FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

|X|   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934

|_|   Transition Report under Section 13 of 15(d) of the Securities Exchange Act
      of 1934

Commission file number: 000-51516

                             UNIVERSAL TRAVEL GROUP
                 (Name of small business issuer in its charter)

                   Nevada                                 90-0296536
      (State or other jurisdiction of       (I.R.S. Employer Identification No.)

Shennan Road, Hualian Center room 301 - 309
   Shenzhen, People's Republic of China
-------------------------------------------               ----------
  (Address of principal executive offices)                (Zip code)

         Issuer's telephone number, including area code: 86 755 836 68489

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                    Common Stock, $0.001 par value per share
                   Preferred Stock, $0.001 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes |_| No |X|

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. |_|

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer |_|        Accelerated filer |_|
Non-accelerated filer   |_|        (Do not check if a smaller reporting company)
                                   Smaller reporting company |X|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes |_| No |X|

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter.

As of June 30, 2007, the aggregate market value of the common stock of the
registrant held by non-affiliates (excluding shares held by directors, officers
and other holding more than 5% of the outstanding shares of the class) was
$52,621,034, based upon the closing sale price of $2.00 as reported on the OTC
Bulletin Board at March 24, 2008.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15 of the Securities Exchange
Act of 1934 subsequent to the distribution of securities under a plan confirmed
by a court.

Yes |_| No |X|

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. As of March 24, 2008, the
registrant had outstanding 38,110,517 shares of common stock.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any report filed pursuant to Rule 424(b) or (c)
under the Securities Act of 1933. - None

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                                TABLE OF CONTENTS

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PART I
Item 1.     Description of Business ..................................................................................       3
Item 1A.    Risk Factors..............................................................................................       5
Item 1B.    Unresolved Staff Comments.................................................................................      13
Item 2.     Description of Property...................................................................................      13
Item 3.     Legal Proceedings.........................................................................................      14
Item 4.     Submission of Matters to a Vote of Security Holders.......................................................      14
PART II
Item 5.     Market for Registrant's Common Equity, Related Stockholder Matters
            and Issuer Purchases of Equity Securities.................................................................      14
Item 6.     Selected Financial and Other Data.........................................................................      16
Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations.....................      16
Item 7A     Quantitative and Qualitative Disclosures About Market Risk ...............................................      24
Item 8.     Financial Statements and Supplementary Data ..............................................................      24
Item 9.     Changes in and Disagreements With Accountants on Accounting and Financial Disclosure .....................      24
Item 9A     Controls and Procedures...................................................................................      25
Item 9B     Other Information ........................................................................................      26
PART III
Item 10     Directors, Executive Officers and Corporate Governance....................................................      26
Item 11     Executive Compensation....................................................................................      30
Item 12     Security Ownership of Certain Beneficial Owners and Management
            and Related Stockholder Matters ..........................................................................      32
Item 13     Certain Relationships and Related Transactions............................................................      32
Item 14     Principal Accounting Fees and Services....................................................................      34
PART IV
Item 15     Exhibits and Financial Statement Schedules................................................................      34

Signatures
</TABLE>

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Special Note Regarding Forward Looking Information

      Universal Travel Group (referred to in this Annual Report on Form 10-K as
"we" or the "Company") desires to take advantage of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995. This report contains a
number of forward-looking statements that reflect management's current views and
expectations with respect to our business, strategies, future results and events
and financial performance. All statements made in this annual report other than
statements of historical fact, including statements that address operating
performance, events or developments that management expects or anticipates will
or may occur in the future, including statements related to future cash flows,
revenues, profitability, adequacy of funds from operations, statements
expressing general optimism about future operating results and non-historical
information, are forward-looking statements. In particular, the words "believe,"
"expect," "intend," " anticipate," "estimate," "may," "will," variations of such
words and similar expressions identify forward-looking statements, but are not
the exclusive means of identifying such statements and their absence does not
mean that a statement is not forward-looking. These forward-looking statements
are subject to certain risks and uncertainties, including those discussed below.
Our actual results, performance or achievements could differ materially from
historical results as well as those expressed in, anticipated or implied by the
forward-looking statements contained herein. We do not undertake any obligation
to revise these forward-looking statements to reflect any future events or
circumstances.

      Readers should not place undue reliance on forward-looking statements,
which are based on management's current expectations and projections about
future events, are not guarantees of future performance, are subject to risks,
uncertainties and assumptions (including those described below) and apply only
as of the date of this report. Our actual results, performance or achievements
could differ materially from the results expressed in, or implied by, the
forward-looking statements contained herein. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
in "--Risk Factors" below as well as those discussed elsewhere in this report,
and the risks discussed in our press releases and other communications to
shareholders issued by us from time to time, which attempt to advise interested
parties of the risks and factors that may affect our business. We undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise


                                       2
<PAGE>

                                     PART I

Item 1. Description of Business.

      History and Organization

      Our Company was incorporated on January 28, 2004, in and under the laws of
the state of Nevada. On March 15, 2006, the Company entered into an Acquisition
Agreement and Plan of Merger (the "Acquisition Agreement") with TAM of
Henderson, Inc. ("TAM"), whereby TAM acquired all of the outstanding shares of
common stock, par value $.001 per share (the "Common Stock") of the Company from
the Company's then sole stockholder and simultaneously merged with and into the
Company, with the Company as the surviving corporation. On June 20, 2006, Mr.
Xiao Jun ("Jun"), a former officer and director of our Company, acquired from
the then-majority-shareholder of our Company 8,000,000 shares of the Company's
Common Stock, for an aggregate purchase price of $435,000 (the "Stock
Transaction"). After giving effect to such acquisition, Jun held 8,000,000 of
the 10,450,000 shares of the Company's Common Stock then issued and outstanding,
constituting, in the aggregate, 77% of the then issued and outstanding shares of
Common Stock of the Company. In connection with his acquisition of shares in the
Company, Jun was appointed as Chief Executive Officer of the Company.

      On July 12, 2006 (the "Effective Date"), the Company consummated the
transaction contemplated by the Agreement and Plan of Merger, dated as of June
26, 2006 (the "Merger Agreement"), by and among the Company, Merger Sub of Tam,
Inc. ("Merger Subsidiary"), a wholly owned subsidiary of the Company, Full Power
Enterprises Global Limited ("Full Power"), and the shareholders of Full Power.
In accordance with the Merger Agreement, Merger Subsidiary merged with and into
Full Power, Merger Subsidiary ceased to exist and Full Power was the surviving
entity (the "Merger Transaction"). The Full Power Shareholders received
20,000,000 shares of Common Stock of the Company in exchange for all of the
issued and outstanding shares of Full Power. As a result of the Merger
Transaction, Full Power became the Company's wholly owned subsidiary. Full Power
owns all of the issued and outstanding capital stock of Shenzhen Yu Zhi Lu
Aviation Service Company Limited, a company organized under the laws of China
("YZL").

      In connection with the Merger Transaction, Jiangping Jiang (who, prior to
the Merger Transaction was a shareholder of Full Power), Xin Zhang and Hoi-Yui
Lee were appointed to our Board of Directors and Jun resigned from all position
with our Company.

      Our Business

      With the acquisition of Full Power and hence YZL, the Company shifted its
business to the online travel service industry in China. YZL is primarily
engaged in China domestic and international airline ticketing services and cargo
transportation agency services, as well as international lines through Hong
Kong, Macao and Taiwan. Additionally, YZL provides hotel reservations, packaged
tours and and air delivery services both online and through customer
representative services. The main activities of YZL developed over the years
include air tickets booking, hotel reservations, and tour arrangements. YZL also
owns an aviation network (www.cnutg.com) that provides a complete air ticket
sales network.


                                       3
<PAGE>

      During 2007 the Company completed four acquisitions. The first company
acquired, Shenzhen Speedy Dragon Enterprise Limited ("SSD"), is engaged in the
business of air freight forwarding. SSD, located in Shenzhen City, is a cargo
logistics company providing commercial, point-to-point parcel and container
transportation services within China. It also operates as an international and
domestic freight forwarding agency for Chinese civil aviation companies and
provides railway and express delivery services. In connection with its delivery
services, SSD relies upon independent parties with more than 200 vehicles and
manages leased and owned warehouses totaling 40,000 square meters (approximately
430,556 square feet), which it uses to stage, transfer, and store packages in
transit. During 2007, air cargo for which transportation was arranged by SSD
accounted for approximately 30% of the total air cargo market in Shenzhen,
China.

      The second company acquired in 2007 was Xi'an Golden Net Travel Serve
Service Company Limited ("XGN"). XGN was established in 2001 and focuses on the
domestic tourism market and provides air tickets, train tickets and other
travel-related services including servicing individuals and groups attending
conferences and exhibits, arrangements for business studies, academic exchanges,
travel adventures, cultural education, sports competition, and theatrical
performances. XGN also specializes in central plains tours of the Xi'an. Since
2005, XGN has been a leader in forming joint ventures with travel agencies in
Tibet, Xinjiang, Shanxi and Inner Mongolia that focused on western plains routes
to enable it to advertise a "Find one agency, tour the entire Chinese west"
service concept. XGN provides its customers with one-stop shopping service.

      The third company acquired in 2007 was Shanghai Lanbao Travel Service
Company Limited ("SLB"). SLB was established in 2002 and its core business focus
is a centralized real-time booking system providing consumers and travel related
businesses with hotel bookings, air ticket and tourism information via the
internet and mobile phone text-messaging technology. It owns and manages the
award winning China Booking Association website, http://www.cba-hotel.com/,
which receives approximately 200,000 visitors daily.

      The fourth company acquired in 2007 was Foshan Overseas International
Travel Service Co., Ltd. ("FOI"). FOI was established in 1990. Its core business
focuses on both domestic and international tourism, as well as packaged airfare,
hotel and conference reservations with ground transportation in China. FOI is
recognized as a local market leader, with the second largest business volume in
its territory. For three consecutive years, FOI has been recognized as one of
the 100 outstanding enterprises by the China Tourism Bureau and in 2004 was
voted one of the most credible enterprises in the country. Last year the company
served more than 120,000 people with packaged tours and conferences.

Sales and Marketing

      We advertise our services for the general public through roadside
billboards, brochures, internet ads, cell phone message ads, newspapers and
magazines ads.


                                       4
<PAGE>

Competition

      Our main competitors in China in the online booking industry include
Ctrip.com International, Ltd. and eLong, Inc. Competitors in the other
businesses in which we are engaged include Lai Si Da Aviation Service Company
Limited, Zhong Hao Hui Freight and Flight Agency Company Limited, Da Zhi Cheng
Aviation Service Company Limited, Shenzhen Shi Xun Industry Company Limited, and
Tempus International Logistic Company Limited.

      Many of our competitors, particularly those engaged in the online booking
industry, are better established than us, are more widely known to consumers,
have larger infrastructures and greater capital resources.

Employees

      At the current time, in addition to our officers, we have approximately
320 employees. None of our employees is a member of a union and our
relationships with our employees are generally satisfactory.

Item 1A. Risk Factors.

      The reader should carefully consider each of the risks described below. If
any of the following risks described below should occur, our business, financial
condition or results of operations could be materially adversely affected and
the trading price of our common stock could decline significantly.

Risks Related to the Company

      Risks associated with business declines or disruptions in the travel
      industry generally could reduce our revenue.

      A large part of our revenues are driven by the trends that occur in the
travel industry in China, including the hotel, airline and packaged-tour
industries. As the travel industry is highly sensitive to business and personal
discretionary spending levels, it tends to decline during general economic
downturns. Other adverse trends or events that tend to reduce travel and are
likely to reduce the Company's revenues include the following:

            o     an outbreak of political or economic unrest in China;

            o     a recurrence of SARS or any other serious contagious diseases;

            o     increased prices in the hotel, airline, or other
                  travel-related industries;

            o     increased occurrence of travel-related accidents;

            o     outbreak of war or conflict in the Asia-Pacific region;

            o     increases in terrorism or the occurrence of a terrorist attack
                  in the Asia-Pacific region;

            o     poor weather conditions; and

            o     natural disasters.


                                       5
<PAGE>

      The Company could be severely affected by changes in the travel industry
and will, in many cases, have little or no control over those changes. As a
result of any of these events, our operating results and financial conditions
could be materially and adversely affected.

      Loss of Key Personnel Could Affect Our Ability to Successfully Grow Our
Business.

      The Company is highly dependent upon the services of its senior management
team. The permanent loss for any of the key executives could have a material
adverse effect upon our operating results.

      Our management is comprised almost entirely of individuals residing in the
PRC with very limited English skills

      Our management is comprised almost entirely of individuals born and raised
in the PRC. As a result of differences in culture, educational background and
business experiences, our management may analyze, evaluate and present business
opportunities and results of operations differently from the way they are
analyzed, evaluated and presented by management teams of public companies in
Europe and the United States. In addition, our management has very limited
skills in English. Consequently, it is possible that our management team will
emphasize or fail to emphasize aspects of our business that might customarily be
emphasized in a different manner by comparable public companies from different
geographical and political areas.

      Our management is not familiar with the United States securities laws.

      Our management and the former owners of the businesses we acquire are
generally unfamiliar with the requirements of the United States securities laws
and may not appreciate the need to devote the resources necessary to comply with
such laws. A failure to adequately respond to applicable securities laws could
lead to investigations by the Securities and Exchange Commission and other
regulatory authorities that could be costly, divert management's attention and
disrupt our business.

      Our operating history is not an adequate basis to judge our future
prospects.

      We have encountered and will continue to encounter risks and difficulties
frequently experienced by companies in evolving industries such as the travel
service industry in China. Some of the risks relate to our ability to:

            o attract and retain customers and encourage our customers to engage
            in repeat transactions;

            o retain our existing agreements with travel suppliers such as
            hotels and airlines and to expand our service offerings on
            satisfactory terms with our travel suppliers;

            o operate, support, expand and develop our operations, our call
            center, our website, and our communications and other systems;


                                       6
<PAGE>

            o diversify our sources of revenue;

            o maintain effective control of our expenses; and

            o respond to changes in our regulatory environment.

If we are not successful in addressing any or all of these risks, our business
may be materially affected in an adverse manner.

      The travel industry in China is seasonal.

      Our business travel operations experience seasonal fluctuations,
reflecting seasonal variations in demand for travel services. During the first
quarter, demand for travel services generally declines in China and the number
of bookings flattens or decreases, in part due to a slowdown in business
activity during the Chinese New Year holiday. Demand for travel services
generally peaks during the second half of the year and there may be seasonal
fluctuations in allocations of travel services made available to us by travel
suppliers. Consequently, our revenues may fluctuate from quarter to quarter.

      Our business depends on the technology infrastructure of third parties.

      We rely on third-party computer systems and other service providers,
including the computerized reservation systems of airlines and hotels to make
reservations and confirmations. Other third parties provide, for instance, our
back-up data center, telecommunications access lines, significant computer
systems and software licensing, support and maintenance service and air-ticket
delivery. Any interruption in these or other third-party services or
deterioration in their performance could impair the quality of our service.

Risks Related to our Common Stock

      There is a limited public market for our common stock.

      There is currently a limited public market for our common stock. Holders
of our common stock may, therefore, have difficulty selling their common stock,
should they decide to do so. In addition, there can be no assurances that such
markets will continue or that any shares of common stock, which may be
purchased, may be sold without incurring a loss. Any such market price of the
common stock may not necessarily bear any relationship to our book value,
assets, past operating results, financial condition or any other established
criteria of value, and may not be indicative of the market price for the common
stock in the future. Further, the market price for the common stock may be
volatile depending on a number of factors, including business performance,
industry dynamics, and news announcements or changes in general economic
conditions.

      Ownership of our common stock is concentrated.

      Our common stock is owned by a relatively small number of holders, some of
whom have business relationships in China. A determination by any of such
holders to sell all or a substantial portion of its holdings could depress the
trading price of our common stock.


                                       7
<PAGE>

      We have not and do not anticipate paying any dividends on our common
stock.

      We have paid no dividends on our common stock to date and it is not
anticipated that any dividends will be paid to holders of our common stock in
the foreseeable future. While our future dividend policy will be based on the
operating results and capital needs of the business, it is currently anticipated
that any earnings will be retained to finance our future expansion and for the
implementation of our new business plan. As an investor, you should take note of
the fact that a lack of a dividend can further affect the market value of our
stock, and could significantly affect the value of any investment in our
Company.

      We will incur significant costs as a result of operating as a public
      company and our management will be required to devote substantial time to
      compliance requirements.

            As a public company we incur significant legal, accounting and other
expenses under the Sarbanes-Oxley Act of 2002, together with rules implemented
by the Securities and Exchange Commission and applicable market regulators.
These rules impose various requirements on public companies, including requiring
certain corporate governance practices. Our management and other personnel will
need to devote a substantial amount of time to these compliance requirements.


                                       8
<PAGE>

      In addition, the Sarbanes-Oxley Act requires, among other things, that we
maintain effective internal controls for financial reporting and disclosure
controls and procedures. In particular, commencing in 2007, we must perform
system and process evaluations and testing of our internal controls over
financial reporting to allow management to report on the effectiveness of our
internal controls over financial reporting, as required by Section 404 of the
Sarbanes-Oxley Act. Our testing may reveal deficiencies in our internal controls
over financial reporting that are deemed to be material weaknesses. Compliance
with Section 404 may require that we incur substantial accounting expenses and
expend significant management efforts. If we are not able to comply with the
requirements of Section 404 in a timely manner, or if our accountants later
identify deficiencies in our internal controls over financial reporting that are
deemed to be material weaknesses, the market price of our stock could decline
and we could be subject to sanctions or investigations by the SEC or other
applicable regulatory authorities.

      Our Board of Directors has the authority, without stockholder approval, to
      issue preferred stock with terms that may not be beneficial to common
      stock holders.

      Our Amended and Restated Articles of incorporation authorizes the issuance
of preferred shares which may be issued with dividend, liquidation, voting and
redemption rights senior to our Common Stock without prior approval by the
stockholders. The Preferred Stock may be issued for such consideration as may be
fixed from time to time by the Board of Directors. The Board of Directors may
issue such shares of Preferred Stock in one or more series, with such
designations, preferences and rights or qualifications, limitations or
restrictions thereof as shall be stated in the resolution of resolutions.

      The issuance of preferred stock could adversely affect the voting power
and other rights of the holders of common stock. Preferred stock may be issued
quickly with terms calculated to discourage, make more difficult, delay or
prevent a change in control of our Company or make removal of management more
difficult. As a result, the Board of Directors' ability to issue preferred stock
may discourage the potential hostile acquirer, possibly resulting in beneficial
negotiations. Negotiating with an unfriendly acquirer may result in, among other
things, terms more favorable to us and our stockholders. Conversely, the
issuance of preferred stock may adversely affect any market price of, and the
voting and other rights of the holders of the common stock. We presently have no
plans to issue any preferred stock.

Risks Related to Doing Business in China

      It may be difficult for our stockholders to enforce their rights against
      the Company or its officers or directors.

      Because our principal assets are located outside of the United States and
some of our directors and all of our executive officers reside outside of the
United States, it may be difficult for you to enforce your rights based on the
United States Federal securities laws against us and our officers and directors
in the United States or to enforce judgments of United States courts against us
or them in the People's Republic of China.

      In addition, our operating subsidiaries and substantially all of our
assets are located outside of the United States. You will find it difficult to
enforce your legal rights based on the civil liability provisions of the United
States Federal securities laws against us in the courts of either the United
States or the People's Republic of China and, even if civil judgments are
obtained in courts of the United States, to enforce such judgments in the courts
of the People's Republic of China. In addition, it is unclear if extradition
treaties in effect between the United States and the People's Republic of China
would permit effective enforcement against us or our officers and directors of
criminal penalties, under the United States Federal securities laws or
otherwise.


                                       9
<PAGE>

      Our business operations take place primarily in China. Because Chinese
      laws, regulations and policies are continually changing, our operations
      will face numerous risks.

      Because the Company's operations primarily take place outside of the
United States and are subject to Chinese laws, regulations and policies
affecting any change of Chinese laws may adversely affect the Company's
business, such as exchange controls and currency restrictions, currency
fluctuations and devaluations, changes in local economic conditions, changes in
Chinese laws and regulations, exposure to possible expropriation or other
Chinese government actions, and unsettled political conditions. These factors
may have a material adverse effect on the Company's operations or on the
Company's business, results of operations and financial condition.

      China's economy differs from the economies of most developed countries in
many respects, including substantial governmental regulation, development,
growth rate, control of foreign exchange, significant restrictions on property
rights, taxation levels, and permitted allocation of resources. While the
People's Republic of China economy has experienced significant growth in the
past 20 years, growth has been uneven across different regions and among various
economic sectors of China. The government of the People's Republic of China has
implemented various measures to encourage economic development and guide the
allocation of resources, which may or may not achieve the desired results or
stated goals. Some of these measures may benefit the overall economy of People's
Republic of China, but may also have a negative effect on us or on the economy
in general. For example, our financial condition and results of operations may
be adversely affected by government control over capital investments or changes
in tax regulations that are applicable to us. Since early 2004, the government
of the People's Republic of China has implemented certain measures to control
the pace of economic growth. Such measures may cause a decrease in the level of
economic activity in China, which could adversely affect our results of
operations and financial condition.

      Limitations on Chinese economic market reforms may discourage foreign
investment in Chinese businesses.

      The value of investments in Chinese businesses could be adversely affected
by political, economic and social uncertainties in China. The economic reforms
in China in recent years are regarded by China's central government as a way to
introduce economic market forces into China. Given the overriding desire of the
central government leadership to maintain stability in China amid rapid social
and economic changes in the country, the economic market reforms of recent years
could be slowed, or even reversed.


                                       10
<PAGE>

      We face economic risks in doing business in China.

      As a developing nation, China's economy is more volatile than that of
developed Western industrial economies. It differs significantly from that of
the U.S. or a Western European country in such respects as structure, level of
development, capital reinvestment, resource allocation and self-sufficiency.
Only in recent years has the Chinese economy moved from what had been a command
economy through the 1970s to one that during the 1990s encouraged substantial
private economic activity. In 1993, the Constitution of China was amended to
reinforce such economic reforms. The trends of the 1990s indicate that future
policies of the Chinese government will emphasize greater utilization of market
forces. For example, in 1999 the Government announced plans to amend the Chinese
Constitution to recognize private property, although private business will
officially remain subordinated to the state-owned companies, which are the
mainstay of the Chinese economy. However, there can be no assurance that, under
some circumstances, the government's pursuit of economic reforms will not be
restrained or curtailed. Actions by the central government of China could have a
significant adverse effect on economic conditions in the country as a whole and
on the economic prospects for our Chinese operations.

      Any slowdown of economic growth in China could have a negative effect on
our business. There can be no assurance that the growth of the economy in China
will continue or that any slowdown will not have a negative effect on our
business.

      Our online business relies on the existence of an adequate
      telecommunications infrastructure for continued growth of China's internet
      market.

      Although private sector Internet service providers currently exist in
China, almost all access to the Internet is maintained through a network owned
by China Netcom under the regulatory supervision of China's Ministry of
Information Industry. In addition, the national networks in China connect to the
Internet through a government-controlled international gateway. This
international gateway is the only channel through which a domestic Chinese user
can connect to the international Internet network. We rely on this
infrastructure and China Netcom to provide data communications capacity,
primarily through local telecommunications lines. We cannot assure you that this
infrastructure will be further developed. In addition, we will have no access to
alternative networks and services, on a timely basis if at all, in the event of
any infrastructure disruption or failure. The Internet infrastructure in China
may not support the demands associated with continued growth in Internet usage.

      We may suffer currency exchange losses if the Renminbi depreciates
      relative to the U.S. Dollar.

      Our reporting currency is the U.S. dollar. However, a substantial portion
of our assets and revenues are denominated in the Chinese currency, Renminbi,
commonly referred to as RMB. Our assets and revenues expressed in our U.S.
dollar financial statements will decline in value of the Renminbi depreciates
relative to the U.S. dollar. Any such depreciation could adversely affect the
market price of our common stock. Very limited hedging transactions are
available in China to reduce our exposure to exchange rate fluctuations and we
do not intend to engage in any such transactions. In addition, our currency
exchange losses may be magnified by Chinese exchange control regulations that
restrict our ability to convert Renminbi into U.S. Dollars.


                                       11
<PAGE>

      We may not be able to freely convert Renminbi into foreign currency.

      A portion of our revenues and operating expenses will be denominated in
Renminbi while a portion of our capital expenditures are denominated in U.S.
dollars.

      Under current Chinese regulations, the payment of dividends, trade and
service-related foreign transactions to a foreign investor of a foreign-invested
enterprise is treated as a "current account" payment for which the approval of
the State Administration of Foreign Exchange is not required. However, in order
to distribute dividends we may be required to file documentation to a designated
foreign exchange bank. The Bank must certify that all requirements have been
met, such as payment of taxes, directors' approval and a capital verification
report issued by an accounting firm. If a foreign-invested enterprise dissolves,
a return of capital, which includes foreign direct investment, is treated as a
"capital account" payment. This typically requires approval of the State
Administration of Foreign Exchanges' in addition to the filing of documentation.

      We may currently convert Renminbi for transactions under the "current
account" without the approval of the State Administration of Foreign Exchange
for settlement of "current account" transactions, including payment of
dividends, by providing commercial documents evidencing these transactions. They
may also retain foreign exchange in their current accounts (subject to a ceiling
approved by the State Administration of Foreign Exchange) to satisfy foreign
exchange liabilities or to pay dividends. However, the relevant Chinese
governmental authorities may limit or eliminate the ability to purchase and
retain foreign currencies in the future. Such change of policy would materially
and adversely affect our business, financial condition and results of
operations.

      The Chinese legal and judicial system may negatively impact foreign
      investors.

      In 1982, the National Peoples Congress amended the Constitution of China
to authorize foreign investment and guarantee the "lawful rights and interests"
of foreign investors in China. However, China's system of laws is not yet
comprehensive. The legal and judicial systems in China are still rudimentary,
and enforcement of existing laws is inconsistent. Many judges in China lack the
depth of legal training and experience that would be expected of a judge in a
more developed country. Because the Chinese judiciary is relatively
inexperienced in enforcing the laws that do exist, anticipation of judicial
decision-making is more uncertain than would be expected in a more developed
country. It may be impossible to obtain swift and equitable enforcement of laws
that do exist, or to obtain enforcement of the judgment of one court by a court
of another jurisdiction. China's legal system is based on written statutes; a
decision by one judge does not set a legal precedent that is required to be
followed by judges in other cases. In addition, the interpretation of Chinese
laws may be varied to reflect domestic political changes.


                                       12
<PAGE>

      The promulgation of new laws, changes to existing laws and the pre-emption
of local regulations by national laws may adversely affect foreign investors.
However, the trend of legislation over the last 20 years has significantly
enhanced the protection of foreign investment and allowed for more control by
foreign parties of their investments in Chinese enterprises. There can be no
assurance that a change in leadership, social or political disruption, or
unforeseen circumstances affecting China's political, economic or social life,
will not affect the Chinese government's ability to continue to support and
pursue these reforms. Such a shift could have a material adverse effect on our
business and prospects.

      The practical effect of the Peoples Republic of China legal system on our
business operations in China can be viewed from two separate but intertwined
considerations. First, as a matter of substantive law, the Foreign Invested
Enterprise laws provide significant protection from government interference. In
addition, these laws guarantee the full enjoyment of the benefits of corporate
Articles and contracts to Foreign Invested Enterprise participants. These laws,
however, do impose standards concerning corporate formation and governance,
which are not qualitatively different from the general corporation laws of the
several states. Similarly, the Peoples Republic of China accounting laws mandate
accounting practices, which are not consistent with U.S. Generally Accepted
Accounting Principles. China's accounting laws require that an annual "statutory
audit" be performed in accordance with Peoples Republic of China accounting
standards and that the books of account of Foreign Invested Enterprises are
maintained in accordance with Chinese accounting laws. Article 14 of the Peoples
Republic of China Wholly Foreign-Owned Enterprise Law requires a Wholly
Foreign-Owned Enterprise to submit certain periodic fiscal reports and
statements to designate financial and tax authorities, at the risk of business
license revocation. Second, while the enforcement of substantive rights may
appear less clear than United States procedures, the Foreign Invested
Enterprises and Wholly Foreign-Owned Enterprises are Chinese registered
companies, which enjoy the same status as other Chinese registered companies in
business-to-business dispute resolution. Generally, the Articles of Association
provide that all business disputes pertaining to Foreign Invested Enterprises
are to be resolved by the Arbitration Institute of the Stockholm Chamber of
Commerce in Stockholm, Sweden, applying Chinese substantive law. Any award
rendered by this arbitration tribunal is, by the express terms of the respective
Articles of Association, enforceable in accordance with the "United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(1958)." Therefore, as a practical matter, although no assurances can be given,
the Chinese legal infrastructure, while different in operation from its United
States counterpart, should not present any significant impediment to the
operation of Foreign Invested Enterprises.

Item 1B. Unresolved Staff Comments.

      Not applicable.

Item 2. Description of Property.

      Our principal executive offices are located at Shennan Road, Hualian
Center Room 301 - 304, Shenzhen, People's Republic of China. Such offices
contain approximately 8,600 square feet of usable space are subject to a lease
which expires November 2008. The monthly rent payable for these offices is
$4,500.


                                       13
<PAGE>

      In addition to our headquarters, we maintain offices at the locations
listed below which require aggregate monthly payments of $12,300.

      1.    Nanshan Branch: Room A01, 1st Floor Lobby, Yi Hai Square, Chuang Ye
            Road, Nanshan Qu, Shenzhen City.

      2.    Luohu Branch: 1st Floor Lobby, Dongmen Hotel, Hubei Road, Luohu Qu,
            Shenzhen City.

      3.    Baoan Airport Branch: BT60-62, Area A, Shenzhen Baoan Airport.

      4.    Fuyong Branch: No. 129. Bai Shi Sha Blvd, Fuyong Zhen, Shenzhen
            City.

      5.    Longhua Zhuojing Branch: No.11 Sheng Di Long Quan, Ban Ren Min Bei
            Road, Longhua Blvd, Shenzhen City.

      6.    Xinzhou Branch: 1st Floor Business Center, Chu Tian Hotel, Hubei
            Building, Bin He Road, Shenzhen City.

      7.    No. 2008 Shennan Road, Hua Lian Building Suite 305-309,
            Shenzhen City.

Item 3. Legal Proceedings.

      The Company, its subsidiaries and its property are not a party to any
pending legal proceeding

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

      We did not submit any matter to a vote of our stockholders during the
fourth quarter of 2007.

                                     PART II

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

      Market Information.

      Our common stock, $.001 par value, is traded on the OTC Bulletin Board
under the symbol UTVG. Prior to August 21, 2006, the date we changed our name
from TAM of Henderson, Inc. to Universal Travel Group, our Common Stock was
quoted under the symbol "TMHN."

      The prices set forth below reflect the quarterly high and low bid price
information for shares of our common stock for the periods indicated. These
quotations reflect inter-dealer prices, without retail markup, markdown or
commission, and may not represent actual transactions.


                                       14
<PAGE>

                   2007                  High                Low
              --------------           -------             -------
              Fourth Quarter           $  5.72             $  2.75
              Third Quarter            $  4.08             $  1.85
              Second Quarter           $  3.60             $  1.57
              First Quarter            $  1.80             $  0.40

                   2006
              Fourth Quarter           $  1.66             $  0.35
              Third Quarter            $  1.20             $  0.65
              Second Quarter           $   N/A             $   N/A
              First Quarter            $   N/A             $   N/A

      Holders of Securities.

      As of March 24, 2008, there were approximately 33 holders of record of our
common stock.

      Our common stock is covered by a Commission rule that imposes additional
sales practice requirements on broker-dealers who sell such securities to
persons other than established customers and accredited investors, which are
generally institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and transaction prior to the sale. Consequently, the rule may affect the ability
of broker-dealers to sell our securities and also may affect the ability of
purchasers of our common stock to sell their shares in the secondary market. It
may also cause fewer broker-dealers to be willing to make a market in our common
stock, and it may affect the level of news coverage we receive.

      Dividends.

      We have not declared or paid any cash dividends on our common stock since
our inception, and our board of directors currently intends to retain all
earnings for use in the business for the foreseeable future. Any future payment
of dividends will depend upon our results of operations, financial condition,
cash requirements and other factors deemed relevant by our board of directors.
There are currently no restrictions that limit our ability to declare cash
dividends on its common stock and we do not believe that there are any that are
likely to do so in the future.

      Securities Authorized for Issuance Under Equity Compensation Plans.

      In January 2007 the Company adopted the Universal Travel Group 2007 Equity
Incentive Plan. In the first quarter of 2007 the Company issued 3,770,000 shares
of its common stock pursuant to the Plan for services rendered from October 2,
2006, through February 28, 2007. At the time of issuance the 3,770,000 shares
were valued at $1,583,400, of which $950,040 was charged against earnings in
2006 and $633,360 was charged against earnings for 2007.


                                       15
<PAGE>

      There are no longer any shares available for issuance pursuant to the
Universal Travel Group 2007 Equity Incentive Plan.

      During 2007 we issued Options to purchase 100,000 shares to each of three
newly appointed directors. The Options are exercisable for a period of
approximately 10 years from the date of issuance and are exercisable at prices
of $1.95; $2.85 and $3.75, respectively. The following table provides
information as of December 31, 2007 about our outstanding equity compensation
plans and arrangements.

Equity Compensation Plan Information - December 31, 2007

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                                   Number of securities remaining
                          Number of securities to   Weighted-average exercise   available for future issuance under
     Plan category        be issued upon exercise      price of outstanding          equity compensation plans
                          of outstanding options,     options, warrants and      (excluding securities reflected in
                            warrants and rights               rights                        column (a))
-------------------------------------------------------------------------------------------------------------------
                                    (a)                        (b)                              (c)
-------------------------------------------------------------------------------------------------------------------
<S>                               <C>                         <C>                                <C>
Equity compensation
plans approved by                  none                        N/A                               0
security holders
-------------------------------------------------------------------------------------------------------------------
Equity compensation
plans not approved by             300,000                     $2.85                              0
security holders
-------------------------------------------------------------------------------------------------------------------
Total                             300,000                     $2.85                              0
-------------------------------------------------------------------------------------------------------------------
</TABLE>

Purchases of Equity Securities by the Company and Affiliated Purchasers

      During the fourth quarter of our fiscal year ended December 31, 2007,
neither we nor any "affiliated purchaser" (as defined in Rule 10b-18(a)(3) under
the Exchange Act) purchased any shares of our common stock, the only class of
our outstanding equity securities registered pursuant to section 12 of the
Exchange Act.

      Recent Sales of Unregistered Equity Securities

      There were no unregistered sales of equity securities during 2007 that
were not previously included by the Company in a Current Report on Form 8-K or
on a Quarterly Report on Form 10-Q or 10-QSB.

Item 6. Selected Financial Data.

      Not applicable.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operation.


                                       16
<PAGE>

Introduction

      The following discussion should be read in conjunction with the
Consolidated Financial Statements and Notes thereto appearing elsewhere in this
Form 10-K. The following discussion contains forward-looking statements. Our
actual results may differ significantly from those projected in the
forward-looking statements. Factors that may cause future results to differ
materially from those projected in the forward-looking statements include, but
are not limited to, those discussed in "Risk Factors" and elsewhere in this
Report on Form 10-K.

OVERVIEW

      In June 2006, we commenced our business in the online travel service
industry in China through the acquisition of Full Power Enterprises Global
Limited ("Full Power") a holding corporation formed under the laws of the
British Virgin Islands which owned all of the capital stock of Shenzhen Yu Zhi
Lu Aviation Service Company Limited ("YZL). The acquisition of Full Power and
YZL was accounted for as a reverse acquisition. Consequently, the financial
statements included herein for dates and periods prior to the consummation of
the acquisition reflect the historical financial condition, results of
operations and cash flows of Full Power and, hence, YZL.

      YZL, a company organized under the laws of China, is primarily engaged in
China domestic and international airline ticketing services and cargo
transportation agency services as well as international lines through Hong Kong,
Macao and Taiwan. Additionally, YZL provides hotel reservations, packaged tours,
and air delivery services. The main activities of YZL developed over the years
include air tickets booking, hotel reservations, and tour arrangements. YZL also
owns an aviation network (www.cnutg.com) that provides a complete air ticket
sales network.

      On April 10, 2007, the Company acquired Shenzhen Speedy Dragon Enterprise
Limited ("SSD") in exchange for 714,285 shares of the Company's common stock and
an interest-free promissory note in the principal amount of $3,000,000, payable
no later than April 10, 2008.

      SSD, located in Shenzhen City, is a cargo logistics company providing
commercial, point-to-point parcel and container transportation services within
China. It also operates as an international and domestic freight forwarding
agency for Chinese civil aviation companies and provides railway and express
delivery services. SSD relies upon independent delivery services with more than
200 vehicles and manages leased and owned warehouses totaling 40,000 square
meters (approximately 430,556 square feet), which it uses to stage, transfer,
and store packages in transit. During 2007, air cargo for which SSD arranged
transportation accounted for approximately 30% of the total air cargo market in
Shenzhen, China.

      On August 6, 2007, the Company acquired Xi'an Golden Net Travel Serve
Service Company Limited ("XGN") in exchange for 151,765 shares of the Company's
common stock and interest-free promissory notes in the aggregate principal
amount of $1,542,000, payable no later than August 6, 2008.


                                       17
<PAGE>

      XGN was established in 2001 and focuses on the domestic tourism market and
provides air tickets, train tickets and other travel-related services including
servicing individuals and groups attending conferences and exhibits,
arrangements for business studies, academic exchanges, travel adventures,
cultural education, sports competition, and theatrical performances. XGN also
specializes in central plains tours of the Xi'an. Since 2005, XGN has been a
leader in forming joint ventures with travel agencies in Tibet, Xinjiang, Shanxi
and Inner Mongolia that focused on western plains routes to enable it to
advertise a "Find one agency, tour the entire Chinese west" service concept. XGN
provides its customers with a one-stop shopping service.

      On August 8, 2007, the Company acquired Shanghai Lanbao Travel Service
Company Limited ("SLB") in exchange for 600,000 shares of the Company's common
stock and interest-free promissory notes in the aggregate principal amount of
$2,828,000, payable no later than August 8, 2008.

      SLB was established in 2002 and its core business focus is a centralized
real-time booking system providing consumers and travel related businesses with
hotel bookings, air ticket and tourism information via the internet and mobile
phone text-messaging technology. It owns and manages the award winning China
Booking Association website, http://www.cba-hotel.com/, which receives
approximately 200,000 visitors daily.

      On October 29, 2007, the Company acquired Foshan Overseas International
Travel Service Co., Ltd. ("FOI") in exchange for 1,122,986 shares of the
Company's common stock and interest-free promissory notes in the aggregate
principal amount of $3,153,500, payable no later than October 29, 2008. .

      FOI was established in 1990. Its core business focuses on both domestic
and international tourism, as well as packaged airfare, hotel and conference
reservations with ground transportation in China. FOI is recognized as a local
market leader, with the second largest business volume in its territory. For
three consecutive years, the company has been recognized as one of the 100
outstanding enterprises by the China Tourism Bureau and in 2004 was voted one of
the most credible enterprises in the country. Last year the company served more
than 120,000 people with packaged tours and conferences.

      All capital stock shares and amounts and per share data included herein
have been retroactively restated for the recapitalization treatment accorded the
acquisition of FPEG. Because the acquisition of each of XGN and SLB occurred
during the third quarter the financial statements of the Company and the
Management's Discussion and Analysis set forth below include the results of
operations of XGN and SLB for the period of August 6 through December 31, 2007
and August 8 through December 31, 2007, respectively. The acquisition of FOI
occurred subsequent to the end of the third quarter and, consequently, only its
4th quarter results in 2007 are reflected in the financial statements included
in this Report.


                                       18
<PAGE>

RESULTS OF OPERATIONS

      The following table presents certain consolidated statement of operations
information derived from the consolidated statements of income for years ended
December 31, 2006 and 2007.

                                                   FY2007               FY2006
                                                   ------               ------

Revenues                                        $44,294,853          $10,013,788

Cost of Services                                $29,519,012          $ 4,594,376
--------------------------------------------------------------------------------
Gross Profit                                    $14,775,841          $ 5,419,412

General and Administrative Expense              $ 3,229,526          $ 1,353,434

Stock based compensation                        $   945,903          $   950,040

Income from Operations                          $10,600,412          $ 3,115,938

Revenue by subsidiary:

<TABLE>
<CAPTION>
                        YZL            SSD            XGN             SLB           FOI           Total
<S>                 <C>            <C>            <C>            <C>            <C>            <C>
Sales               $16,760,039    $11,739,272    $ 8,548,989    $ 2,383,129    $ 4,863,423    $44,294,853

Cost of Services    $ 7,574,560    $ 9,631,553    $ 7,297,253    $   764,774    $ 4,250,872    $29,519,012
----------------------------------------------------------------------------------------------------------
Gross Profit        $ 9,185,480    $ 2,107,719    $ 1,251,736    $ 1,618,355    $   612,551    $14,775,841
</TABLE>

                       YZL(%)    SSD(%)    XGN(%)    SLB(%)    FOI(%)   Total(%)

Sales                   38%       27%       19%        5%       11%      100%

Cost of Services        26%       33%       25%        3%       14%      100%
--------------------------------------------------------------------------------
Gross Profit            62%       14%        8%       11%        4%      100%

      Revenues for the year ended December 31, 2007 ("fiscal 2007") were
$44,294,853 compared to $10,013,788 for the year ended December 31, 2006
("fiscal 2006"), an increase of approximately 342%. This increase is
attributable to the Company's organic growth as well as its expansion into air
cargo transportation, packaged tours services and hotel booking services,
through the acquisitions of SSD, XGN, SLB and FOI.

      Gross Profit for fiscal 2007 was $14,775,841 compared to $5,419,412 for
fiscal 2006, an increase of approximately 173%. The increase in gross profit
reflects the Company's aggressive growth strategy as exemplified by continued
growth in its traditional customer base and the acquisitions of SSD, XGN , SLB
and FOI.


                                       19
<PAGE>

      Gross profit margin for fiscal 2007 was 33% compared to 54% in fiscal
2006. This decrease is primarily due to the fact that the accounting treatment
for the operations of SSD, XGN and SLB and other new operations undertaken by
the Company require the deduction of cost of service to derive gross profit as
opposed to the businesses the Company was engaged in during the fiscal year 2006
which recorded commissions earned on airline bookings and whose cost of service
was minimal as compared to the commissions earned.

      Selling, general and administrative expenses for fiscal 2007 totaled
$3,229,526 compared to $1,353,434 in fiscal 2006. S, G & A was approximately 7%
of revenues in fiscal 2007 as compared to 14% for fiscal 2006. The increase in
S,G & A reflects the acquisitions of SSD, XGN , SLB and FOI, and the decrease in
S,G & A as a percentage of revenues reflects the fact that certain expenses did
not grow proportionate with the increase in the Company's revenues.

      Stock based compensation reflects shares issued to certain consultants
who, among other things, assisted the Company in its efforts to become publicly
traded in the United States. The Company anticipates that it will not rely as
much on such consultants in the future and that the amount of stock based
compensation will decrease. The Company anticipates that it will look to its
directors, counsel and other third parties to provide the services previously
rendered by these consultants and that the fees payable to its directors and
counsel will increase to reflect the added services rendered.

      Interest expense for fiscal 2007 totaled $80,847 compared to $2,754 for
fiscal 2006. The significant increase in interest expense reflects the fact that
the Company financed a portion of the cost of its acquisitions with cash
borrowed from commercial banks.

      Net income was $8,695,894 or 20% of Revenues for fiscal 2007, compared to
$2,558,478 or 26% of Revenues for fiscal 2006. The increase in net income
reflects the continued growth in the Company's business and the acquisitions of
SSD, XGN, SLB and FOI. The decrease in net income as a percentage of Revenues
reflects the fact that the businesses acquired generally had lower margins than
the Company's historical operations.

LIQUIDITY AND CAPITAL RESOURCES

      Cash for operations and liquidity needs are funded primarily through cash
flows from operations and short-term borrowings. Cash and cash equivalents were
$2,671,684 at December 31, 2007. Current assets and current liabilities as of
December 31, 2007, were $16,252,071 and $8,267,851, yielding working capital of
$7,984,220. During 2007 we paid the debts incurred in connection with the
acquisitions of SSD, SLB and XGN, respectively. We believe that the funds
available to us from operations are adequate to meet our operating needs in 2008
and satisfy the debt incurred in connection with the acquisition of FOI
($1,576,750). For the fiscal year 2007, net cash provided by operating
activities was approximately $7,103,059, which resulted primarily from our
organic growth and growth of our newly acquired businesses.


                                       20
<PAGE>

Capital expenditures

      Total capital expenditures for fiscal 2007 were $57,930 for purchase of
fixed assets, primarily machinery and equipment. We have no plans for material
capital expenditures during 2008.

Working Capital Requirements

      Historically operations and short term financing have been sufficient to
meet our cash needs. We believe that we will be able to generate revenues from
operations to provide the necessary cash flow to meet anticipated working
capital requirements for at least the following 12 months. However, our actual
working capital needs for the long and short term will depend upon numerous
factors, including operating results, competition, the opportunity to acquire or
start-up new businesses, and the availability of credit facilities, none of
which can be predicted with certainty. If necessary, we will seek to raise
capital for the maintenance and expansion of our operations through the issuance
of debt or equity. There can be no assurance that such financing will be
available or, if available, will be on terms acceptable to the Company. Future
expansion will be limited by the availability of financing.


                                       21
<PAGE>

      On February 4, 2008, we received commitments from three Chinese entities
for $3,500,000 in financing at a price of $2.70 per share. The funds were to be
advanced in three tranches. We received the first tranche of $600,000 on
February 4, 2008. The second tranche due February 28th has not been received, in
part, as a result of a dispute with the investors as to how the proceeds would
be applied. Discussions with the investors are ongoing, but in light of market
conditions we do not anticipate receiving either the second or third tranche on
a timely basis. The company is continuing to generate cash from operations and
is evaluating its options with a number of prospective financiers.

Off Balance Sheet Arrangements

      We have never entered into any off-balance sheet financing arrangements
and have never established any special purpose entities. We have not guaranteed
any debt or commitments of other entities or entered into any options on
non-financial assets.

Critical Accounting Policies and Estimates

Basis of consolidation

The consolidated financial statements include the accounts of universal travel
group and its wholly owned subsidiaries shenzhen yuzhilu aviation service co.,
ltd, shenzhen speedy dragon enterprises limited, shanghai lanbao travel service
co., ltd, xian golden net travel serve services, ltd., foshan overseas
international travel service co. Ltd. And full power enterprise global limited
collectively referred to herein as the company. All material inter-company
accounts, transactions and profits have been eliminated in consolidation.

Use of estimates

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

Cash and cash equivalents

Cash and cash equivalents include cash on hand and cash in time deposits,
certificates of deposit and all highly liquid debt instruments with original
maturities of three months or less.

Accounts receivable

The company maintains reserves for potential credit losses on accounts
receivable. Allowance for doubtful accounts amounted to $ 73,115 and $74,945 as
at December 31, 2007 and 2006 respectively.

Property, plant & equipment

Property and equipment are stated at cost. Expenditures for maintenance and
repairs are charged to earnings as incurred; additions, renewals and betterments
are capitalized. When property and equipment are retired or otherwise disposed
of, the related cost and accumulated depreciation are removed from the
respective accounts, and any gain or loss is included in operations.
Depreciation of property and equipment is provided using the straight-line
method for substantially all assets over the estimated useful lives.


                                       22
<PAGE>

Long-lived assets

The company adopted statement of financial accounting standards no. 144,
accounting for the impairment or disposal of long-lived assets (sfas 144), which
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets and supersedes sfas no. 121, accounting for the impairment of
long-lived assets and for long-lived assets to be disposed of, and the
accounting and reporting provisions of apb opinion no. 30, reporting the results
of operations for a disposal of a segment of a business. The company
periodically evaluates the carrying value of long-lived assets to be held and
used in accordance with sfas 144. Sfas 144 requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets carrying amounts. In that event, a loss is
recognized based on the amount by which the carrying amount exceeds the fair
market value of the long-lived assets. Loss on long-lived assets to be disposed
of is determined in a similar manner, except that fair market values are reduced
for the cost of disposal. Based on its review, the company believes that, as of
december 31,2007 there were no significant impairments of its long-lived assets.

Fair value of financial instruments

Statement of financial accounting standard no. 107, disclosures about fair value
of financial instruments, requires that the company disclose estimated fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.

Revenue recognition

The company's revenue recognition policies are in compliance with staff
accounting bulletin (sab) 104. Revenue is recognized at the date the price is
fixed or determinable, the delivery is completed, no other significant
obligations of the company exist and collectibility is reasonably assured.
Payments received before all of the relevant criteria for revenue recognition
are satisfied are recorded as unearned revenue.

Advertising

Advertising expenses consist primarily of costs of promotion for corporate image
and product marketing and costs of direct advertising. The company expenses all
advertising costs as incurred.

Income taxes

The company utilizes sfas no. 109, accounting for income taxes, which requires
the recognition of deferred tax assets and liabilities for the expected future
tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred income taxes are recognized for the
tax consequences in future years of differences between the tax bases of assets
and liabilities and their financial reporting amounts at each period end based
on enacted tax laws and statutory tax rates applicable to the periods in which
the differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.


                                       23
<PAGE>

Intangibles

Intangible assets are amortized using the straight-line method over their
estimated period of benefit. Evaluation of the recoverability of intangible
assets is made annually to take into account events or circumstances that
warrant revised estimates of useful lives or that indicate that impairment
exists. All of our intangible assets are subject to amortization. No impairments
of intangible assets have been identified during any of the periods presented.

Reporting Currency and Translation

The Company's functional currency is Renminbi ("RMB"); however, the reporting
currency is the United States dollar ("USD"). Assets and liabilities of the
Company have been translated into dollars using the exchange rate at the balance
sheet date. The average exchange rate for the period has been used to translate
revenues and expenses. Translation adjustments are reported separately and
accumulated in a separate component of equity (cumulative translation
adjustment).

Foreign Operations

All of the Company's operations and assets are located in China. The Company may
be adversely affected by possible political or economic events in this country.
The effect of these factors cannot be accurately predicted.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

      Not applicable.

Item 8. Financial Statements and Supplementary Data.

      The financial information required by this item is set forth beginning on
page F-1.

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

      On June 23, 2006, we dismissed the firm of Moore & Associates, Chartered
("Former Auditor"), which had served as our independent auditor until that date.
The Former Auditor was our auditor prior to the acquisition of control of our
Company by Xiao Jun.

      On June 23, 2006, we retained Morgenstern, Svoboda & Baer, CPA's, P.C. to
serve as our principal independent accountant.

      Our Board of Directors approved the decision to dismiss the Former Auditor
and engage the New Auditor.

      The reports of the Former Auditor on our financial statements for the two
fiscal years preceding its dismissal did not contain an adverse opinion or
disclaimer of opinion or any qualifications or modifications related to
uncertainty, limitation of audit scope or application of accounting principles,
except that report of the Former Auditor dated March 6, 2006, on our financial


                                       24
<PAGE>

statements for the periods from January 15, 2004 (inception) through December
31, 2004, and for the fiscal year ended December 31, 2005 expressed "substantial
doubt about our ability to continue as a going concern" and stated that the
"financial statements do not include any adjustments that might result from the
outcome of this uncertainty". During the fiscal years ending December 31, 2004
and December 31, 2005 and the period from December 31, 2005, 2006 to June 23,
2006, the Company did not have any disagreements (within the meaning of
Instruction 4 of Item 304 of Regulation S-K) with the Former Auditor as to any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure and there have been no reportable events (as defined
in Item 304 of Regulation S-K).

      We furnished the Former Auditor with a copy of the disclosures in our Form
8-K dated June 23, 2006 reporting the change in accountants and the Former
Auditor filed a letter dated June 23, 2006 addressed to the Securities and
Exchange Commission stating that it agreed with the statements in our Form 8-K.
A copy of that letter was filed as Exhibit 16.2 to our Form 8-K.

Item 9A. Controls and Procedures.

      Our management is responsible for establishing and maintaining disclosure
controls and procedures that are designed to ensure that information required to
be disclosed in our reports under the Securities Exchange Act of 1934 (the
"Exchange Act") is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the Securities and Exchange
Commission (the "SEC"), and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure based closely on the definition of "disclosure controls and
procedures" in Rule 15d-15(e) under the Exchange Act. In designing and
evaluating the disclosure controls and procedures, management recognized that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.

      At the end of the period covered by this Annual Report, we carried out an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our Company's disclosure controls
and procedures. Based upon the foregoing, our Chief Executive Officer and Chief
Financial Officer concluded that, as of December 31, 2007, the disclosure
controls and procedures of our Company were effective to ensure that the
information required to be disclosed in our Exchange Act reports was recorded,
processed, summarized and reported on a timely basis.

Our management is also responsible for establishing and maintaining adequate
internal controls over financial reporting. Such controls are intended to
provide reasonable assurance regarding the reliability of our financial reports
for external reporting purposes and for purposes of monitoring operations.


                                       25
<PAGE>

      In June 2006, we, then a public shell company, acquired FPEG, a holding
company, and its wholly-owned operating subsidiary, YZL, which was doing
business in the PRC. At such time the management of YZL assumed management
control of our company. Further, as we had no operations prior to such
acquisition, upon the acquisition of YZL, its system of financial controls and
procedures were adopted as those of our Company. Such financial controls and
procedures were not adequate for a public reporting company and our management
began the process of upgrading our financial controls and procedures. During
2007 we made a number of acquisitions. None of the businesses or operations
acquired had financial controls and procedures appropriate for a public company
and we began the procedure of incorporating the assets or operations acquired
into our financial systems.

      Our management performed an assessment of the effectiveness of our
internal control over financial reporting as of December 31, 2007. Based upon
such assessment, management concluded that our operational procedures were
generally adequate. Nevertheless, during the course of such review our
management found a number of areas where the procedures required by Section 404
had not been fully implemented due, in certain instances, to the late date at
which the subsidiary had been acquired. Management believes that these
discrepancies do not represent material deficiencies in our financial reporting
systems. Nevertheless, management has recommended changes to be adopted in
respect of each deficiency uncovered and intends to implement such changes.
Management will continue to assess the adequacy of our financial reporting
systems in light of the anticipated continued growth in our operations. We
anticipate that if we grow significantly, we will have to continuously upgrade
our systems to ensure the reliability of our financial statements.

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

      There were no changes in internal controls over financial reporting that
occurred during the fiscal year ended December 31, 2007, that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

Item 9B. Other Information.

Not applicable

                                    PART III

Item 10. Directors and Executive Officers.

      Our directors, executive officers and key employees are:

      Name                            Age      Position
      ----                            ---      --------
      Jiangping Jiang                  46      Chair, Chief Executive Officer
      Jing Xie                         26      Secretary, Director
      Richard Cohen                    56      Director
      Richard P. Randall               70      Director
      James Treacy                     50      Director
      Huijie Gao                       27      Vice President of
                                               Corporate Finance


                                       26
<PAGE>

      Each of our directors is presently holding a director position of one year
ending at the next annual meeting of stockholders or his or her earlier
resignation or death.

      Jiangping Jiang has been serving as chair and Chief Executive Officer
since July 12, 2006. Xin Zhang has been serving as director and Chief Financial
Officer since July 12, 2006. Jing Xie has been serving as a director and
Secretary since December 29, 2006. Richard Cohen has been serving as a director
since May 7, 2007. Richard P. Randall has been serving as a director since
September 6, 2007. James Treacy has been serving as a director since December 7,
2007.

      The business experience of each or our directors, named executive officers
and significant employees is set forth below:

      Jiangping Jiang. Prior to founding the Yu Zhi Lu Aviation Service Company,
in 1998, Jiangping Jiang held positions in the airline industry and in
government. From 1991 to 1998, she was the manager of Shenzhen International
Airlines Agency. From 1982-1991, she served as a member of the Chongqing
municipal government planning committee. From 1979 to 1982, she was employed by
Chengdu airport.

      Huijie Gao. Mr. Gao graduated from Wuhan University, Hubei Province,
China, with a Bachelor of Economics degree, major in International Accounting in
2002. He started his career as an Jounior accountant in Hubei DaXin Accounting
firm since 2002, and reached a professional level of Senior General Accountant
in 2005. He had been working on the accounting jobs in many different industries
and had been engaged in serveral Chinese pubilc company's audit works, including
Shandong Yanfa industry Co., Ltd. , Lu neng Tai mountain Group, etc. He is a
keen and diligent profession pursuer, since his engagement in Shenzhen Yuzhilu
Aviation Service Co., Ltd. In 2005, he had devoted continuous efforts in the
financial department. He is familiar with the electronic operation and financial
softwares, and he is skillful in online travel industry.

      Jing Xie. Since March 2005, Mr. Jing Xie has served as a Deputy General
Manager at the Company on February 2005. Mr. Xie graduated from Economics &
Business Faculty, University of Sydney, located in Sydney, Australia, with a
Bachelor of Commerce degree.

      Richard Cohen. Mr. Cohen serves as a member of our Audit Committee. Mr.
Cohen has more than 25 years experience in the financial services industry. From
1992 to 1995, Mr. Cohen served as President of General Media, Inc. where he was
responsible for raising over $250 million in a variety of financings, expanding
licensing opportunities in both Europe and Asia, and operating a company whose
revenues exceeded $150 million and which employed approximately 150 employees.
In 1999, Mr. Cohen served as the interim president of National Auto Credit,
Inc., a publicly traded sub-prime auto finance company. Since 2000, Mr. Cohen
has been involved as an investor/operator with a number of entrepreneurial
ventures, including Novation Capital, Inc., a niche financial service provider
which factors, pools and securitizes structured settlement awards. Mr. Cohen is
a Certified Public Accountant, and is considered an expert for audit committees
under the Sarbanes-Oxley Act of 2002. Mr. Cohen currently serves as a director
of Rodman & Renshaw (NASDAQ:RODM), Dune Energy (AMEX:DNE) and Helix Bio Medix
(OTCBB:HXBM) and chairs the audit Committee of RODM and HXBM. He received a BS
from the University of Pennsylvania (Wharton School) and an MBA from Stanford
University.


                                       27
<PAGE>

      Richard P. Randall. Mr. Randall's career includes extensive financial and
accounting experience as a Chief Financial Officer and Board Member for several
U.S. publicly traded companies, including Steven Madden Ltd., international
designer, marketer and retailer of footwear for women, men and children, and
Home System Group, a Chinese company that manufactures stainless steel barbecue
grills, ceiling fans and other electrical devices and is publicly owned in the
US. He serves as chair to the Audit Committee of these two companies. From 2002
to 2005, Mr. Randall served as the Executive Vice President, Chief Operating
Officer and Chief Financial Officer of Direct Holdings Worldwide, the parent of
Lillian Vernon Corp. and Time Life, where he was responsible for orchestrating
the sale of the Company, and from 2000 to 2001, Mr. Randall served as the Senior
Vice President and the Chief Financial Officer of Coach, Inc, a publicly traded
international designer and marketer of handbags and accessories, where he
oversaw the auditing process and SEC compliance. Mr. Randall provided consulting
services to Supreme International (renamed Perry Ellis International) and Mondo,
Inc., and was employed in the finance department of Revlon and is a member of
the American Institute of CPAs and New York Society of CPAs. Mr. Randall
received a degree in accounting from the City University of New York, Baruch
College in 1964 and has been certified as a CPA in New York State.

      James Treacy. Mr. Treacy brings more than 20 years of experience with
public companies. In 1994, he joined TMP Worldwide, now Monster Worldwide, as
chief executive officer of the company's Recruitment Advertising Division. In
1998, Monster appointed Mr. Treacy as executive vice president, COO and to its
board of directors. He became company president and COO in November 2001,
serving in those roles until his resignation in 2002. Prior to Monster, Mr.
Treacy was a senior vice president with WPP, USA. He was also with The Ogilvy
Group and before that was with Texaco, Inc. Mr. Treacy served on the board of
publicly-listed eBookers Public Limited Company, which was sold to Cendant (now
part of Travelport), in 2005. From March 2006 until March 2007, he served as a
director on the board of Dice Holdings, Inc. Currently, Mr. Treacy serves on the
President's Council of Valley Hospital and is an angel investor in several early
stage Internet companies. He works in a private business as well as in an
investor consultancy capacity.

Director Compensation.

      The following table sets forth a summary of compensation paid to Messrs.
Cohen, Randall and Treacy during the fiscal year ended December 31, 2007:

<TABLE>
<CAPTION>
                               Fees  earned or paid
Name                           in cash                  Option awards            All other compensation     Total
---------------------------    ---------------------    ---------------------    -----------------------    --------------
<S>                            <C>                      <C>                      <C>                        <C>
Richard Cohen                  $16,667                  $ 89,819                 N/A                        $106,486
Richard P. Randall             $ 8,333                  $114,934                 N/A                        $123,267
James Treacy                   $ 1,667                  $114,790                 N/A                        $116,457
</TABLE>


                                       28
<PAGE>

      Our compensation agreements with Messrs. Cohen, Randall and Treacy as
follows:

      Richard Cohen. On May 7, 2007, the Company entered into an agreement with
Mr. Cohen. Under the terms of the Agreement, Mr. Cohen is to receive $20,000
annually for his service on the Board of Directors, plus an additional $2,500
for serving on the Audit Committee. Pursuant to the Agreement, the Company
granted Mr. Cohen options to purchase 100,000 shares of the Company's common
stock, exercisable at a price of $1.95. The options are exercisable through May
2017 and vested with respect to 33,333 of the underlying shares
immediately on the date of grant, and the remaining underlying shares will vest
with respect to 33,333 and 33,334 on the first and second anniversaries of the
grant date, respectively, provided that, Mr. Cohen is still a director of or
otherwise engaged by the Company on such dates.

      Richard P. Randall. On September 6, 2007, the Company entered into an
agreement with Mr. Randall. Under the terms of the Agreement, Mr. Randall is to
receive $20,000 annually for his service on the Board of Directors, plus an
additional $7,500 for his service as Chairman of the Audit Committee. Pursuant
to the Agreement, the Company granted Mr. Randall options to purchase 100,000
shares of the Company's common stock, exercisable at a price of $2.85. The
options are exercisable until June 1, 2017, and vested with respect to 33,333 of
the underlying shares immediately on the date of grant, while the remaining
underlying shares will vest with respect to 33,333 and 33,334 on the first and
second anniversaries of the grant date, respectively, provided that, Mr. Randall
is still a director of or otherwise engaged by the Company on such dates.

      James Treacy. On December 7, 2007, the Company entered into an agreement
with Mr. Treacy. Under the terms of the Agreement, Mr. Treacy is to receive
$20,000 annually for his service on the Board of Directors. Pursuant to such
agreement, the Company granted Mr. Treacy options to purchase 100,000 shares of
the Company's common stock, exercisable at a price of $3.75. The options are
exercisable until November 1, 2017, and vested with respect to 33,333 of the
underlying shares immediately on the date of grant, while the remaining
underlying shares will vest with respect to 33,333 and 33,334 on the first and
second anniversaries of the grant date, respectively, provided that, Mr. Treacy
is still a director of or otherwise engaged by the Company on such dates.

Section 16(a) Beneficial Ownership Reporting Compliance

      Our common stock is not currently registered under the Securities Exchange
Act of 1934, as amended ("Exchange Act"), and accordingly our directors,
officers and holders of 10% or more of our common stock are not required to file
statements of beneficial ownership with regards to their ownership of our equity
securities under Section 16 of the Exchange Act. The reports and certain other
information under the Exchange Act filed by us with the Commission during our
fiscal years ended February 28, 2006 and 2007 and during the fiscal year ended
December 31, 2007 were filed pursuant to the rules under Section 15(d) of the
Exchange Act.


                                       29
<PAGE>

Code of Ethics

      We have not adopted a code of ethics to apply to our principal executive
officer, principal financial officer, principal accounting officer and
controller, or persons performing similar functions. We expect to prepare a Code
of Ethics in the near future

Board Committees and Independent Directors

      Our Board of Directors did not hold any formal meetings during fiscal year
ending December 31, 2007, though it did meet several times for discussions
relevant to the company's operations and strategic plans. It did act by
unanimous written consent on seven occasions.

      Our Board of Directors established an Audit Committee in May 2007. The
Audit Committee is responsible for reviewing the results and scope of the audit,
and other services provided by our independent auditors, and reviewing and
evaluating our system of internal controls. Our Audit Committee members are
Richard Cohen and Richard P. Randall. Our audit committee reviewed and discussed
with our outside auditor the financial statements included in all filings made
subsequent to its establishment. Our Board of Directors has determined that
Messrs. Cohen and Randall are "independent directors" within the meaning of Rule
10A-3 under the Exchange Act, as determined based upon the criteria for
"independence" set forth in the rules of The NASDAQ Stock Market, Inc.

      We have not established a Compensation Committee or a Nominating
Committee. Our independent directors have determined that we should follow the
corporate governance policies of the American Stock Exchange and we intend to
form the relevant committees and adopt appropriate policies in 2008.

Item 11. Executive Compensation.

      The following table sets forth information with respect to the
compensation of each of the named executive officers for services provided in
all capacities to the Company and its subsidiaries in the fiscal years ended
December 31, 2007, 2006 and 2005 in their capacity as such officers; such
individuals are also directors of the Company but receive no compensation for
their service in their capacity as director. No other executive officer or
former executive officer received more than $100,000 in compensation in the
fiscal years reported below.

Name and principal position             Year       Salary      Bonus      Total
---------------------------------       -----      ------      -----      -----

Jiangping Jiang,
Chief Executive Officer
(principal executive officer) (1)       2007       $9,230     $1,411     $10,641
                                        2006       $9,230     $1,411     $10,641
Xin Zhang,
Chief Financial Officer
(principal financial officer)           2007       $5,384      $461      $5,845
                                        2006       $5,384      $461      $5,845


                                       30
<PAGE>

      There are no current employment agreements between the Company and its
executive officers. Our executive officers have agreed to work without
remuneration until such time as we receive sufficient revenues necessary to
provide proper salaries to the officer and compensate the director for
participation.

      As described above, we have certain agreements with three of our
directors, Messrs. Cohen, Randall and Treacy.

      There are no annuity, pension or retirement benefits proposed to be paid
to officers, directors or employees of the corporation in the event of
retirement at normal retirement date pursuant to any presently existing plan
provided or contributed to by Company.

Outstanding Equity Awards at Fiscal Year End

<TABLE>
<CAPTION>

                                 Number of                Number of
                                 securities               securities
                                 underlying               underlying
                            unexercised options      unexercised options      Option exercise      Option expiration
Name                          (#) exercisable         (#) un-exercisable           price                  date
------------------          -------------------       ------------------      ---------------      -----------------
<S>                                <C>                      <C>                    <C>                <C>
Richard Cohen(1)                   66,666                   33,334                 $1.95               May 7, 2017
Richard P. Randall(1)              33,333                   66,667                 $2.85              June 1, 2017
James Treacy(1)                    33,333                   66,667                 $3.75              June 1, 2017
</TABLE>

(1) The options granted to each director vested as to one-third the date he
agreed to serve as a director (Mr. Cohen - May 7, Mr. Randall - July 1 and Mr.
Treacy - November 1) and will vest as to additional thirds on the anniversary of
such date in 2008 and 2009.

                                       31
<PAGE>

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

      Ownership

      As of March 24, 2008, we had 38,110,517 shares of common stock
outstanding. The following table sets forth certain information regarding the
beneficial ownership of our common stock as of that date by (i) each person who,
to our knowledge, beneficially owns more than 5% of our common stock; (ii) each
of our current directors and executive officers; and (iii) all of our current
directors and executive officers as a group:

<TABLE>
<CAPTION>

                             Name and Address                 Amount and nature of         Percent of
Title of class            of Beneficial Owner                 beneficial ownership            class
--------------            -----------------------             --------------------         ----------
<S>                   <C>                                          <C>                        <C>
Common Stock          Jiangping Jiang                              11,800,000                 31.0%
                      Huijie Gao                                           --                   --
                      Jing Xie                                             --                   --
                      Richard Cohen                                    66,666(1)                 *
                      Richard P. Randall                               33,333(1)                 *
                      James Treacy                                     33,333(1)                 *
                      Officers & directors as a group              11,933,332                 31.3%
</TABLE>

*     Represents less than 1%
(1)   Represents shares issuable pursuant to options which are currently
      exercisable. Excludes shares underlying 33,334 options in the case of Mr.
      Cohen and 66,667 options in the cases of Messrs. Randall and Treacy not
      exercisable within 60 days of the date of this report.

      Change in Control Arrangements

      There are currently no arrangements that would result in a change in
control of our Company.

Item 13. Certain Relationships and Related Transactions.

      Relationships and Related Transactions.

      In connection with the merger of our Company and Full Power, Ms. Jiang,
then a shareholder of Full Power was issued 11,800,000 shares of our Common
Stock.

      Except as otherwise disclosed herein or incorporated herein by reference,
there have not been any transactions, or proposed transactions, during the last
two years, to which the Company was or is to be a party, in which any director
or executive officer of the Company, any nominee for election as a director, any
security holder owning beneficially more than five percent of the common stock
of the Company, or any member of the immediate family of the aforementioned
persons had or is to have a direct or indirect material interesting any amount
that exceeded the lesser of $120,000 or one percent of the average of the
Company's total assets for the last two fiscal years.


                                       32
<PAGE>

      Director Independence.

      The OTC Bulletin Board, on which our common stock is currently traded,
does not maintain director independence standards, however, Messrs. Cohen,
Randall and Treacy qualify as independent directors under the guidelines of the
AMEX.


                                       33
<PAGE>

Item 14. Principal Accountant Fees and Services.

      In connection with our change in control effective pursuant to a merger
transaction, as disclosed as disclosed on our Current Report on Form 8-K filed
on July 12, 2006, our Board of Directors approved the engagement of Morgenstern,
Svoboda, & Baer, CPA's, P.C. for all audit and permissible non-audit services,
and dismissed Moore & Associates, Chartered the Company's prior certifying
accountant, in each case effective as of June 23, 2006.

      Our Audit Committee annually reviews the audit and permissible non-audit
services performed by our principal accounting firm and reviews and approves the
fees charged by our principal accounting firm. Our Audit Committee has
considered the role of Morgenstern, Svoboda, & Baer in providing tax and audit
services and other permissible non-audit services to us and has concluded that
the provision of such services, if any, was compatible with the maintenance of
such firm's independence in the conduct of its auditing functions.

      During fiscal years 2006 and 2007, the aggregate fees which we paid to or
were billed by Morgenstern, Svoboda & Baer, CPA's P.C. and Moore & Associates
for professional services were as follows:

<PAGE>

                                 Fiscal year ended December 31,
                                   2007                  2006
                                 --------              -------
                  Audit fees     $ 54,000              $31,000
          Audit-related fees     $193,000              $0
                    Tax fees     $0                    $0
              All other fees     $0                    $0

                                     PART IV

Item 15. Exhibits.

(A) Documents filed as a part of the report:

      (1)   Financial Statements;

            Our consolidated financial statements repuired by this item are
            submitted in a separate section beginning on page F-1 of this
            Report.

      (2)   Financial Statement Schedules

            None.

      (3)   Exhibits

            The information called for by this paragraph is contained in the
            Index to Exhibits which is incorporated herein by reference.


                                       34
<PAGE>

                                   SIGNATURES

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

                                    UNIVERSAL TRAVEL GROUP


Date: March 31, 2008                By: /s/ Jiangping Jiang
                                        ----------------------------------------
                                        Jiangping Jiang, Chief Executive Officer

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

Signature                                                              Date
---------                                                              ----


/s/ Jiangping Jiang                                               March 31, 2008
-------------------------------------------------                 --------------
Jiangping Jiang, Chief Executive Officer
(principal executive officer), Chair and Director


/s/ Huijie Gao                                                    March 31, 2008
-------------------------------------------------                 --------------
Huijie Gao, Vice President of Corporate Finance
(principal financial and accounting officer)


/s/ Jing Xie                                                      March 31, 2008
-------------------------------------------------                 --------------
Jing Xie, Secretary, Director


/s/ Richard Cohen                                                 March 31, 2008
-------------------------------------------------                 --------------
Richard Cohen, Director


/s/ Richard P. Randall                                            March 31, 2008
-------------------------------------------------                 --------------
Richard P. Randall, Director


/s/ James Treacy                                                  March 31, 2008
-------------------------------------------------                 --------------
James Treacy, Director


                                       35
<PAGE>

                                  Exhibit Index

Exhibit No.    Description
-----------    -----------------------------------------------------------------

2.1            Agreement and Plan of Merger between TAM of Henderson, Inc. and
               Registrant, incorporated herein by reference to Exhibit 2.1 to
               the Registrant's Current Report on Form 8-K filed on March 20,
               2006.

3.1            Articles of Incorporation, incorporated herein by reference to
               Exhibit 3.1 to the Registrant's Registration Statement on Form
               10SB12G filed on September 6, 2005.

3.2            Bylaws, incorporated herein by reference to Exhibit 3.2 to the
               Registrant's Registration Statement on Form 10SB12G filed on
               September 6, 2005.

3.3            Articles of Merger between TAM of Henderson, Inc. and Registrant,
               incorporated herein by reference to Exhibit 3.3 to the
               Registrant's Current Report on Form 8-K filed on March 27, 2006.

3.4            Amended and Restated Articles of Incorporation, changing our name
               from Tam of Henderson, Inc. to Universal Travel Group,
               incorporated herein by reference to Exhibit 3.1 to the
               Registrant's Current Report on Form 8-K filed on August 23, 2006.

4.1            2007 Equity Incentive Plan, incorporated herein by reference to
               Exhibit 4.1 to the Registrant's Registration Statement on Form
               S-8 (No. 333-140130) declared effective on January 22, 2007.

10.1           Shareholder Agreement between Registrant and Doreen E. Zimmerman,
               incorporated herein by reference to Exhibit 10.1 to the
               Registrant's Registration Statement on Form 10SB12G filed on
               September 6, 2005.

10.2           Share Purchase Agreement between Marcus Luna, Esq. representing a
               certain Selling Shareholder of Registrant, and Xiao Jun,
               incorporated herein by reference to Exhibit 10.1 to the
               Registrant's Current Report on Form 8-K filed on June 22, 2006.

10.3           Agreement and Plan of Merger by and among Registrant, Full Power
               Enterprise Global Limited ("FPEG"), and the shareholders of FPEG,
               incorporated herein by reference to Exhibit 10.1 to the
               Registrant's Current Report on Form 8-K filed on June 27, 2006.

10.4           Share Exchange Agreement among Registrant, Full Power Enterprise
               Global Limited, Shenzhen Yu Zhi Lu Aviation Service Company
               Limited, Shenzhen Speedy Dragon Enterprise Limited and the
               Shareholders of Shenzhen Speedy Dragon Enterprise Limited,
               incorporated herein by reference to Exhibit 10.1 to the
               Registrant's Current Report on Form 8-K filed on April 12, 2007.

10.5           Share Exchange Agreement among Registrant, Shenzhen Yu Zhi Lu
               Aviation Service Company Limited, Xi'an Golden Net Travel Serve
               Service Company Limited, and the Shareholders of Xi'an Golden Net
               Travel Serve Service Company Limited, incorporated herein by
               reference to Exhibit 10.1 to the Registrant's Current Report on
               Form 8-K filed on August 7, 2007.

10.6           Share Exchange Agreement among Registrant, Shenzhen Yu Zhi Lu
               Aviation Service Company Limited, Shanghai Lanbao Travel Service
               Company Limited, and the Shareholders of Shanghai Lanbao Travel
               Service Company Limited, incorporated herein by reference to
               Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed
               on August 10, 2007.

10.7           Agreement by and between Registrant and Richard P. Randall,
               incorporated herein by reference to Exhibit 10.1 to the
               Registrant's Current Report on Form 8-K filed on September 10,
               2007.

10.8           Share Exchange Agreement among Registrant, Shenzhen Yu Zhi Lu
               Aviation Service Company Limited, Foshan Overseas International
               Travel Service Co., Ltd., and the Shareholders of Foshan Overseas
               International Travel Service Co., Ltd., incorporated herein by
               reference to Exhibit 10.1 to the Registrant's Current Report on
               Form 8-K filed on September 25, 2007.

10.9           Share Exchange Agreement among Registrant, Shenzhen Yu Zhi Lu
               Aviation Service Company Limited, Tianjin Golden Dragon
               International Travel Service Co., Ltd., and the Shareholders of
               Tianjin Golden Dragon International Travel Service Co., Ltd.,
               incorporated herein by reference to Exhibit 10.1 to the
               Registrant's Current Report on Form 8-K filed on October 23,
               2007.

10.10          Agreement by and between Registrant and James Treacy,
               incorporated herein by reference to Exhibit 10.1 to the
               Registrant's Current Report on Form 8-K filed on December 12,
               2007.

10.11          Subscription Agreement by and among Registrant and the Investors
               listed on Schedule 1, incorporated herein by reference to Exhibit
               99.1 to the Registrant's Current Report on Form 8-K filed on
               February 11, 2008.

10.12          Rescission And Release Agreement by and among Registrant,
               Shenzhen Yu Zhi Lu Aviation Service Company Limited, a wholly
               owned subsidiary of Registrant, Tianjin Golden Dragon
               International Travel Service Co., Ltd., and the shareholders of
               Golden Dragon, incorporated herein by reference to Exhibit 99.1
               to the Registrant's Current Report on Form 8-K filed on February
               15, 2008.

21.1           List of Subsidiaries


31.1           Certification of Chief Executive Officer pursuant to Rule
               13a-14(a) under the Securities Exchange Act of 1934.

31.2           Certification of Chief Financial Officer pursuant to Rule
               13a-14(a) under the Securities Exchange Act of 1934.

32.1           Certification of Chief Executive Officer pursuant to Section 906
               of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.2           Certification of Chief Financial Officer pursuant to Section 906
               of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

<PAGE>

                             UNIVERSAL TRAVEL GROUP

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2007


                                      F-1
<PAGE>

                                TABLE OF CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                    F-3

CONSOLIDATED BALANCE SHEETS                                                F-4

CONSOLIDATED STATEMENTS OF INCOME                                          F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS                                    F-6-F-7

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                            F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                              F-9-F-17


                                      F-2
<PAGE>

MORGENSTERN, SVOBODA & BAER, CPA'S, P.C.

CERTIFIED PUBLIC ACCOUNTANTS
40 EXCHANGE PLACE, SUITE 1820
NEW YORK, N.Y.10005
TEL:  (212) 925-9490
FAX: (212) 226-9134
E-MAIL:  MSBCPAS@GMAIL.COM

1. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BOARD OF DIRECTORS AND STOCKHOLDERS OF
UNIVERSAL TRAVEL GROUP

WE HAVE AUDITED THE ACCOMPANYING CONSOLIDATED BALANCE SHEETS OF UNIVERSAL TRAVEL
GROUP AS OF DECEMBER 31, 2007 AND 2006, AND THE RELATED CONSOLIDATED STATEMENTS
OF INCOME, STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME, AND CASH FLOWS FOR
EACH OF THE YEARS IN THE TWO-YEAR PERIOD ENDED DECEMBER 31, 2007. UNIVERSAL
TRAVEL GROUP'S MANAGEMENT IS RESPONSIBLE FOR THESE FINANCIAL STATEMENTS. OUR
RESPONSIBILITY IS TO EXPRESS AN OPINION ON THESE FINANCIAL STATEMENTS BASED ON
OUR AUDITS.

WE CONDUCTED OUR AUDITS IN ACCORDANCE WITH THE STANDARDS OF THE PUBLIC COMPANY
ACCOUNTING OVERSIGHT BOARD (UNITED STATES). THOSE STANDARDS REQUIRE THAT WE PLAN
AND PERFORM THE AUDIT TO OBTAIN REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL
STATEMENTS ARE FREE OF MATERIAL MISSTATEMENT. THE COMPANY IS NOT REQUIRED TO
HAVE, NOR WERE WE ENGAGED TO PERFORM, AN AUDIT OF ITS INTERNAL CONTROL OVER
FINANCIAL REPORTING. OUR AUDIT INCLUDED CONSIDERATION OF INTERNAL CONTROL OVER
FINANCIAL REPORTING AS A BASIS FOR DESIGNING AUDIT PROCEDURES THAT ARE
APPROPRIATE IN THE CIRCUMSTANCES, BUT NOT FOR THE PURPOSE OF EXPRESSING AN
OPINION ON THE EFFECTIVENESS OF THE COMPANY'S INTERNAL CONTROL OVER FINANCIAL
REPORTING. ACCORDINGLY, WE EXPRESS NO SUCH OPINION. AN AUDIT ALSO INCLUDES
EXAMINING, ON A TEST BASIS, EVIDENCE SUPPORTING THE AMOUNTS AND DISCLOSURES IN
THE FINANCIAL STATEMENTS, ASSESSING THE ACCOUNTING PRINCIPLES USED AND
SIGNIFICANT ESTIMATES MADE BY MANAGEMENT, AS WELL AS EVALUATING THE OVERALL
FINANCIAL STATEMENT PRESENTATION. WE BELIEVE THAT OUT AUDITS PROVIDE A
REASONABLE BASIS FOR OUR OPINION.

IN OUR OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT FAIRLY, IN
ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF UNIVERSAL TRAVEL GROUP AS OF
DECEMBER 31, 2007 AND 2006, AND THE RESULTS OF ITS OPERATIONS AND ITS CASH FLOWS
FOR EACH OF THE YEARS IN THE TWO-YEAR PERIOD ENDED DECEMBER 31, 2007 IN
CONFORMITY WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF
AMERICA.


MORGENSTERN, SVOBODA & BAER CPA'S P.C.
CERTIFIED PUBLIC ACCOUNTANTS

NEW YORK, N.Y.
MARCH 18, 2008


                                      F-3
<PAGE>

                             UNIVERSAL TRAVEL GROUP
                           CONSOLIDATED BALANCE SHEETS
                            DECEMBER 31 2007 AND 2006

<TABLE>
<CAPTION>
                                    ASSETS                                 2007           2006
                                                                           ----           ----
<S>                                                                    <C>            <C>
CURRENT ASSETS

CASH AND CASH EQUIVALENTS                                              $ 2,671,684    $ 1,043,555
ACCOUNTS RECEIVABLE, NET                                                 5,403,820         18,788
OTHER RECEIVABLES AND DEPOSITS, NET                                      1,297,426        661,158
ACQUISITION DEPOSIT                                                             --      2,881,823
REFUNDABLE ACQUISITION DEPOSIT                                           1,453,050             --
DUE FROM SHAREHOLDERS                                                    1,444,818             --
TRADE DEPOSIT                                                            2,650,744        959,605
ADVANCES                                                                   616,861      1,831,558
REFUNDABLE DEPOSIT                                                              --         34,004
PREPAID EXPENSES                                                           713,668         31,842
                                                                       -----------    -----------
TOTAL CURRENT ASSETS                                                    16,252,071      7,462,333

PROPERTY & EQUIPMENT, NET                                                  127,393         51,555
INTANGIBLE ASSETS                                                           18,626         49,938
GOODWILL                                                                13,526,809             --
                                                                       -----------    -----------
                                                                        13,672,828        101,493
                                                                       -----------    -----------

TOTAL ASSETS                                                           $29,924,899    $ 7,563,826
                                                                       ===========    ===========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
NOTES PAYABLE - BANK                                                   $ 1,288,554    $        --
NOTE PAYABLE - OTHERS                                                    1,576,750             --
ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                    3,604,666      3,391,229
CUSTOMER DEPOSITS                                                        1,132,886             --
INCOME TAX PAYABLE                                                         664,995        263,850
                                                                       -----------    -----------
TOTAL CURRENT LIABILITIES                                                8,267,851      3,655,079
                                                                       ===========    ===========

STOCKHOLDERS' EQUITY

COMMON STOCK, $.001 PAR VALUE, 70,000,000
SHARES AUTHORIZED, 36,809,036 AND 30,450,000 ISSUED AND OUTSTANDING         36,810         30,450
ADDITIONAL PAID IN CAPITAL                                               8,601,534        332,013
OTHER COMPREHENSIVE INCOME                                                 545,164        103,811
STATUTORY RESERVE                                                          372,144             --
RETAINED EARNINGS                                                       12,101,396      3,442,473
                                                                       -----------    -----------
TOTAL STOCKHOLDERS' EQUITY                                              21,657,048      3,908,747
                                                                       -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $29,924,899    $ 7,563,826
                                                                       ===========    ===========
</TABLE>

                 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
                    THESE CONSOLIDATED FINANCIAL STATEMENTS.


                                      F-4
<PAGE>

                             UNIVERSAL TRAVEL GROUP
                        CONSOLIDATED STATEMENTS OF INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

                                                      2007             2006
                                                      ----             ----

GROSS REVENUES,                                   $ 44,294,853     $ 10,013,788
COST OF SERVICES                                    29,519,012        4,594,376
                                                  ------------     ------------
GROSS PROFIT                                        14,775,841        5,419,412

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES         3,229,526        1,353,434

STOCK BASED COMPENSATION                               945,903          950,040
                                                  ------------     ------------
                                                     4,175,429        2,303,474
                                                  ------------     ------------
INCOME FROM OPERATIONS                              10,600,412        3,115,938
                                                  ------------     ------------

OTHER INCOME (EXPENSE)
OTHER INCOME                                            25,105           36,383
INTEREST INCOME                                          3,293           11,994
INTEREST EXPENSE                                       (80,847)          (2,754)
                                                  ------------     ------------
TOTAL OTHER INCOME (EXPENSE)                           (52,449)          45,623
                                                  ------------     ------------
INCOME BEFORE INCOME TAXES                          10,547,963        3,161,561

PROVISION FOR INCOME TAXES                           1,852,069          603,083
                                                  ------------     ------------
NET INCOME                                        $  8,695,894     $  2,558,478
                                                  ============     ============

NET INCOME PER COMMON SHARE
   BASIC                                          $       0.26     $       0.07
   DILUTED                                        $       0.26     $       0.07

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
   BASIC                                            33,629,518       30,450,000
   DILUTED                                          33,779,518       30,450,000

                 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
                    THESE CONSOLIDATED FINANCIAL STATEMENTS.


                                      F-5
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        FOR THE YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                                     2007             2006
                                                                     ----             ----
<S>                                                             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES

NET INCOME                                                      $  8,695,894     $  2,558,478
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION                                         88,792           48,031
STOCK BASED COMPENSATION                                             945,903          950,040
(INCREASE) / DECREASE IN ASSETS:
ACCOUNTS RECEIVABLE                                               (1,773,123)         (18,788)
OTHER RECEIVABLE                                                    (546,172)        (661,158)
ADVANCES                                                           1,214,697       (1,831,558)
DUE FROM SHAREHOLDER                                                 747,471          642,608
LOANS SHAREHOLDERS
PREPAID EXPENSES                                                       4,896          (26,061)
TRADE DEPOSITS                                                    (1,177,822)        (397,041)
DEPOSITS                                                              34,004          (15,298)
INCREASE / (DECREASE) IN CURRENT LIABILITIES:
ACCOUNTS PAYABLE AND ACCRUED EXPENSES                             (1,504,385)          76,406
CUSTOMER DEPOSIT                                                     275,247               --
                                                                ------------     ------------
INCOME TAX PAYABLE                                                    97,657          106,973
                                                                ------------     ------------
TOTAL ADJUSTMENTS                                                 (1,592,835)      (1,125,846)
                                                                ------------     ------------
NET CASH PROVIDED BY(USED IN) OPERATING ACTIVITIES                 7,103,059        1,432,632
                                                                ------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES

PURCHASE OF PROPERTY & EQUIPMENT                                     (57,930)         (60,406)
ACQUISITION DEPOSITS                                               1,428,773       (1,580,740)
PAID FOR ACQUISITION - NET OF CASH ACQUIRED                      (10,008,642)              --
                                                                ------------     ------------
NET CASH USED BY INVESTING ACTIVITIES                             (8,637,799)      (1,641,146)
                                                                ------------     ============
CASH FLOWS FROM FINANCING ACTIVITIES

PROCEEDS FROM BANK LOAN - NET                                      1,288,554               --
                                                                                 ------------
NOTE PAYABLE - FOSHAN SHAREHOLDERS                                 1,576,750               --
                                                                ------------     ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                          2,865,304               --
                                                                ============     ============
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS         297,565           89,763
                                                                ------------     ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS                            1,628,129         (118,751)
CASH AND CASH EQUIVALENTS, BEGINNING BALANCE                       1,043,555     $  1,162,306
                                                                ------------     ------------
CASH AND CASH EQUIVALENTS, ENDING BALANCE                       $  2,671,684     $  1,043,555
                                                                ============     ============
</TABLE>


                                      F-6
<PAGE>

<TABLE>
      <S>                                                  <C>              <C>
      SUPPLEMENTAL DISCLOSURES:

      CASH PAID DURING THE YEAR FOR:
      INTEREST PAYMENTS                                    $     80,847     $      2,754
                                                           ============     ============
      INCOME TAXES                                         $  1,450,924     $    496,110
                                                           ============     ============
      OTHER NON-CASH TRANSACTIONS

      PURCHASED GOODWILL                                   $(13,526,809)

      FAIR VALUE OF ASSETS PURCHASED LESS CASH ACQUIRED      (2,178,333)

      ACQUISITION FINANCED WITH STOCK ISSUANCE                5,696,500
                                                           ------------
      ACQUISITION PAID FOR WITH CASH - NET OF ACQUIRED     $(10,008,642)
                                                           ============
</TABLE>

                 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
                    THESE CONSOLIDATED FINANCIAL STATEMENTS.


                                      F-7
<PAGE>

                             UNIVERSAL TRAVEL GROUP
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

<TABLE>
<CAPTION>
                                                  ADDITIONAL       OTHER                                         TOTAL
                          COMMON STOCK             PAID-IN     COMPREHENSIVE     RETAINED      STATUTORY    STOCKHOLDERS'
                      SHARES         AMOUNT        CAPITAL         INCOME        EARNINGS       RESERVE         EQUITY
                   -----------    -----------    -----------    -----------    -----------    -----------   -------------
<S>                 <C>           <C>            <C>            <C>            <C>            <C>            <C>
BALANCE
DECEMBER 31,
2006                30,450,000    $    30,450    $   332,013    $   103,811    $ 3,442,473    $        --    $ 3,908,747

STOCK PAID FOR
ACQUISITION          2,589,036          2,590      5,693,910                                                   5,696,500

FOREIGN
CURRENCY
TRANSLATION
ADJUSTMENTS                                                         441,353                                      441,353

ISSUANCE OF
SHARES FOR
COMPENSATION         3,770,000          3,770      1,579,630                                                   1,583,400

WARRANTS ISSUED                                      995,981                                                     995,981

EFFECT OF THE
ACQUISITION                                                                                       335,173        335,173

TRANSFER TO
STATUTORY
RESERVE                                                                            (36,971)        36,971             --

INCOME FOR THE
YEARS ENDED
12/31/2007                                                                       8,695,894                     8,695,894
                   -----------    -----------    -----------    -----------    -----------    -----------    -----------
BALANCE
DECEMBER 31,
2007                36,809,036    $    36,810    $ 8,601,534    $   545,164    $12,101,396    $   372,144    $21,657,048
                   ===========    ===========    ===========    ===========    ===========    ===========    ===========
</TABLE>

                 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
                    THESE CONSOLIDATED FINANCIAL STATEMENTS.


                                      F-8
<PAGE>

                             UNIVERSAL TRAVEL GROUP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

Note 1 - Organization

Universal Travel Group was Incorporated On January 28, 2004 Under the Laws of
the State of Nevada. Full Power Enterprise Global Limited - Bvi was Incorporated
Under the Laws of the British Virginia Islands. Shenzhen Yuzhilu Aviation
Service Co., Ltd was Incorporated On March 9, 1998 Under the Laws of the Peoples
Republic of China (Prc). Shenzhen Speedy Dragon Enterprises Limited was
Incorporated in August of 2002 Under the Laws of the Peoples Republic of China
(Prc), Xian Golden Net Travel Serve Services was Incorporated On July 25, 2001
Under the Laws of the Peoples Republic of China, Xian City, Shanghai Lanbao
Travel Service Co., Ltd, was Established in 2002 Under the Laws of Shanghai
China. Foshan Overseas International Travel Service Co., Ltd. was Incorporated
in 1990 Under the Laws of the Peoples Republic of China. Full Power Enterprise
Global Limited Owns 100% of the Shenzhen Yuzhilu Aviation Service Co., Ltd.
Collectively the Four Corporations are Referred to Herein as the Company.

The Company is Now Engaged in the Travel Business, Including Airline Ticketing,
Hotel Reservation Services and Air Cargo Transportation Services, Technological
Solutions to Travel Reservations, and Tour Planning and Tour Guide Services.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The Accompanying Consolidated Financial Statements Have Been Prepared in
Conformity With Accounting Principles Generally Accepted in the United States of
America. the Company's Functional Currency is the Chinese Renminbi; However the
Accompanying Consolidated Financial Statements Have Been Translated and
Presented in United States Dollars.

Translation Adjustment

As of December 31, 2007 and December 31, 2006 the Accounts of Universal Travel
Group Were Maintained, and Its Financial Statements Were Expressed, in Chinese
Yuan Renminbi (Cny). Such Financial Statements Were Translated Into U.s. Dollars
(Usd) in Accordance With Statement of Financial Accounts Standards (Sfas) No.
52, Foreign Currency Translation With the Cny as the Functional Currency.
According to the Statement, All Assets and Liabilities Were Translated At the
Current Exchange Rate, Stockholders Equity are Translated At the Historical
Rates and Income Statement Items are Translated At the Average Exchange Rate for
the Period. the Resulting Translation Adjustments are Reported Under Other
Comprehensive Income in Accordance With Sfas No. 130, Reporting Comprehensive
Income as a Component of Shareholders Equity. Transaction Gains and Losses are
Reflected in the Income Statement.

Use of Estimates

The Preparation of Financial Statements in Conformity With Generally Accepted
Accounting Principles Requires Management to Make Estimates and Assumptions That
Affect the Reported Amounts of Assets and Liabilities and Disclosure of
Contingent Assets and Liabilities At the Date of the Financial Statements and
the Reported Amounts of Revenues and Expenses During the Reporting Period.
Actual Results Could Differ From Those Estimates.


                                      F-9
<PAGE>

Principles of Consolidation

The Consolidated Financial Statements Include the Accounts of Universal Travel
Group and Its Wholly Owned Subsidiaries Shenzhen Yuzhilu Aviation Service Co.,
Ltd, Shenzhen Speedy Dragon Enterprises Limited, Shanghai Lanbao Travel Service
Co., Ltd, Xian Golden Net Travel Serve Services, Ltd., Foshan Overseas
International Travel Service Co. Ltd. and Full Power Enterprise Global Limited
Collectively Referred to Herein as the Company. All Material Inter-company
Accounts, Transactions and Profits Have Been Eliminated in Consolidation.


                                      F-10
<PAGE>

                             UNIVERSAL TRAVEL GROUP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

Note 2 - Summary of Significant Accounting Policies (Continued)

Risks and Uncertainties

The Company is Subject to Substantial Risks From, Among Other Things, Intense
Competition Associated With the Industry in General, Other Risks Associated With
Financing, Liquidity Requirements, Rapidly Changing Customer Requirements,
Limited Operating History, Foreign Currency Exchange Rates and the Volatility of
Public Markets.

Contingencies

Certain Conditions May Exist as of the Date the Financial Statements are Issued.
These Conditions May Result in a Future Loss to the Company But Which Will Only
be Resolved When One or More Future Events Occur or Fail to Occur. the Company's
Management and Legal Counsel Assess Such Contingent Liabilities, and Such
Assessment Inherently Involves an Exercise of Judgment. in Assessing Loss
Contingencies Related to Legal Proceedings That are Pending Against the Company
or Unasserted Claims That May Result in Such Proceedings, the Company's Legal
Counsel Evaluates the Perceived Merits of Any Legal Proceedings or Unasserted
Claims as Well as the Perceived Merits of the Amount of Relief Sought or
Expected to be Sought.

If the Assessment of a Contingency Indicates That It is Probable That a Material
Loss has Been Incurred and the Amount of the Liability Can be Estimated, Then
the Estimated Liability Would be Accrued in the Company's Financial Statements.
If the Assessment Indicates That a Potential Material Loss Contingency is Not
Probable But is Reasonably Possible, or is Probable But Cannot be Estimated,
Then the Nature of the Contingent Liability, Together With an Estimate of the
Range of Possible Loss If Determinable and Material Would be Disclosed.

Loss Contingencies Considered to be Remote by Management are Generally Not
Disclosed Unless They Involve Guarantees, in Which Case the Guarantee Would be
Disclosed.

Cash and Cash Equivalents

Cash and Cash Equivalents Include Cash On Hand and Cash in Time Deposits,
Certificates of Deposit and All Highly Liquid Debt Instruments With Original
Maturities of Three Months or Less.

Accounts Receivable

The Company Maintains Reserves for Potential Credit Losses On Accounts
Receivable. Management Reviews the Composition of Accounts Receivable and
Analyzes Historical Bad Debts, Customer Concentrations, Customer Credit
Worthiness, Current Economic Trends and Changes in Customer Payment Patterns to
Evaluate the Adequacy of These Reserves. Terms of the Sales Vary. Reserves are
Recorded Primarily On a Specific Identification Basis. Allowance for Doubtful
Accounts Amounted to $ 73,115 and $74,945 as At December 31, 2007 and 2006
Respectively.

Property, Plant & EQUIPMENT

Property and Equipment are Stated At Cost. Expenditures for Maintenance and
Repairs are Charged to Earnings as Incurred; Additions, Renewals and Betterments
are Capitalized. When Property and Equipment are Retired or Otherwise Disposed
Of, the Related Cost and Accumulated Depreciation are Removed From the
Respective Accounts, and Any Gain or Loss is Included in Operations.
Depreciation of Property and Equipment is Provided Using the Straight-line
Method for Substantially All Assets With Estimated Lives Of:


                                      F-11
<PAGE>

Note 2 - Summary of Significant Accounting Policies (Continued)

      FURNITURE AND FIXTURES                              5 YEARS
      TRANSPORTATION EQUIPMENT                            5 YEARS
      OFFICE EQUIPMENT                                    5 YEARS
      LEASEHOLD IMPROVEMENTS                              5 - 10 YEARS

As of December 31, 2007 and 2006 Property, Plant & EQUIPMENT CONSIST OF THE
FOLLOWING:

                                                  2007             2006
                                                  ----             ----
      FURNITURE & FIXTURE                      $  18,247            6,267
      TRANSPORTATION EQUIP                       301,308           27,426
      OFFICE EQUIPMENT                           177,004           54,285
      LEASEHOLD IMPROVE                           31,374            9,403
                                               ---------        ---------
                                                 527,933           97,381
      ACCUMULATED DEPRECIATION                  (400,540)         (74,352)
                                               ---------        ---------
                                               $ 127,393           23,029
                                               =========        =========

Long-lived Assets

The Company Adopted Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-lived Assets (Sfas 144), Which
Addresses Financial Accounting and Reporting for the Impairment or Disposal of
Long-lived Assets and Supersedes Sfas No. 121, Accounting for the Impairment of
Long-lived Assets and for Long-lived Assets to be Disposed Of, and the
Accounting and Reporting Provisions of Apb Opinion No. 30, Reporting the Results
of Operations for a Disposal of a Segment of a Business. the Company
Periodically Evaluates the Carrying Value of Long-lived Assets to be Held and
Used in Accordance With Sfas 144. Sfas 144 Requires Impairment Losses to be
Recorded On Long-lived Assets Used in Operations When Indicators of Impairment
are Present and the Undiscounted Cash Flows Estimated to be Generated by Those
Assets are Less Than the Assets Carrying Amounts. in That Event, a Loss is
Recognized Based On the Amount by Which the Carrying Amount Exceeds the Fair
Market Value of the Long-lived Assets. Loss On Long-lived Assets to be Disposed
of is Determined in a Similar Manner, Except That Fair Market Values are Reduced
for the Cost of Disposal. Based On Its Review, the Company Believes That, as of
September 30, 2007 and December 31, 2006 There Were No Significant Impairments
of Its Long-lived Assets.

Fair Value of Financial Instruments

Statement of Financial Accounting Standard No. 107, Disclosures About Fair Value
of Financial Instruments, Requires That the Company Disclose Estimated Fair
Values of Financial Instruments. the Carrying Amounts Reported in the Statements
of Financial Position for Current Assets and Current Liabilities Qualifying as
Financial Instruments are a Reasonable Estimate of Fair Value.

Revenue Recognition

The Company's Revenue Recognition Policies are in Compliance With Staff
Accounting Bulletin (Sab) 104. Revenue is Recognized At the Date the Price is
Fixed or Determinable, the Delivery is Completed, No Other Significant
Obligations of the Company Exist and Collectibility is Reasonably Assured.
Payments Received Before All of the Relevant Criteria for Revenue Recognition
are Satisfied are Recorded as Unearned Revenue.


                                      F-12
<PAGE>

                             UNIVERSAL TRAVEL GROUP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

Note 2 - Summary of Significant Accounting Policies (Continued)

Advertising

Advertising Expenses Consist Primarily of Costs of Promotion for Corporate Image
and Product Marketing and Costs of Direct Advertising. the Company Expenses All
Advertising Costs as Incurred.

Income Taxes

The Company Utilizes Sfas No. 109, Accounting for Income Taxes, Which Requires
the Recognition of Deferred Tax Assets and Liabilities for the Expected Future
Tax Consequences of Events That Have Been Included in the Financial Statements
or Tax Returns. Under This Method, Deferred Income Taxes are Recognized for the
Tax Consequences in Future Years of Differences Between the Tax Bases of Assets
and Liabilities and Their Financial Reporting Amounts At Each Period End Based
On Enacted Tax Laws and Statutory Tax Rates Applicable to the Periods in Which
the Differences are Expected to Affect Taxable Income. Valuation Allowances are
Established, When Necessary, to Reduce Deferred Tax Assets to the Amount
Expected to be Realized.

Statement of Cash Flows

In Accordance With Sfas No. 95, Statement of Cash Flows, Cash Flows From the
Company's Operations is Based Upon the Local Currencies. as a Result, Amounts
Related to Assets and Liabilities Reported On the Statement of Cash Flows Will
Not Necessarily Agree With Changes in the Corresponding Balances On the Balance
Sheet.

Intangibles

Intangible Assets are Amortized Using the Straight-line Method Over Their
Estimated Period of Benefit. Evaluation of the Recoverability of Intangible
Assets is Made Annually to Take Into Account Events or Circumstances That
Warrant Revised Estimates of Useful Lives or That Indicate That Impairment
Exists. All of Our Intangible Assets are Subject to Amortization. No Impairments
of Intangible Assets Have Been Identified During Any of the Periods Presented.

Concentration of Credit Risk

Financial Instruments That Potentially Subject the Company to Concentrations of
Credit Risk are Cash, Accounts Receivable and Other Receivables Arising From Its
Normal Business Activities. the Company Places Its Cash in What It Believes to
be Credit-worthy Financial Institutions. the Company has a Diversified Customer
Base, Most of Which are in China. the Company Controls Credit Risk Related to
Accounts Receivable Through Credit Approvals, Credit Limits and Monitoring
Procedures. the Company Routinely Assesses the Financial Strength of Its
Customers And, Based Upon Factors Surrounding the Credit Risk, Establishes an
Allowance, If Required, for Uncollectible Accounts And, as a Consequence,
Believes That Its Accounts Receivable Credit Risk Exposure Beyond Such Allowance
is Limited.

Recent Accounting Pronouncements

In February 2006, Fasb Issued Sfas No. 155, Accounting for Certain Hybrid
Financial Instruments Sfas No. 155 Amends Sfas No 133, Accounting for Derivative
Instruments and Hedging Activities, and Sfaf No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities. Sfas No.
155, Permits Fair Value Re-measurement for Any Hybrid Financial Instrument That
Contains an Embedded Derivative That Otherwise Would Require Bifurcation,
Clarifies Which Interest-only Strips and Principal-only Strips are Not Subject
to the Requirements of Sfas No. 133, Establishes a Requirement to Evaluate
Interest in Securitized Financial Assets to Identify Interests That Are


                                      F-13
<PAGE>

Freestanding Derivatives or That are Hybrid Financial Instruments That Contain
an Embedded Derivative Requiring Bifurcation, Clarifies That Concentrations of
Credit Risk in the Form of Subordination are Not Embedded Derivatives, and
Amends Sfas No. 140 to Eliminate the Prohibition On the Qualifying
Special-purpose Entity From Holding a Derivative Financial Instrument That
Pertains to a Beneficial Interest Other Than Another Derivative Financial
Instrument. This Statement is Effective for All Financial Instruments Acquired
or Issued After the Beginning of the Company's First Fiscal Year That Begins
After September 15, 2006.

In March 2006, the Fasb Issued Fasb Statement No. 156, Accounting for Servicing
of Financial Assets - an Amendment to Fasb Statement No. 140. Statement 156
Requires That an Entity Recognize a Servicing Asset Or

Note 2 - Summary of Significant Accounting Policies (Continued)

Servicing Liability Each Time It Undertakes an Obligation to Service a Financial
Asset by Entering Into a Service Contract Under Certain Situations. the New
Standard is Effective for Fiscal Years Beginning After September 15, 2006. the
Company Does Not Expect Its Adoption of This New Standard to Have a Material
Impact On Its Financial Position Results of Operations or Cash Flows.

In September, 2006, Fasb Issued Sfas 157 `Fair Value Measurements'. This
Statement Defines Fair Value, Establishes a Framework for Measuring Fair Value
in Generally Accepted Accounting Principles (Gaap), and Expands Disclosures
About Fair Value Measurements. This Statements Applies Under Other Accounting
Pronouncements That Require or Permit Fair Value Measurements, the Board Having
Previously Concluded in Those Accounting Pronouncements That Fair Value is the
Relevant Measurement Attribute. Accordingly, This Statement Does Not Require Any
New Fair Value Measurements. However, for Some Entities, the Application of This
Statement Will Change Current Practice. This Statement is Effective for
Financial Statements Issued for Fiscal Years Beginning After November 15, 2007,
and Interim Periods Within Those Fiscal Years. the Management is Currently
Evaluating the Effect of This Pronouncement On Financial Statements.

In September 2006, Fasb Issued Sfas 158 `Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans - an Amendment of Fasb Statements
No. 87, 88, 106, and 132(R)' This Statement Improves Financial Reporting by
Requiring an Employer to Recognize the Over Funded or Under Funded Status of a
Defined Benefit Postretirement Plan (Other Than a Multiemployer Plan) as an
Asset or Liability in Its Statement of Financial Position and to Recognize
Changes in That Funded Statues in the Year in Which the Changes Occur Through
Comprehensive Income of a Business Entity or Changes in Unrestricted Net Assets
of a Not-for-profit Organization. This Statement Also Improves Financial
Reporting by Requiring an Employer to Measure the Funded Status of a Plan as of
the Date of Its Year-end Statement of Financial Position, With Limited
Exceptions. an Employer With Publicly Traded Equity Securities is Required to
Initially Recognize the Funded Status of a Defined Benefit Postretirement Plan
and to Provide the Required Disclosures as of the End of the Fiscal Year Ending
After December 15, 2006. an Employer Without Publicly Traded Equity Securities
is Required to Recognize the Funded Status of a Defined Benefit Postretirement
Plan and to Provide the Required Disclosures as of the End of the Fiscal Year
Ending After June 15, 2007. However, an Employer Without Publicly Traded Equity
Securities is Required to Disclose the Following Information in the Notes to
Financial Statements for a Fiscal Year Ending After December 15, 2006, But
Before June 16, 2007, Unless It has Applied the Recognition Provisions of This
Statement in Preparing Those Financial Statements.

A.    A Brief Description of the Provisions of This Statement
B.    The Date That Adoption is Required
C.    The Date the Employer Plans to Adopt the Recognition Provisions of This
      Statement, If Earlier.

The Requirement to Measure Plan Assets and Benefit Obligations as of the Date of
the Employer's Fiscal Year-end Statement of Financial Position is Effective for
Fiscal Years Ending After December 15, 2008. the Management is Currently
Evaluating the Effect of This Pronouncement On Financial Statements.


                                      F-14
<PAGE>

The Company Believes That the Adoption of These Standards Will Have No Material
Impact On Its Financial Statements.

In February, 2007, Fasb Issued Sfas 159 `The Fair Value Option for Financial
Assets and Financial Liabilities' - Including an Amendment of Fabs Statement No.
115. This Statement Permits Entities to Choose to Measure Many Financial
Instruments and Certain Other Items At Fair Value. This Statement is Expected to
Expand the Use of Fair Value Measurement, Which is Consistent With the Board's
Long-term Measurement Objectives for Accounting for Financial Instruments. This
Statement is Effective as of the Beginning of an Entity's First Fiscal Year That
Begins After November 15, 2007. the Management is Currently Evaluating the
Effect of This Pronouncement On Financial Statements.

Note 2 - Summary of Significant Accounting Policies (Continued)

Merger and Corporate Restructure

On June 26, 2006 the Company Entered Into an Agreement and Plan of Merger With
Full Power Enterprises Global Limited, a Holding Company That Owns All of the
Issued and Outstanding Shares of Shenzhen Yuzhilu Aviation Service Company
Limited, the Operating Company. in Substance the Agreement is a Recapitalization
of Shenzhen Yuzhilu Aviation Service Company's Capital Structure.

For Accounting Purposes, the Company Accounted for the Transaction as a Reverse
Acquisition and With Full Power Enterprises Global Limited Being the Surviving
Entity. the Company Did Not Recognize Goodwill or Any Intangible Assets in
Connection With the Transaction. Prior to the Agreement, the Company was an
Inactive Corporation With No Significant Assets and Liabilities.

The Accompanying Financial Statements Present the Historical Financial
Condition, Results of Operations and Cash Flows of the Operating Company Prior
to the Merger.

Note 3 - Trade Deposits and Advances

Trade Deposits Represents Amount Held by Airlines and Deposits. as of December
31, 2007 and 2006 the Company Had Paid $2,650,744 and $959,605 as Trade Deposits
Respectively.

During the Year, the Company Entered Into a Co-operation Agreement With an
Unrelated Company, to Assist That Company in Their Business Development by
Participating in That Business Operations and Providing Working Capital Funding.
as of December 31, 2007 the Company has Advanced This Company $616,861.

Note 4 - Compensated Absences

Regulation 45 of Local Prc Labor Law Entitles Employees to Annual Vacation Leave
After 1 Year of Service. in General All Leave Must be Utilized Annually, With
Proper Notification. Any Unutilized Leave is Cancelled.

Note 5 - Income Taxes

The Company Through Its Subsidiary Shenzhen Yuzhilu Aviation Service Co. is
Governed by the Income Tax Laws of the Prc. Operations in the United States of
America Have Incurred Net Accumulated Operating Losses for Income Tax Purposes.

Pursuant to the Prc Income Tax Laws, the Enterprise Income Tax (Eit) the Company
has a Varying Statutory Rate of 15% - 33%.


                                      F-15
<PAGE>

      THE FOLLOWING IS A
      RECONCILIATION OF INCOME
      TAX EXPENSE:
                                                   2007             2006
                                                   ----             ----

      CURRENT                                  $1,852,069       $  603,083
      DEFERRED                                         --               --
                                               ----------       ----------
      TOTAL                                    $1,852,069       $  603,083
                                               ==========       ==========


                                      F-16
<PAGE>

                             UNIVERSAL TRAVEL GROUP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

Note 6 - Committments

The Company Leases Various Office Facilities Under Month-to-month Arrangements.
Rental Expense for Leases Consisted of $184,552 and $65,698 for the Years Ended
December 31, 2007 and 2006 Respectively. the Company has Future Minimum Lease
Obligations as of December 31, 2007 as Follows:

12/31/2008        $ 155,855
12/31/2009        $  32,019
                  ---------
TOTAL             $ 187,874
                  =========

Note 7 - Notes Payable

The Following Table Summaries Notes Payable as of December 31, 2007:

LENDER                        DUE DATE          INTEREST RATE        OUTSTANDING
CHINA CONSTRUCTION BANK       JULY 29, 2008     6.25% PER ANNUM      $ 1,288,554

On September 20, 2007, the Company Entered Into a Share Exchange Agreement With
Foshan Overseas International Travel Service Co.("foi"), Led,, and the
Shareholders of Foi. the Shareholders of Foi Received a Promissory Note From the
Company Totaling $3,153,500. the Promissory Note Bears No Interest, With a
Maturity Date of One Year. Balance At December 31, 2007 is 1,576,750.

Note 8 - Common Stock

In January 2007 the Company Adopted the Universal Travel Group 2007 Equity
Incentive Plan. Under the Terms of This Plan the Company Issued 3,770,000 Shares
of the Company's Stock, Valued At $1,583,400, for Services Rendered During the
Period From October 2, 2006 Through February 28, 2007. as of December 31, 2007
the Financial Statements Include a Charge $633,360 With the Remaining $950,040
Being Expensed as of December 31, 2006.

Pursuant to a Share Exchange Agreement, the Company Issued 714,285 Shares of
Newly Issued Shares of Common Stock to the Former Shareholders of Shenzhen
Speedy Dragon Enterprises Limited. the Shares Were Valued At $1,000,000, Which
was the Fair Value of the Shares At the Date of Exchange Agreement. This Amount
is Included in the Cost of Net Assets and Goodwill Purchased.

Pursuant to a Share Exchange Agreement, the Company Issued 151,765 Shares of
Newly Issued Shares of Common Stock to the Former Shareholders of Xian Golden
Net Travel Serve Services, Inc. the Shares Were Valued At $258,000, Which was
the Fair Value of the Shares At the Date of Exchange Agreement. This Amount is
Included in the Cost of Net Assets and Goodwill Purchased.

Pursuant to a Share Exchange Agreement, the Company Issued 600,000 Shares of
Newly Issued Shares of Common Stock to the Former Shareholders of Shanghai
Lanbao Travel Services Co., Ltd. the Shares Were Valued At $1,092,000, Which was
the Fair Value of the Shares At the Date of Exchange Agreement. This Amount is
Included in the Cost of Net Assets and Goodwill Purchased.

Pursuant to a Share Exchange Agreement, the Company Issued 1,122,986 Shares of
Newly Issued Shares of Common Stock and a Promissory Note to the Former
Shareholders of Foshan Overseas International Travel Service Co., Ltd.. the
Shares Were Valued At $ 3,346,500, Which was the Fair Value of the Shares At the
Date of Exchange Agreement. This Amount is Included in the Cost of Net Assets
and Goodwill Purchased.


                                      F-17
<PAGE>

Note 9 - Stock Warrants, Options, and Compensation

On May 7, 2007, the Company Issued, to a Newly Appointed Board Member, an Option
Grant to Purchase 100,000 Shares of Common Stock At the Closing Price At $ 1.95.
the Options are Exercisable Until May 7, 2017.

On September 6, 2007, the Company Issued, to a Newly Appointed Board Member, an
Option Grant to Purchase 100,000 Shares of Common Stock At the Closing Price At
$ 2.85. the Options are Exercisable Until June 1, 2017.

On December 7, 2007, the Company Issued, to Another Newly Appointed Board
Member, an Option Grant to Purchase 100,000 Shares of Common Stock At the
Closing Price of $ 3.75. the Options are Exercisable Until November 1, 2017.

Stock Options--- the Option Holder has No Voting or Dividend Rights. the Company
Records the Expense of the Stock Options Over the Related Vesting Period. the
Options Were Valued Using the Black-scholes Option-pricing Model At the Model At
the Date of Grant Stock Option Pricing

                                                                   YEAR ENDED
                                                               DECEMBER 31, 2007

EXPECTED VOLATILITY                                                   128%
EXPECTED TERM (IN YEARS)
   RICHARD P. RANDALL                                                   9
   RICHARD M. COHEN                                                     9
   JAMES TREACY                                                        10
EXPECTED DIVIDENDS                                                     --
RISK-FREE RATE OF RETURN (WEIGHTED AVERAGE)                             2%
WEIGHTED AVERAGE GRANT-DATE FAIR VALUE                            $ 1.95-3.75

Expected Volatility is Based On the Historical Volatility of the Company's Stock
Price. the Expected Term Represents the Estimated Average Period of Time That
the Options Remain Outstanding. No Dividend Payouts Were Assumed, as the Company
has No Plans to Declare Dividends During the Expected Term of the Stock Options.
the Risk-free Rate of Return Reflects the Weighted Average Interest Rate Offered
for Zero Coupon Treasury Bonds Over the Expected Term of the Options.

                                                                 AGGREGATE
                                               EXERCISE    REMAINING   INTRINSIC
                                     TOTAL       PRICE       LIFE        VALUE
                                  ----------  ----------  ----------  ----------

Outstanding, December 31, 2006            --          --          --          --
Granted in 2007                      100,000  $     2.85           9          --
                                     100,000        1.95           9          --
                                     100,000        3.75          10          --
Exercised in 2007                         --          --          --          --
                                  ----------  ----------  ----------  ----------
OUTSTANDING, DECEMBER 31, 2007       300,000                                  --
                                  ==========  ==========  ==========  ==========


                                      F-18
<PAGE>

Note 10 - Other Comprehensive Income

Balances of Related After-tax Components Comprising Accumulated Other
Comprehensive Income, Included in Stockholders Equity, At December 31, 2007 are
as Follows:

<TABLE>
<CAPTION>
                                                 FOREIGN CURRENCY    ACCUMULATED OTHER
                                                    TRANSLATION        COMPREHENSIVE
                                                    ADJUSTMENT            INCOME
                                                 ----------------    -----------------
<S>                                                  <C>                 <C>
BALANCE DECEMBER 31, 2006                            $103,811            $103,811
CHANGES FOR 12 MONTHS ENDED DECEMBER 31, 2007         441,353             441,353
                                                     --------            --------
BALANCE AT DECEMBER 31, 2007                         $545,164            $545,164
                                                     ========            ========
</TABLE>

Note 11 - Current Vulnerability Due to Certain Risk Factors

The Company's Operations are Carried Out in the Prc. Accordingly, the Company's
Business, Financial Condition and Results of Operations May be Influenced by the
Political, Economic and Legal Environments in the Prc, and by the General State
of the Prc's Economy. the Company's Business May be Influenced by Changes in
Governmental Policies With Respect to Laws and Regulations, Anti-inflationary
Measures, Currency Conversion and Remittance Abroad, and Rates and Methods of
Taxation, Among Other Things.

Note 12 - Major Customers and Credit Risk

The Company Derives Its Income From Various Airlines. Most Revenue is Cleared
Thru Iata, a Centralized Reporting Platform.

Note 13 - Subsequent Events

On February 4, 2008, the Company Received a Commitment for $ 3.5 Million in
Financing From Three Chinese Financial Institutions in Exchange for 1, 301,481
Shares of the Company's Common Stock, a Price of $ 2.70 Per Share. the Proceeds
Will be Used Exclusively to Reduce Debt From Past Acquisitions. the Funds are to
be Paid in Three Installments. On February 7, 2008, the Company Announced That
It has Received This Commitment.

On February 12, 2008, the Company entered into an agreement with Tianjin Golden
Dragon rescinding the Company's previously announced acquisition of 90% of the
outstanding capital stock of Tianjin Golden Dragon.


                                      F-19