dated April 11, 2003. (incorporated by reference from
      our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                
|10.7    | Amendment to Licensing Agreement between JHI and PMEUS
      dated August 8, 2003. (incorporated by reference from our Current Report
      on Form 8-K filed on July 31, 2008)                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                
|10.8    | Second Amendment to Licensing Agreement between JHI and
      PME dated June 10, 2004. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                                                                                                                                            

38

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|Exhibit |                                                                                                                                                                                                                                                                                                               
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                               
|10.9    | First Amendment to Educational
      And Consulting Services Agreement between JHI and PME dated June 10, 2004.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)                                                                                            
|        |                                                                                                                                                                                                                                                                                                               
|10.10   | Description of Co-operative
      Agreement between IPMCHH and UPMG (U.S.) Limited dated March 31, 2005.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)                                                                                                   
|        |                                                                                                                                                                                                                                                                                                               
|10.11   | Description of Co-operative
      Agreement between IPMCHH and PMEHK dated February 2, 2004. (incorporated
      by reference from our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                               
|10.12   | Description of Co-operative
      Agreement between IPMCHH and PMEHK dated March 21, 2003. (incorporated by
      reference from our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                               
|10.13   | Description of Technical
      Exchange and Cooperative Agreement between Xiamen Maternity and Child
      Health Care Hospital and Proactive Medicare (Xiamen) Company Limited dated
      March 6, 2005. (incorporated by reference from our Current Report on Form
      8-K filed on July 31, 2008)       
|        |                                                                                                                                                                                                                                                                                                               
|10.14   | Description of Co-operative
      Agreement between Jinan Maternity and China Care Hospital and Proactive
      Medicare Enterprise (Jinan) Limited dated February 5, 2004. (incorporated
      by reference from our Current Report on Form 8-K filed on July 31, 2008)                                      
|        |                                                                                                                                                                                                                                                                                                               
|10.15   | Description of Co-operative
      Agreement between Beijing Obstetrics & Gynecology Hospital and
      Proactive Medicare (Beijing) Company Limited dated April 25, 2004.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)                                  
|        |                                                                                                                                                                                                                                                                                                               
|10.16   | Co-operative Agreement between
      Foshan Maternal and Childrens Hospital and Proactive Medicare Services
      (Hong Kong) Limited dated February 27, 2004 (incorporated by reference
      from our Current Report on Form 8-K filed on July 31, 2008)                                                   
|        |                                                                                                                                                                                                                                                                                                               
|10.17   | Description of Supplemental
      Agreement to the Co-operative Agreement between Foshan Maternal and
      Childrens Hospital and Proactive Medicare Services (Hong Kong) Limited
      dated February 27, 2004 (incorporated by reference from our Current Report
      on Form 8-K filed on July 31, 2008)
|        |                                                                                                                                                                                                                                                                                                               
|10.18   | Description of Co-operative
      Agreement betweenThe Second Affiliated Hospital of Guangzhou Medical
      College and UPMG (Guangdong) Company Limited dated November 18, 2003.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)                         
|        |                                                                                                                                                                                                                                                                                                               
|10.19   | Description of Co-operative
      Agreement between Changsha Maternity and Child Hospital and Proactive
      Medicare (Changsha) Company Limited dated July 7, 2004. (incorporated by
      reference from our Current Report on Form 8-K filed on July 31, 2008)                                            
|        |                                                                                                                                                                                                                                                                                                               
|10.20   | Supplemental Agreement to the
      Co-operative Agreement between Changsha Maternity and Child Hospital and
      Proactive Medicare (Changsha) Company Limited dated July 7, 2004.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)                       
|        |                                                                                                                                                                                                                                                                                                               
|10.21   | Description of Co-operative
      Agreement between Wuxi Maternity and Children Hospital and Proactive
      Medicare (Wuxi) Company Limited dated April 19, 2004. (incorporated by
      reference from our Current Report on Form 8-K filed on July 31, 2008)                                               
|        |                                                                                                                                                                                                                                                                                                               
|10.22   | Description of Supplemental
      Agreement to the Co-operative Agreement between Wuxi Maternity and
      Children Hospital and Proactive Medicare (Wuxi) Company Limited dated
      April 19, 2004. (incorporated by reference from our Current Report on Form
      8-K filed on July 31, 2008)           
|        |                                                                                                                                                                                                                                                                                                               
|10.23   | Technical Exchange and
      Co-operative Agreement between Hangzhou Tin Mu Shan Hospital Limited and
      Proactive Medicare (Hangzhou) Company Limited dated August 20, 2005.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)                           

39

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|Exhibit |                                                                                                                                                                                                                                                                                                                                                                                                
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.24   | Description of Technical Exchange and Co-operative
      Agreement between Proactive Medicare (Jiangsu) Company Limited and Jiangsu
      Province Women and Children Hygiene and Health Center/the Auxiliary Ward
      of the Jiangsu Province Peoples Hospital dated September 29, 2005.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.25   | Agreement between Data Pacific Medical Group Limited and
      UPMG (Hong Kong) Limited dated June 28, 2006. (incorporated by reference
      from our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.26   | Hospital Management, Hospital Services Development and
      Related Consulting Services Agreement between The University Hospital of
      Macau University of Science and Technology Foundation and UPMG (Macau)
      Limited dated October 1, 2006. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.27   | Amendment Agreement to the Hospital Management, Hospital
      Services Development and Related Consulting Services Agreement between The
      University Hospital of Macau University of Science and Technology
      Foundation and UPMG (Macau) Limited dated June 27, 2007. (incorporated by
      reference from our Current Report on Form 8-K filed on July 31, 2008)                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.28   | Management Services Agreement between UPMG (Hong Kong)
      Limited and American-Sino Human Resources Consulting and Management
      (Shanghai) Ltd. Dated October 26, 2006. (incorporated by reference from
      our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.29   | Services Agreement PMEHK and PMEUS dated March 28, 2004.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.30   | Project Consultancy Agreement between PMEHK and PMEUS
      dated March 28, 2004. (incorporated by reference from our Current Report
      on Form 8-K filed on July 31, 2008)                                                                                                                                                                                                                 

|**(21)** | Subsidiaries of the Small Business Issuer                        
|-------- | -----------------------------------------------------------------
|         |                                                                  
|         | UPMG International Limited                                       
|         |                                                                  
|         | Proactive Medicare Enterprise (Hong Kong) Limited                
|         |                                                                  
|         | Proactive Medicare (Shenzhen) Company Limited                    
|         |                                                                  
|         | Proactive Medicare (Changsha) Company Limited                    
|         |                                                                  
|         | Proactive Medicare (Xiamen) Company Limited                      
|         |                                                                  
|         | Proactive Medicare (Nanjing) Company Limited                     
|         |                                                                  
|         | Proactive Medicare (Hangzhou) Company Limited                    
|         |                                                                  
|         | Proactive Medicare (Wuxi) Company Limited                        
|         |                                                                  
|         | United Premier Medical Group (Shanghai) Limited                  
|         |                                                                  
|         | Proactive Medicare Services (Hong Kong) Limited                  
|         |                                                                  
|         | Proactive Medicare (Beijing) Company Limited                     
|         |                                                                  
|         | UPMG (Hong Kong) Limited                                         
|         |                                                                  
|         | UPMG (US) Limited                                                
|         |                                                                  
|         | Guangzhou Inno-Proactive Medicare Consultancy Limited            
|         |                                                                  
|         | Shanghai Proactive Medicare Health Education Center
      Limited
|         |                                                                  
|         | UPMG (Shenzhen) Limited                                          
|         |                                                                  
|         | Broad Prosper Limited                                            
|         |                                                                  
|         | UPMG (Macau) Company Limited                                     

40

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|Exhibit |                                                         
|------- | --------------------------------------------------------
|No.     | Description                                             
|        |                                                         
|(31)    | Section 302
        Certification                       
|        |                                                         
|31.1*   | Section
        302 Certification of Henry J. Macfarland
|        |                                                         
|31.2*   | Section
        302 Certification of Edwin Chan         
|        |                                                         
|(32)    | Section 906
        Certification                       
|        |                                                         
|32.1*   | Section
        906 Certification of Henry J. Macfarland
|        |                                                         
|32.2*   | Section
        906 Certification of Edwin Chan         

* Filed herewith.

41

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SIGNATURES

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

CHINA HEALTH CARE CORPORATION

/s/
  Siew Man Pang
  By: Siew Man Pang
  Chief Executive Officer, 
  (Principal Executive Officer) 
  Dated: October 23, 2008

/s/
  Edwin Chan
  By: Edwin Chan 
  Chief Financial Officer
  (Principal Financial Officer and 
  Principal Accounting Officer) 
  Dated: October 23, 2008

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

/s/
  Siew Man Pang
  By: Siew Man Pang
  Chief Executive Officer, 
  (Principal Executive Officer) 
  Dated: October 23, 2008

/s/
  Edwin Chan
  By: Edwin Chan 
  Chief Financial Officer
  (Principal Financial Officer and 
  Principal Accounting Officer) 
  Dated: October 23, 2008

/s/
  Wong Yuen Yee
  By: Wong Yuen Yee 
  Director 
  Dated: October 23, 2008

/s/
  Wong Yao Wing
  By: Wong Yao Wing 
  Director 
  Dated: October 23, 2008

42

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/s/
  Andrew B. Kramer
  By: Andrew B. Kramer 
  Director 
  Dated: October 23, 2008

43

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