| DRAGON      INTERNATIONAL GROUP CORP.                               |
|---------------------------------------------------------------------|
| (Exact      name of small business issuer as specified in  charter) |

| Nevada                                                                  |   | 98-0177646                                    |
|-------------------------------------------------------------------------|--------|-----------------------------------------------|
| (State      or other jurisdiction ofincorporation      or organization) |   | (I.R.S.      EmployerIdentification      No.) |

| No.      201 Guangyuan Road, District C Investment Pioneering Park      Jiangbei, |
|-----------------------------------------------------------------------------------|
| Ningbo,      China 315033                                                         |
| (Address      of principal executive offices)                                     |
|                                                                              |
|                                                                              |
| (86)      21-56689332                                                             |
| (Issuer's      telephone number)                                                  |
|                                                                              |
|                                                                              |
|                                                                              |
|                                                                              |
| (Former      name, former address and former fiscal year,                         |
| if      changed since last report)                                                |

----

| Item      1.                    | Financial      Statements                                                                              |                                                                                                                                       |
|---------------------------------|-------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|
|                            |                                                                                                        |                                                                                                                                       |   |
|                            | 1)                                                                                                          | Consolidated      condensed balance sheet (unaudited) as of December 31,      2007                                                    | 2 |
|                            |                                                                                                        |                                                                                                                                       |   |
|                            | 2)                                                                                                          | Consolidated      condensed statements of operations (unaudited) for the three months and      six months ended December 31, 2007 and 2006 | 3 |
|                            |                                                                                                        |                                                                                                                                       |   |
|                            | 3)                                                                                                          | Consolidated      condensed statements of cash flows (unaudited) for the six months ended      December 31, 2007 and 2006                  | 4 |
|                            |                                                                                                        |                                                                                                                                       |   |
|                            | 4)                                                                                                          | Notes      to consolidated condensed financial statements (unaudited)                                                                      | 5 |
|                            |                                                                                                        |                                                                                                                                       |   |
| Item      2.                    | Management’s Discussion and      Analysis of Financial Condition and Results of      Operations  | 14                                                                                                                                         |
|                            |                                                                                                        |                                                                                                                                       |   |
| Item      3.                    | Controls and      Procedures                                                                           | 19                                                                                                                                         |
|                            |                                                                                                        |                                                                                                                                       |
| Item      3A(T).                | Controls      and Procedures                                                                                | 20                                                                                                                                         |
|                            |                                                                                                        |                                                                                                                                       |   |
| PART II. OTHER      INFORMATION |
|                            |                                                                                                        |                                                                                                                                       |   |
|                            |                                                                                                        |                                                                                                                                       |   |
| Item      1.                    | Legal      Proceedings                                                                            | 21                                                                                                                                         |
|                            |                                                                                                        |                                                                                                                                       |
| Item      2.                    | Unregistered      Sales of Equity Securities and Use of Proceeds                                            | 21                                                                                                                                         |
|                            |                                                                                                        |                                                                                                                                       |
| Item      3.                    | Defaults      Upon Senior Securities                                                                        | 21                                                                                                                                         |
|                            |                                                                                                        |                                                                                                                                       |
| Item      4.                    | Submission      of Matters to a Vote of Security Holders                                                    | 21                                                                                                                                         |
|                            |                                                                                                        |                                                                                                                                       |
| Item      5.                    | Other      Information                                                                                      | 21                                                                                                                                         |
|                            |                                                                                                        |                                                                                                                                       |
| Item      6.                    | Exhibits                                                                                                    | 21                                                                                                                                         |
|                            |                                                                                                        |                                                                                                                                       |
| SIGNATURES                      |                                                                                                        | 22                                                                                                                                         |

----

|                                                                                                                                            |   |   |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|
| CURRENT      ASSETS:                                                                                                                            |   |   |       |
|      Cash                                                                                                              |   | $      | 546,231    |   |
|      Accounts      receivable (net of allowance for doubtful accounts of      $165,780)                                |   |   | 8,912,362  |   |
|      Inventories                                                                                                       |   |   | 2,874,823  |   |
|      Advances      on purchases                                                                                        |   |   | 4,155,760  |   |
|           Other receivables                                                                                                 |   |   | 54,419     |   |
|           Cash-restricted                                                                                                   |   |   | 273,444    |   |
|           Note receivable                                                                                                   |   |   | 161,905    |   |
|      Prepaid      expenses and other current assets                                                                    |   |   | 1,103,754  |   |
|                                                                                                                                            |   |   |       |   |
|          Total      Current Assets                                                                 |   |   | 18,082,698 |   |
|                                                                                                                                            |   |   |       |   |
|                                                                                                                                            |   |   |       |   |
| Property      and equipment - net                                                                                                               |   |   | 3,072,376  |   |
| Land      use rights - net                                                                                                                      |   |   | 2,672,300  |   |
| Intangible      assets - net                                                                                                                    |   |   | 278,601    |   |
| Deferred      Expense                                                                                                                           |   |   | 18,532     |   |
|                                                                                                                                            |   |   |       |   |
|          Total      Assets                                                                         |   | $      | 24,124,507 |   |
|                                                                                                                                            |   |   |       |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                                       |
|                                                                                                                                            |   |   |       |   |
| CURRENT      LIABILITIES:                                                                                                                       |   |   |       |   |
|      Notes      payable - current portion                                                                              |   | $      | 4,117,944  |   |
|      Accounts      payable                                                                                             |   |   | 5,171,615  |   |
|      Accrued      expenses                                                                                             |   |   | 304,939    |   |
|      Advances      from customers                                                                                      |   |   | 46,290     |   |
|           Other payables                                                                                                    |   |   | 2,415,623  |   |
|      Liability      in connection with acquisition                                                                     |   |   | 1,123,573  |   |
|      Due      to related party                                                                                         |   |   | 319,080    |   |
|                                                                                                                                            |   |   |       |   |
|          Total      Current Liabilities                                                            |   |   | 13,499,064 |   |
|                                                                                                                                            |   |   |       |   |
|                                                                                                                                            |   |   |       |   |
| STOCKHOLDERS'      EQUITY:                                                                                                                      |   |   |       |   |
|      Preferred      stock ($.001 Par Value; 25,000,000 Shares Authorized:; No shares issued      and outstanding       |   |   | -          |   |
|      Common      stock ($.001 Par Value; 200,000,000 Shares Authorized; 96,363,982 shares      issued and outstanding) |   |   | 96,364     |   |
|      Additional      paid-in capital                                                                                   |   |   | 10,271,878 |   |
|      Accumulated      deficit                                                                                          |   |   | (544,557   | ) |
|      Other      comprehensive income - foreign currency                                                                |   |   | 801,758    |   |
|                                                                                                                                            |   |   |       |   |
|          Total      Stockholders' Equity                                                           |   |   | 10,625,443 |   |
|                                                                                                                                            |   |   |       |   |
|          Total      Liabilities and Stockholders' Equity                                           |   | $      | 24,124,507 |   |

----

|                                           |   | For      the Three Months EndedDecember      31, |        |   | For      the Six Months EndedDecember      31, |   |
|------------------------------------------------|--------|--------------------------------------------------|-------------|--------|------------------------------------------------|--------|
|                                           |   | 2007                                             |        |   | 2006                                           |   |   | 2007 |   |   | 2006 |   |
|                                           |   |                                             |        |   | Restated                                       |   |   |   |   |   | Restated |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |
| NET      REVENUES                              |   | $                                                | 13,056,527  |   |                                           | $      | 5,188,903 |   |   | $ | 20,986,025 |   |   | $ | 10,021,887 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| COST      OF SALES                             |   |                                             | 12,122,988  |   |                                           |   | 4,755,973 |   |   |   | 19,454,321 |   |   |   | 9,216,443 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| GROSS      PROFIT                              |   |                                             | 933,539     |   |                                           |   | 432,930 |   |   |   | 1,531,704 |   |   |   | 805,444 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING      EXPENSES:                       |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Selling      expenses                          |   |                                             | 92,716      |   |                                           |   | 23,113 |   |   |   | 285,024 |   |   |   | 137,946 |   |
| General      and administrative                |   |                                             | 289,000     |   |                                           |   | 176,762 |   |   |   | 523,339 |   |   |   | 490,122 |   |
| Total Operating      Expenses                  |   |                                             | 381,716     |   |                                           |   | 199,875 |   |   |   | 808,363 |   |   |   | 628,068 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| INCOME      FROM OPERATIONS                    |   |                                             | 551,823     |   |                                           |   | 233,055 |   |   |   | 723,341 |   |   |   | 177,376 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| OTHER      INCOME (EXPENSE):                   |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Income      tax abatement                      |   |                                             | 1,621,322   |   |                                           |   | - |   |   |   | 1,621,322 |   |   |   | - |   |
| Other      income                              |   |                                             | 70,653      |   |                                           |   | 6,410 |   |   |   | 128,047 |   |   |   | 100,073 |   |
| Interest      (expense)                        |   |                                             | (95,031     | )      |                                           |   | (43,331 | ) |   |   | (174,523 | ) |   |   | (76,763 | ) |
| Total Other Income      (Expense)              |   |                                             | 1,596,944   |   |                                           |   | (36,921 | ) |   |   | 1,574,846 |   |   |   | 23,310 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| INCOME      BEFORE INCOME TAXES                |   |                                             | 2,148,767   |   |                                           |   | 196,134 |   |   |   | 2,298,187 |   |   |   | 200,686 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| INCOME      TAXES                              |   |                                             | (172,009    | )      |                                           |   | - |   |   |   | (262,907 | ) |   |   | - |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| NET      INCOME BEFORE MINORITY INTEREST       |   |                                             | 1,976,758   |   |                                           |   | 196,134 |   |   |   | 2,035,280 |   |   |   | 200,686 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| MINORITY      INTEREST IN INCOME OF SUBSIDIARY |   |                                             | -           |   |                                           |   | - |   |   |   | (75,870 | ) |   |   | - |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| NET      INCOME                                |   |                                             | 1,976,758   |   |                                           |   | 196,134 |   |   |   | 1,959,410 |   |   |   | 200,686 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| OTHER      COMPREHENSIVE INCOME:               |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized      foreign currency translation   |   |                                             | 217,420     |   |                                           |   | 269,560 |   |   |   | 316,200 |   |   |   | 352,614 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE      INCOME                      |   | $                                                | 2,194,178   |   |                                           | $      | 465,.694 |   |   | $ | 2,275,610 |   |   | $ | 553,300 |   |
|                                           |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS PER COMMON SHARE                 |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                          |   | $                                                | 0.02        |   |                                           | $      | 0.00 |   |   | $ | 0.02 |   |   | $ | 0.00 |   |
| Diluted                                        |   | $                                                | 0.02        |   |                                           | $      | 0.00 |   |   | $ | 0.02 |   |   | $ | 0.00 |   |
| WEIGHTED      COMMON SHARES OUTSTANDING:       |   |                                             |        |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                          |   |                                             | 96,363,982  |   |                                           |   | 71,275,524 |   |   |   | 96,363,982 |   |   |   | 67,885,372 |   |
| Diluted                                        |   |                                             | 139,679,254 |   |                                           |   | 71,635,524 |   |   |   | 139,679,264 |   |   |   | 68,245,372 |   |

----

|                                                                                  |   | For      the Six Months EndedDecember      31, |       |
|---------------------------------------------------------------------------------------|--------|------------------------------------------------|------------|
|                                                                                  |   | 2007                                           |       |   | 2006 |   |
|                                                                                  |   |                                           |       |   | Restated |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                            |   |                                           |       |   |   |   |
| Net      income (loss)                                                                |   | $                                              | 1,959,410  |   |   | $ | 200,686 |   |
| Adjustments      to reconcile net loss to net cash used in operating      Activities: |   |                                           |       |   |   |   |   |   |
|    Depreciation      and amortization                                  |   |                                           | 258,447    |   |   |   | 204,267 |   |
|    Allowance      for doubtful accounts                                |   |                                           | (40,674    | ) |   |   | (20,045 | ) |
|    Minority      interest                                              |   |                                           | 75,870     |   |   |   | - |   |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| Changes      in assets and liabilities:                                               |   |                                           |       |   |   |   |   |   |
|    Accounts      receivable                                            |   |                                           | (1,549,783 | ) |   |   | (293,917 | ) |
|    Inventories                                                         |   |                                           | (776,969   | ) |   |   | (441,323 | )  |
|    Prepaid      and other current assets                               |   |                                           | (947,566   | ) |   |   | 343,376 |   |
|    Notes      receivables                                              |   |                                           | 284,008    |   |   |   | - |   |
|    Other      receivables                                              |   |                                           | (54,419    | ) |   |   | - |   |
|    Advances      to employees                                          |   |                                           | (7,424     | ) |   |   | - |   |
|    Advances      on purchases                                          |   |                                           | 11,273     |   |   |   | (2,059,720 | ) |
|    Other      assets                                                   |   |                                           | (18,531    | ) |   |   | 78,759 |   |
|    Accounts      payable                                               |   |                                           | 2,012,928  |   |   |   | 1,786,883 |   |
|    Tax      payable                                               |   |                                           | (1,445,698 | ) |   |   | - |   |
|    Other      payables                                            |   |                                           | (42,774    | ) |   |   | - |   |
|    Accrued      expenses                                               |   |                                           | (170,583   | ) |   |   | (324,191 | ) |
|    Advances      from customers                                        |   |                                           | 20,935     |   |   |   | (46,051 | ) |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| NET      CASH USED IN OPERATING ACTIVITIES                                            |   |                                           | (431,550   | ) |   |   | (571,276 | ) |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                            |   |                                           |       |   |   |   |   |   |
|    Due      to related parties                                         |   |                                           | -          |   |   |   | 3,498 |   |
|    Capital      expenditures                                           |   |                                           | (390,251   | ) |   |   | (392,606 | ) |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| NET      CASH FLOW  PROVIDED BY(USED IN) INVESTING    ACTIVITIES            |   |                                           | (390,251   | ) |   |   | (389,108 | ) |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                            |   |                                           |       |   |   |   |   |   |
|    Proceeds      from notes payable                                    |   |                                           | 171,566    |   |   |   | 1,944,355 |   |
|    Repayment      of notes payable                                     |   |                                           | -          |   |   |   | (1,488,527 | ) |
|    Proceeds      from exercise of stock warrants                       |   |                                           | -          |   |   |   | 1,000 |   |
|    Common      stock issued for raising capital                        |   |                                           | -          |   |   |   | 100,000 |   |
|    Decrease      in restricted cash                               |   |                                           | -          |   |   |   | 12,792 |   |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| NET      CASH FLOWS PROVIDED BY FINANCING ACTIVITITES                                 |   |                                           | 171,566    |   |   |   | 569,620 |   |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| EFFECT      OF EXCHANGE RATE ON CASH                                                  |   |                                           | 163,947    |   |   |   | 99,054 |   |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| NET      INCREASE (DECREASE) IN CASH                                                  |   |                                           | (486,288   | ) |   |   | (291,710 | ) |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| CASH      – Beginning of year                                                   |   |                                           | 1,032,519  |   |   |   | 466,272 |   |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| CASH      – End of period                                                       |   | $                                              | 546,231    |   |   | $ | 174,562 |   |
|                                                                                  |   |                                           |       |   |   |   |   |   |
| SUPPLEMENTAL      CASH FLOW INFORMATION:                                              |   |                                           |       |   |   |   |   |   |
| Cash      paid for:                                                                   |   |                                           |       |   |   |   |   |   |
|    Interest                                                            |   | $                                              | 174,523    |   |   | $ | 80,796 |   |
|    Income      taxes                                                   |   | $                                              | 262,907    |   |   | $ |   |   |
|                                                                                  |   |                                           |       |   |   |   |   |   |
|    Non-cash      investing and financing activities:                   |   |                                           |       |   |   |   |   |   |
| Issuance      of common stock for liability in connection with    acquisition         |   | $                                              | -          |   |   | $ | 1,141,476 |   |
| Acquisition of      minority interest in subsidiary                              |   | $                                              | 679,428    |   |   | $ | - |   |

----

| · |   | Dragon      International Group., a Florida corporation (“Dragon Florida”) is a wholly      owned subsidiary of Dragon Nevada.  Dragon Nevada acquired a      100% interest in Dragon Florida in October2004. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · |   | Ningbo      Dragon International Trade Co., Ltd., (“Ningbo Dragon”), is a wholly owned      subsidiary of Dragon Florida.  Dragon Florida acquired a 70%      interest in Ningbo Dragon in June 2004 and the remaining 30% interest in      December 2004. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · |   | Ningbo      City Jiangdong Yonglongxin Special Paper co., Ltd. (“Yonglongxin”) was      created as a wholly owned subsidiary of Ningbo Dragon in November      1999.  Xianyang Naite Research and Development Center (“R&D      Center”), a wholly owned subsidiary of Yonglongxin, was acquired by      Yonglongxin in August 2005. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · |   | Ningbo      Dragon Packaging Technology Co., Ltd., (“Dragon Packaging”) is a wholly      owned subsidiary of Ningbo Dragon.  Ningbo Dragon acquired a      100% interest in Dragon Packaging in June2005. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · |   | Hangzhou      Yongxin Paper Co., Ltd., (“Yongxin”) is a 60% owned subsidiary of Ningbo      Dragon.  The 60% interest was acquired in July    2005. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · |   | Shanghai      JinKui Packaging Material Co., Ltd. (“JinKui”) is a wholly owned      subsidiary of Dragon Nevada.  Dragon Nevada acquired a 100%      interest in JinKui in June 2006. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · |   | Wellton      International Fiber Corp. (“Wellton”) is a wholly owned subsidiary of      Dragon Nevada.  Dragon Nevada acquired a 51% interest in Wellton      in June 2007.  On September 28, 2007, the Company entered into an      agreement to acquire the remaining 49% of Wellton, which became effective      October 1, 2007. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | For      the fiscal year ended June 30, 2007, the Company erroneously filed      financial statements presenting in their statement of cash flows the      decrease of restricted cash as an investing activity.  The      Company is now presenting this as a financing activity, in accordance with      SFAS 95 “Statement of Cash Flows”.  This error did not affect      the balance sheet as of December 2006, or the statements of operations for      the three month period  or six month period ended December 31,      2006.  With this correction, the statements of cash flows for      the six month period ended December 31, 2006 reflect an increase in cash      flows from financing activities of$569,620. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For      the fiscal years ended June 30, 2007 and 2006, the Company erroneously had      deferred, over a three year period commencing in January 2006, $540,000 in      consulting expense related to the issuance of 6,000,000 shares of its      common stock to China Direct, Inc. and $395,675 related to the issuance of      4,700,000 common stock purchase warrants exercisable at $0.15 per share      over a five year period, also to China Direct, Inc. In addition, in      February 2006, the Company issued warrants to purchase 500,000 shares of      common stock, exercisable for five years at $.15 per share, to Skyebanc,      Inc. for a one year financial advisory consulting      agreement.  The Company had incorrectly deferred the fair value      of these warrants of $71,243 over the contract term. The Company has      restated the related financial statements to recognize the full expense of      these agreements immediately upon entering into the consulting agreements      in January 2006 and February 2006, under the provisions of EITF 96-18 and      SFAS 123R. These corrections resulted in an increase in consulting expense      for year ended June 30, 2006 and a reduction in consulting expense for      subsequent periods, including a reduction in consulting expenses of      $86,878 and $173,756 for the three month period and six month period ended      December 31, 2006, respectively, as detailed  below. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                 |   | As      Filed |   |   |  Adjustment      to Restate |   |   | Restated            |   |
|--------------------------------------|--------|---------------|--------|--------|----------------------------------|--------|--------|---------------------|--------|
|                                 |   |          |   |   |                             |   |   |                |   |   |
| Stock-based      consulting expenses |   | $             | 86,878 |   |                             | (*)    | $      |        (86,878 | )      |   | $ | - |   |
|                                 |   |          |   |   |                             |   |   |                |   |   |   |   |   |
| Net      loss per share              |   |          |   |   |                             |   |   |                |   |   |   |   |   |
| Basic                                |   | $             | (0.00  | )      |                             |   | $      | (0.00               | )      |   | $ | (0.00 | ) |
| Diluted                              |   |          | (0.00  | )      |                             |   |   | (0.00               | )      |   |   | (0.00 | ) |

----

|                                 |   | As      Filed |    |   | Adjustment      to Restate |   |   | Restated             |   |
|--------------------------------------|--------|---------------|---------|--------|----------------------------|--------|--------|----------------------|--------|
|                                 |   |          |    |   |                       |   |   |                 |   |   |
| Stock-based      consulting expenses |   | $             | 173,756 |   |                       | (*)    | $      |        (173,756 | )      |   | $ | - |   |
|                                 |   |          |    |   |                       |   |   |                 |   |   |   |   |   |
| Net      loss per common share       |   |          |    |   |                       |   |   |                 |   |   |   |   |   |
| Basic                                |   | $             | (0.00   | )      |                       |   | $      | (0.00                | )      |   | $ | (0.00 | ) |
| Diluted                              |   |          | (0.00   | )      |                       |   |   | (0.00                | )      |   |   | (0.00 | ) |

|   | (*) | To      expense the entire fair value of common stock and warrants issued to China      Direct Investment, Inc. in January 2006 and Skyebanc, Inc. in February      2006, previously accounted for as deferred compensation and amortized as      stock based consulting expenses and reverse in subsequent periods,      including the three month period and six month period ended December 31,      2006,  the related amortization  expense. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                     |   | For      the Three MonthsEnded      December 31, |        |   | For      the Six Months Ended      December 31, |   |
|----------------------------------------------------------|--------|--------------------------------------------------|-------------|--------|-------------------------------------------------|--------|
|                                                     |   | 2007                                             |        |   | 2006                                            |   |   | 2007 |   |   | 2006 |   |
|                                                     |   |                                             |        |   | Restated                                        |   |   |   |   |   | Restated |   |
| Net      income                                          |   | $                                                | 1,976,758   |   |                                            | $      | 196,134 |   |   | $ | 2,035,280 |   |   | $ | 200,686 |   |
| Weighted      average shares outstanding – basic   |   |                                             | 96,363,982  |   |                                            |   | 71,275,524 |   |   |   | 96,363,982 |   |   |   | 67,885,372 |   |
| Income      per share – basic                      |   | $                                                | 0.02        |   |                                            | $      | 0.00 |   |   | $ | 0.02 |   |   | $ | 0.00 |   |
|                                                     |   |                                             |        |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding – basic   |   |                                             | 96,363,982  |   |                                            |   | 71,275,524 |   |   |   | 96,363,982 |   |   |   | 67,885,372 |   |
| Effect      of dilutive securities                       |   |                                             |        |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
| Unexercised      warrants                                |   |                                             | 43,315,282  |   |                                            |   | 360,000 |   |   |   | 43,315,282 |   |   |   | 360,000 |   |
| Convertible      debentures                              |   |                                             | -           |   |                                            |   | - |   |   |   | - |   |   |   | - |   |
| Convertible      notes payable                           |   |                                             | -           |   |                                            |   | - |   |   |   | - |   |   |   | - |   |
| Weighted      average shares outstanding – diluted |   |                                             | 139,679,264 |   |                                            |   | 71,635,524 |   |   |   | 139,679,264 |   |   |   | 68,245,372 |   |
| Income      per share - diluted                     |   |                                             |        |   |                                            |   |   |   |   |   |   |   |   |   |   |   |

----

| Raw      materials  |   | $      | 495,274   |   |
|---------------------|--------|--------|-----------|--------|
| Finished      goods |   |   | 2,379,549 |   |
|                |   | $      | 2,874,823 |   |

|                                                        |   | Six      Month PeriodEnded      December      31, |      |
|-------------------------------------------------------------|--------|---------------------------------------------------|-----------|
|                                                        |   | 2007                                              |      |
| Land      Use Rights (estimated remaining life of 46 years) |   | $                                                 | 2,822,494 |   |
| Less:      Accumulated Amortization                         |   |                                              | (150,194  | ) |
|                                                        |   | $                                                 | 2,672,300 |   |

----

| Notes      payable to Bank of Agriculture, due on June 15, 2008.  Interest      only payable monthly at a rate of 7.227%.  Secured by the      property and building.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $      | 1,709,028  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on February 28, 2008. Interest only      payable monthly at a rate of 7.227%.  Secured by property and      building.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 888,695    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on July 22, 2008. Interest only      payable monthly at a rate of 7.524%.  Secured by property of      officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 136,722    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on July 22, 2008. Interest only      payable monthly at a rate of 7.524%.  Secured by property of      officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 136,722    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on June 15, 2008. Interest only      payable monthly at a rate of 7.884%.  Secured by third party      Yongke Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 273,444    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on June 15, 2008. Interest only      payable monthly at a rate of 7.884%.  Secured by third party      Yongke Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 273,444    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Longan Trading Corp. due on May 22, 2008.  No      interest. 50% of Deposit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 177,738    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Longan Trading Corp. due on June 03, 2008. No interest. 50% of      Deposit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 273,444    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      Payable to Fangyuan Paper Corp., due on June 07, 2008. No interest. 50% of      Deposit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 95,707     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to two shareholders. Interest only payable annually at a rate of      8%, $100,000 due January 10, 2008 and $53,000 due April 11,      2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 153,000    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Total                                                                                                                                        |   |   | 4,117,944  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Less      current      Portion                                                                                                               |   |   | (4,117,944 | )      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Long-Term      Portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      | -          |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Shares |       |   | WeightedAverageExercise      Price |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |       |   |                               |   |
| Outstanding      at July 1, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 43,315,282 |   |                               | $      | 0.145 |   |
| Granted                                                                                                                 |   |   | -          |   |                               |   | - |   |
| Exercised                                                                                                               |   |   | -          |   |                               |   | - |   |
| Forfeited                                                                                                               |   |   | -          |   |                               |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |       |   |                               |   |   |   |
| Outstanding      at December 31,      2007                                                                              |   |   | 43,315,282 |   |                               | $      | 0.145 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |       |   |                               |   |   |   |
| Warrants      exercisable at end of      period                                                                         |   |   | 43,315,282 |   |                               | $      | 0.145 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |       |   |                               |   |   |   |
| Weighted-average      fair value of warrants granted during the period                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | -          |   |                               |   | - |   |

|   Warrants      Outstanding and Exercisable |   |
|-------------------------------------------------------|--------|
|                                                  |   | Weighted |   |   |   |   |   |
|                                                  |   | Average |   | Weighted |   | Weighted |   |
| Range      of                                         |   | Remaining |   | Average |   | Average |   |
| Exercise                                              |   | Contractual |   | Exercise |   | Exercise |   |
| Prices                                                |   | Shares |   | Life      (Years) |   | Price |   |
| $0.300                                                |   | 150,000 |   | 2.78 |   | $  0.30 |   |
| $0.150                                                |   | 32,851,276 |   | 3.60 |   | $  0.15 |   |
| $0.125                                                |   | 10,000,006 |   | 4.34 |   | $0.125 |   |
| $0.010                                                |   | 314,000 |   | 3.03 |   | $  0.01 |   |

----

----

----

|   | · | Dragon      International Group., a Florida corporation (“Dragon Florida”) is a wholly      owned subsidiary of Dragon Nevada.  Dragon Nevada acquired a      100% interest in Dragon Florida in October2004. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Ningbo      Dragon International Trade Co., Ltd., (“Ningbo Dragon”).  Ningbo      Dragon is a wholly owned subsidiary of Dragon Florida.  Dragon      Florida acquired a 70% interest in Ningbo Dragon in June 2004 and the      remaining 30% interest in December2004. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Ningbo      City Jiangdong Yonglongxin Special Paper co., Ltd. (“Yonglongxin”) was      created as a wholly owned subsidiary of Ningbo Dragon in November      1999.  Xianyang Naite Research and Development Center (“R&D      Center”), a wholly owned subsidiary of Yonglongxin, was acquired by      Yonglongxin in August 2005. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Ningbo      Dragon Packaging Technology Co., Ltd., (“Dragon Packaging”) is a wholly      owned subsidiary of Ningbo Dragon.  Ningbo Dragon acquired a      100% interest in Dragon Packaging in June2005. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Hangzhou      Yongxin Paper Co., Ltd., (“Yongxin”) is a 60% owned subsidiary of Ningbo      Dragon.  The 60% interest was acquired in July    2005. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shanghai      JinKui Packaging Material Co., Ltd. (“JinKui”) is a wholly owned      subsidiary of Dragon Nevada.  Dragon Nevada acquired a 100%      interest in JinKui in June 2006. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Wellton      International Fiber Corp. (“Wellton”) is a wholly owned subsidiary of      Dragon Nevada.  Dragon Nevada acquired a 51% interest in Wellton      in June 2007 and the remaining 49% in October  2007. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                            |   | Six      Months Ended December 31, |       |
|---------------------------------|--------|------------------------------------|------------|
|                            |   | 2007                               |       |   | 2006 |   |   | $      Change |   |   | %      Change |   |
|                            |   |                               |       |   | Restated |   |   |   |   |   |   |   |
|                            |   |                               |       |   |   |   |   |   |   |   |   |   |
| Net      Revenues               |   |                               | 20,986,025 |   |   |   | 10,021,887 |   |   |   | 10,964,138 |   |   |   | 109% |   |
|                            |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of Sales              |   |                               | 19,454,321 |   |   |   | 9,216,443 |   |   |   | 10,237,878 |   |   |   | 111% |   |
|                            |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      expenses           |   |                               | 285,024    |   |   |   | 137,946 |   |   |   | 147,078 |   |   |   | 106% |   |
|                            |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General      and administrative |   |                               | 523,339    |   |   |   | 490,122 |   |   |   | 33,217 |   |   |   | 7% |   |
|                            |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      operating expenses   |   |                               | 808,363    |   |   |   | 628,068 |   |   |   | 180,295 |   |   |   | 29% |   |
|                            |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      income               |   |                               | 1,574,846  |   |   |   | 23,310 |   |   |   | 1,551,536 |   |   |   | - |   |
|                            |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                 |   |                               | 1,959,410  |   |   |   | 200,686 |   |   |   | 1,758,724 |   |   |   | - |   |

|                                                                 |   | Six      Months Ended December 31, |   |
|----------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                 |   | 2007                               |   |   | 2006 |   |   | %      Change |   |
|                                                                 |   |                               |   |   | Restated |   |   |   |   |
|                                                                 |   |                               |   |   |   |   |   |   |   |
| Cost      of revenues as a percentage of revenues                    |   |                               | 92.7%  |   |   |   | 92.0% |   |   |   | .7% |   |
|                                                                 |   |                               |   |   |   |   |   |   |   |   |   |   |
| Gross      profit margin                                             |   |                               | 7.3%   |   |   |   | 8.0% |   |   |   | (.7)% |   |
|                                                                 |   |                               |   |   |   |   |   |   |   |   |   |   |
| Selling      expenses as a percentage of revenues                    |   |                               | 1.4%   |   |   |   | 1.4% |   |   |   | .0% |   |
|                                                                 |   |                               |   |   |   |   |   |   |   |   |   |   |
| General      and administrative expenses as a percentage of revenues |   |                               | 2.5%   |   |   |   | 4.9% |   |   |   | (2.4)% |   |
|                                                                 |   |                               |   |   |   |   |   |   |   |   |   |   |
| Total      operating costs as a percentage of revenues               |   |                               | 3.9%   |   |   |   | 6.3% |   |   |   | (2.4)% |   |

----

----

| Notes      payable to Bank of Agriculture, due on June 15, 2008.  Interest      only payable monthly at a rate of 7.227%.  Secured by the      property and building.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $      | 1,709,028  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on February 28, 2008. Interest only      payable monthly at a rate of 7.227%.  Secured by property and      building.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 888,695    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on July 22, 2008. Interest only      payable monthly at a rate of 7.524%.  Secured by property of      officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 136,722    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on July 22, 2008. Interest only      payable monthly at a rate of 7.524%.  Secured by property of      officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 136,722    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on June 15, 2008. Interest only      payable monthly at a rate of 7.884%.  Secured by third party      Yongke Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 273,444    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Bank of Agriculture, due on June 15, 2008. Interest only      payable monthly at a rate of 7.884%.  Secured by third party      Yongke Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 273,444    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Longan Trading Corp. due on May 22, 2008.  No      interest. 50% of Deposit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 177,738    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to Longan Trading Corp. due on June 03, 2008. No interest. 50% of      Deposit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 273,444    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      Payable to Fangyuan Paper Corp., due on June 07, 2008. No interest. 50% of      Deposit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 95,707     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Notes      payable to two shareholders. Interest only payable annually at a rate of      8%, $100,000 due January 10, 2008 and $53,000 due April 11,      2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 153,000    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Total                                                                                                                                        |   |   | 4,117,944  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Less      current      Portion                                                                                                               |   |   | (4,117,944 | )      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |
| Long-Term      Portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      | -          |   |

----

|   | · | For      the fiscal year ended June 30, 2007, the Company erroneously filed      financial statements presenting in their statement of cash flows the      decrease of restricted cash as an investing activity.  The      Company is now presenting this as a financing activity, in accordance with      SFAS 95 “Statement of Cash Flows”.  This error did not affect      the balance sheet as of December 2006, or the statements of operations for      the three month period  or six month period ended December 31,      2006.  With this correction, the statements of cash flows for      the six month period ended December 31, 2006 reflect an increase in cash      flows from financing activities of$569,620. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For      the fiscal years ended June 30, 2007 and 2006, the Company erroneously had      deferred, over a three year period commencing in January 2006, $540,000 in      consulting expense related to the issuance of 6,000,000 shares of its      common stock to China Direct, Inc. and $395,675 related to the issuance of      4,700,000 common stock purchase warrants exercisable at $0.15 per share      over a five year period, also to China Direct, Inc. In addition, in      February 2006, the Company issued warrants to purchase 500,000 shares of      common stock, exercisable for five years at $.15 per share, to Skyebanc,      Inc. for a one year financial advisory consulting      agreement.  The Company had incorrectly deferred the fair value      of these warrants of $71,243 over the contract term. The Company has      restated the related financial statements to recognize the full expense of      these agreements immediately upon entering into the consulting agreements      in January 2006 and February 2006, under the provisions of EITF 96-18 and      SFAS 123. These corrections resulted in an increase in consulting expense      for year ended June 30, 2006 and a reduction in consulting expense for      subsequent periods including a reduction in consulting expenses of $86,878      and $173,756 for the three month period and six month period ended      December 31, 2006, respectively. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (i)    a      description of the conclusions of our principal executive and principal      financial officers, or persons performing similar functions, regarding the      effectiveness of our disclosure controls and procedures (as defined in      Rule      13a-15(e) or Rule 15d-15(e)      under the Exchange Act) as of the end of the period covered by the report,      based on the evaluation of these controls and procedures required by      paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act;      and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii)   a      report of management on the small business issuer's internal control over      financial reporting; as well as changes in our internal control over      financial reporting identified in connection with its evaluation that      occurred during our last fiscal quarter that has materially affected, or      is reasonably likely to materially affect, our internal control over      financial reporting. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM      1. | LEGAL      PROCEEDINGS |
|--------------|------------------------|

| ITEM      2.  | UNREGISTERED      SALES OF EQUITY SECURITIES AND USE OFPROCEEDS |
|--------------------|-----------------------------------------------------------------|

| ITEM      3. | DEFAULTS      UPON SENIOR SECURITIES |
|--------------|--------------------------------------|

|   | None |
|--------|------|

| ITEM      4. | SUBMISSION      OF MATTERS TO A VOTE OF SECURITYHOLDERS |
|--------------|---------------------------------------------------------|

|   | None |
|--------|------|

| ITEM      5.  | OTHER      INFORMATION |
|--------------------|------------------------|

| ITEM      6.  | EXHIBITS      AND REPORTS ON FORM 8-K |
|--------------------|---------------------------------------|

| 31.1  | Rule      13a-14(a)/15d-14(a) certification ofCEO |
|------------|---------------------------------------------------|

| 31.2  | Rule      13a-14(a)/15d-14(a) certification of principal accounting      officer |
|------------|----------------------------------------------------------------------------------|

| 32.1  | Section      1350 certification of CEO |
|------------|----------------------------------------|

| 32.2  | Section      1350 certification of principal accounting  officer |
|------------|------------------------------------------------------------------|

----