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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10−Q

(Mark One)

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

For the quarterly period ended: March 31, 2011

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

For the transition period from ____________ to _____________

Commission File Number: 000-54274

ASIA LEECHDOM HOLDING
CORPORATION(Exact Name of Registrant as Specified in
Its Charter)

|Nevada                          | 26-3552219                          
|------------------------------- | ------------------------------------
|(State or other jurisdiction of | (I.R.S. Employer Identification No.)
|incorporation or organization)  |                                     

No.55 Miyun RoadNankai District, Tianjin City,
300111 Peoples Republic of China(Address of
principal executive offices, Zip Code)

(+86) 22 27640191(Registrants telephone
number, including area code)

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

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 whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

Yes [_]         No [_]

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 the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

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

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

Yes [_]         No [X]

The number of shares outstanding of each of the issuers
classes of common stock, as of May 11, 2011 is as follows:

|Class of Securities           | Shares Outstanding
|----------------------------- | ------------------
|Common Stock, $0.01 par value | 39,840,605        

---

|Asia Leechdom Holding Corporation                      
|-------------------------------------------------------
|Quarterly Report on Form 10-Q                          
|Three
      Months and Nine Months Ended March 31, 2011

TABLE OF CONTENTS

|PART I                                 |                                                                                           | 1 
|-------------------------------------- | ----------------------------------------------------------------------------------------- | --
|FINANCIAL INFORMATION                  | 1                                                                                        
|ITEM 1.                                | FINANCIAL STATEMENTS.                                                                     | 1 
|ITEM 2.                                | MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 19
|ITEM 3.                                | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK.                         | 25
|ITEM 4. CONTROLS AND
      PROCEDURES. | 26                                                                                       
|PART II                                |                                                                                           | 26
|OTHER INFORMATION                      | 26                                                                                       
|ITEM 1.                                | LEGAL PROCEEDINGS.                                                                        | 26
|ITEM 1A.                               | RISK FACTORS.                                                                             | 27
|ITEM 2.                                | UNREGISTERED SALES OF EQUITY SECURITIES AND
      USE OF PROCEEDS.                        | 27
|ITEM 3.                                | DEFAULTS UPON SENIOR
      SECURITIES.                                                    | 27
|ITEM 4.                                | (REMOVED AND RESERVED).                                                                   | 27
|ITEM 5.                                | OTHER INFORMATION.                                                                        | 27
|ITEM 6.                                | EXHIBITS.                                                                                 | 27

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PART IFINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

|ASIA LEECHDOM HOLDING CORPORATION                                
|-----------------------------------------------------------------
|CONSOLIDATED FINANCIAL STATEMENTS                                
|FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2011 AND
      2010

|                                                                                                                     | Page(s)
|-------------------------------------------------------------------------------------------------------------------- | -------
|Financial Statements                                                                                                 |        
|Consolidated Balance Sheets March 31, 2011 and June 30,
      2010                                                   | 2      
|Consolidated Statements of Income and
      Comprehensive Income Three and Nine Months Ended March 31, 2011 and 2010 | 3      
|Consolidated Statements of Cash Flows Nine Months Ended
      March 31, 2011 and 2010                                | 4      
|Notes to Consolidated Financial Statements                                                                           | 5 - 18 

- 1 -

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|ASIA LEECHDOM HOLDING CORPORATION AND SUBSIDIARIES
|--------------------------------------------------
|CONSOLIDATED BALANCE SHEETS                       

|ASSETS                                                                                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                         
|                                                                                                                                                         
|                                                                                                                                                         
|Current Assets:                                                                                                                                          
|Cash and
      equivalents                                                                                                                               
|Accounts receivable, net                                                                                                                                 
|Other
      receivables                                                                                                                                  
|Advances to material
      suppliers                                                                                                                     
|Inventory                                                                                                                                                
|Due from related party                                                                                                                                   
|Subscriptions receivable                                                                                                                                 
|Total Current Assets                                                                                                                                     
|                                                                                                                                                         
|Property, Plant & Equipment, net                                                                                                                         
|Advances to equipment suppliers                                                                                                                          
|Deposit for asset acquisition                                                                                                                            
|Construction in Progress                                                                                                                                 
|Intangible Assets, net                                                                                                                                   
|Total Assets                                                                                                                                             
|                                                                                                                                                         
|LIABILITIES AND STOCKHOLDERS'
      EQUITY                                                                                                               
|                                                                                                                                                         
|Current Liabilities:                                                                                                                                     
|Short-term loans                                                                                                                                         
|Accounts
      payable                                                                                                                                   
|Unearned revenue                                                                                                                                         
|Other payables                                                                                                                                           
|Taxes payable                                                                                                                                            
|Due to
      related party                                                                                                                               
|Accrued expenses                                                                                                                                         
|Total Current Liabilities                                                                                                                                
|                                                                                                                                                         
|Long Term Liabilities                                                                                                                                    
|Long-term loans                                                                                                                                          
|Deferred
      tax liability                                                                                                                             
|Total Liabilities                                                                                                                                        
|                                                                                                                                                         
|Stockholders' Equity:                                                                                                                                    
|Common stock,$0.001 par value, 200,000,000
      shares authorized; 39,840,605 shares issued and outstanding as of March
      31, 2011 and June 30, 2010
|Additional
      paid-in-capital                                                                                                                         
|Accumulated other comprehensive income                                                                                                                   
|Statutory reserve                                                                                                                                        
|Retained
      earnings                                                                                                                                  
|Total Stockholders' Equity                                                                                                                               
|Total
      Liabilities and Stockholders' Equity                                                                                                         

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

- 2 -

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|ASIA LEECHDOM HOLDING CORPORATION AND SUBSIDIARIES                    
|----------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE
      INCOME
|(UNAUDITED)                                                           

|                                                     |   | Three Months Ended March 31, |  |   | Nine Months Ended March 31, | 
|---------------------------------------------------- | - | ---------------------------- |  | - | --------------------------- | 
|                                                     |   | 2011                         |  |   | 2010                        | 
|                                                     |   |                              |  |   |                             | 
|Net Revenue                                          | $ | 23,517,492                   |  | $ | 18,821,514                  | 
|                                                     |   |                              |  |   |                             | 
|Cost of Revenue                                      |   | 13,609,715                   |  |   | 9,524,027                   | 
|                                                     |   |                              |  |   |                             | 
|Gross Profit                                         |   | 9,907,777                    |  |   | 9,297,487                   | 
|                                                     |   |                              |  |   |                             | 
|Operating Expenses                                   |   |                              |  |   |                             | 
|Selling                                              |   | 353,478                      |  |   | 176,910                     | 
|Research and development                             |   | 325,983                      |  |   | 453,157                     | 
|General and administrative                           |   | 675,128                      |  |   | 388,484                     | 
|Total operating expenses                             |   | 1,354,589                    |  |   | 1,018,551                   | 
|                                                     |   |                              |  |   |                             | 
|Income From Operations                               |   | 8,553,188                    |  |   | 8,278,936                   | 
|                                                     |   |                              |  |   |                             | 
|Other Income (Expense)                               |   |                              |  |   |                             | 
|Interest income                                      |   | 1,376                        |  |   | 8,671                       | 
|Interest expense                                     |   | -67,742                      |  |   | -75,109                     | 
|Other income                                         |   | 245,866                      |  |   | 75,695                      | 
|Other expense                                        |   | -                            |  |   | -23,651                     | 
|Total other (expenses) income                        |   | 179,500                      |  |   | -14,394                     | 
|                                                     |   |                              |  |   |                             | 
|Income Before Income Taxes                           |   | 8,732,688                    |  |   | 8,264,542                   | 
|                                                     |   |                              |  |   |                             | 
|Provision For Income Taxes                           |   | 2,268,033                    |  |   | 2,109,066                   | 
|                                                     |   |                              |  |   |                             | 
|Net Income                                           |   | 6,464,655                    |  |   | 6,155,476                   | 
|                                                     |   |                              |  |   |                             | 
|Other Comprehensive Income (Loss)                    |   | 819,579                      |  |   | -43,910                     | 
|                                                     |   |                              |  |   |                             | 
|Comprehensive Income                                 | $ | 7,284,234                    |  |   | 6,111,566                   | 
|                                                     |   |                              |  |   |                             | 
|Earnings Per Share                                   |   |                              |  |   |                             | 
|Basic                                                | $ | 0.16                         |  |   | 0.19                        | 
|Diluted                                              | $ | 0.16                         |  |   | 0.19                        | 
|                                                     |   |                              |  |   |                             | 
|Weighted average number of common shares outstanding |   |                              |  |   |                             | 
|Basic                                                |   | 39,840,605                   |  |   | 32,310,758                  | 
|Diluted                                              |   | 39,840,605                   |  |   | 32,310,758                  | 

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

- 3 -

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|ASIA LEECHDOM HOLDING CORPORATION AND SUBSIDIARIES
|--------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS             
|(UNAUDITED)                                       

|                                                                                        |   | Nine Months Ended March 31, | 
|--------------------------------------------------------------------------------------- | - | --------------------------- | 
|                                                                                        |   | 2011                        | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                    |   |                             | 
|Net Income                                                                              | $ | 18,786,030                  | 
|Adjustments to reconcile net income to net
      cash provided by operating activities: |   |                             | 
|Depreciation and amortization                                                           |   | 782,525                     | 
|Deferred taxes                                                                          |   | 87,395                      | 
|(Increase) / decrease in current assets:                                                |   |                             | 
|Accounts receivable                                                                     |   | -4,844,982                  | 
|Other receivables                                                                       |   | -879,857                    | 
|Advances to
      material suppliers                                                    |   | -3,165,230                  | 
|Due from related party                                                                  |   | 3,600,197                   | 
|Inventory                                                                               |   | -410,315                    | 
|Increase / (decrease) in current liabilities:                                           |   |                             | 
|Accounts payable                                                                        |   | 1,686,327                   | 
|Other payables                                                                          |   | -343,200                    | 
|Due to related
      party                                                              |   | -4,565,046                  | 
|Taxes payable                                                                           |   | 496,422                     | 
|Accrued expenses                                                                        |   | 27,873                      | 
|Unearned revenue                                                                        |   | -671,925                    | 
|Total Adjustments                                                                       |   | -8,199,816                  | 
|Net cash provided by operating activities                                               |   | 10,586,214                  | 
|                                                                                        |   |                             | 
|CASH FLOWS FROM INVESTING ACTIVITIES                                                    |   |                             | 
|Advances to equipment suppliers                                                         |   | -5,808,490                  | 
|Purchase of intangible assets                                                           |   | -3,671,925                  | 
|Purchase of property, plant &
      equipment                                           |   | -4,760,555                  | 
|Investments in construction in progress                                                 |   | -389,530                    | 
|Net cash used in investing
      activities                                             |   | -14,630,500                 | 
|                                                                                        |   |                             | 
|CASH FLOWS FROM FINANCING ACTIVITIES                                                    |   |                             | 
|Proceeds from loans                                                                     |   | 1,498,192                   | 
|Repayment of loans                                                                      |   | -190,000                    | 
|Collections on subscriptions receivable                                                 |   | 3,007,224                   | 
|Payment of financing costs                                                              |   | -682,109                    | 
|Net cash provided by financing activities                                               |   | 3,633,307                   | 
|                                                                                        |   |                             | 
|NET (DECREASE)/ INCREASE IN CASH AND EQUIVALENTS                                        |   | -410,979                    | 
|                                                                                        |   |                             | 
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND EQUIVALENTS                                 |   | 562,578                     | 
|                                                                                        |   |                             | 
|CASH AND EQUIVALENTS, BEGINNING BALANCE                                                 |   | 14,498,707                  | 
|                                                                                        |   |                             | 
|CASH AND EQUIVALENTS, ENDING BALANCE                                                    | $ | 14,650,306                  | 
|                                                                                        |   |                             | 
|SUPPLEMENTAL DISCLOSURES:                                                               |   |                             | 
|                                                                                        |   |                             | 
|Cash paid during the period for:                                                        |   |                             | 
|                                                                                        |   |                             | 
|Interest                                                                                | $ | 143,504                     | 
|Income taxes                                                                            | $ | 6,315,210                   | 

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

- 4 -

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|ASIA LEECHDOM HOLDING CORPORATION AND SUBSIDIARIES
|--------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        
|March 31, 2011                                    

Note 1 - ORGANIZATION AND DESCRIPTION OF
BUSINESS

Asia Leechdom Holding Corp. (hereinafter referred to as Asia
Leechdom or the Company), formerly, Bay Peak 6 Acquisition Corp., was
organized under the laws of the State of Arizona, in 2004, as VT French
Services, Inc. (VTFS), a wholly owned subsidiary of Visitalk Capital
Corporation, (VCC), which in turn was a wholly owned subsidiary of
Visitalk.com (Visitalk). As part of Visitalks Chapter 11 reorganization plan,
Asia Leechdom was a shell company with no assets or operations. VCC was
authorized by the Visitalk plan to be the reorganized debtor. Effective
September 11, 2008, the name of the Company was changed from VT French Services,
Inc. to Bay Peak 6 Acquisition Corp., in connection with the Companys
redomestication to Nevada. On June July 28, 2010, the Company changed its name
to Asia Leechdom Holding Corp., in connection with its reverse acquisition of
Asia Leechdom Holding Corp. (ALH), a New Jersey corporation. As a result of
the reverse acquisition, the Company now conducts its operations in the Peoples
Republic of China (the PRC) through ALHs wholly owned PRC subsidiary, Tianjin
BOAI Pharmaceutical Company Ltd. (BOAI Pharmaceutical) and its second tier
subsidiary, Tianjin BOAI Leechdom Technique Co., Ltd. (BOAI Leechdom).

On May 28, 2010, the Company completed a reverse acquisition
through a share exchange with ALH, whereby the Company issued the sole
shareholder of ALH, 32,310,758 shares of the Companys common stock, par value
$0.001, for 100% of ALHs issued and outstanding capital stock. ALH thereby
became the Companys wholly owned subsidiary and its subsidiary, BOAI
Pharmaceutical, became the Companys indirect subsidiary. In accordance with
Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) 805, Business Combinations, the Company recorded this merger as a
recapitalization which consolidated the Company, ALH and BOAI Pharmaceutical and
treated the Company as a shell at the time of the merger. According to
805-10-55-13, the acquirer usually is the combining entity whose relative size
(measured in, for example, assets, revenues, or earnings), is significantly
larger than that of the other. Since the Company was a shell at the time of the
merger while ALH had operations through its acquisition of BOAI Pharmaceutical
and was significantly larger than the Company was, under ASC 805, ALH was
considered the acquirer. Because the transaction was accounted for as a
recapitalization and not a business combination, pro forma information is not
presented.

ALH was incorporated on June 20, 2007 in New Jersey. On July 5,
2007, ALH acquired 100% of the shares of BOAI Pharmaceutical for $1,260,000. The
acquisition of BOAI Pharmaceutical was treated as an acquisition by an entity
under common control as Mrs. Xuecheng Xia, the major shareholder of BOAI
Pharmaceutical was also an ALH director and held an option to purchase equity
interests in ALH from ALHs sole shareholder. As a result the acquisition was
accounted for at historical cost in a manner similar to that in pooling of
interests accounting.

ALH, through its Chinese subsidiaries BOAI Pharmaceutical and
Tianjin BOAI Leechdom Technique Co., Ltd., is engaged in the research and
development, manufacture, distribution and technical support of pharmaceutical
products.

BOAI Pharmaceutical was formed as a PRC company on August 6,
2001. On June 24, 2010, BOAI Pharmaceutical increased its registered capital to
$7,175,405. The operations of BOAI Pharmaceutical are based in Tianjin, China.

BOAI Leechdom was formed as a PRC company on March 17, 1999 in
Tianjin China. On May 10, 2005, pursuant to a shareholder resolution, BOAI
Leechdom reduced its registered capital by $120,788 which was owned by Huan Bo
Hai Investment Service Company. After this capital reduction, the registered
capital of BOAI Leechdom is now $483,150.

On August 8, 2007, the original shareholders of BOAI Leechdom
transferred their respective equity in BOAI Leechdom to BOAI Pharmaceutical.
After the acquisition, BOAI Pharmaceutical became the sole shareholder of BOAI
Leechdom. BOAI Pharmaceutical and BOAI Leechdom were under common control prior
to the acquisition as the shareholders of BOAI Pharmaceutical were also the
owners of BOAI Leechdom before the acquisition. Accordingly, the acquisition of
the 100% equity interest in BOAI Leechdom by BOAI Pharmaceutical was accounted
for at historical cost in a manner similar to that in pooling of interests
accounting with ALH being the ultimate parent entity of BOAI Leechdom.

On February 27, 2010, Chenghai Du, the Companys controlling
stockholder, entered into a series of call option agreements with each of Ma
Dan, Xia Xuecheng, Wang Yan, Wang Yansheng, He Haiwei and Tian Mengchun, the
original shareholders and managements of BOAI Pharmaceutical (the Option
Holders), pursuant to which Mr. Du granted each of them an option to acquire an
amount of shares equal to 90% of the shares the Companys common stock issued to
Mr. Du in the reverse acquisition, at an exercise price of $0.0001 per share.
Each of them had the right to exercise their option during the period commencing
on the date of the option agreement and ending on the fifth anniversary of the
date thereof.

- 5 -

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On November 25, 2010, pursuant to the purchase agreement dated
on May 8, 2010, the Company, through two of its subsidiaries, acquired 100% of
the registered capital of Tianjin Qi Shi Leathers Ltd (TQSHL) and changed
TQSHLs name to Tianjin Boai Bio-Pharmaceutical Co., Ltd. The acquisition of
TQSHL was accounted for as an asset acquisition as the acquiree had no current
operations and did not have any operations since 2008. BOAI Leechdom invested
RMB 2,600,000 in TQSHL and BOAI Pharmaceutical invested RMB 37,400,000 to
increase its registered capital from RMB 2,600,000 to RMB 40,000,000. The
purchase price of RMB 80,000,000, which included RMB 40,000,000 (approximately
$6.1 million of liability assumed) was allocated to the assets acquired based on
their relative fair value. The Company assigned RMB 50,906,841 (approximately
$7.8 million) to the land use right, RMB 29,093,159 (approximately $4.4 million)
to building.

Note 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

Basis of presentation

The Consolidated Financial Statements were prepared in
accordance with generally accepted accounting principles in the United States of
America ("US GAAP"). The Companys functional currency is the Chinese Renminbi;
however the accompanying consolidated financial statements have been translated
and presented in United States Dollars ($).

Principle of consolidation

The accompanying consolidated financial statements include the
accounts of the Company, and its wholly-owned subsidiaries BOAI Pharmaceutical
and BOAI Leechdom. All significant inter-company accounts and transactions were
eliminated in the combination.

Use of estimates

The preparation of consolidated financial statements in
conformity with US GAAP 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 consolidated financial
statements and the amount of revenues and expenses during the reporting periods.
Management makes these estimates using the best information available when the
estimates are made. However, actual results could differ materially from those
results.

Foreign currency transactions and comprehensive income
(loss)

The accounts of BOAI Pharmaceutical and BOAI Leechdom 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 ASC 830, Foreign Currency Matters, with the CNY as
the functional currency. According to the Statement, all assets and liabilities
were translated at the exchange rate on the balance sheet date, stockholders
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 ASC 220, Comprehensive Income as a component of shareholders
equity.

Exchange gains and losses are recognized for the different
foreign exchange rates applied when the foreign currency assets and liabilities
are settled. Transaction gains and losses that arise from exchange rate
fluctuations on transactions denominated in a currency other than the functional
currency are included in the results of operations as incurred.

Cash and equivalents

For Statement of Cash Flows purposes, BOAI Pharmaceutical
considers all cash on hand and in banks, certificates of deposit and other
highly-liquid investments with maturities of three months or less, when
purchased, to be cash and equivalents.

Accounts receivable

The Company maintains allowances 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. The allowance for accounts receivable
was $0 and $146,780 as of March 31, 2011 (unaudited) and June 30, 2010.

Inventory

Inventory is valued at the lower of cost (determined on a
weighted average basis) or market. The management compares the cost of inventory with the net realizable value and an
allowance is made for writing down the inventory to its net realizable value, if
lower than the cost.

- 6 -

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Property, plant and equipment

Property, plant and equipment are recorded at cost. Gains or
losses on disposals are reflected as gain or loss in the year of disposal. The
cost of improvements that extend the life of plant, property, and equipment are
capitalized. These capitalized costs may include structural improvements,
equipment, and fixtures. All ordinary repair and maintenance costs are expensed
as incurred.

Depreciation for financial reporting purposes is provided using
the straight-line method over the following estimated useful lives of the
assets:

|Buildings                | 20 years  
|------------------------ | ----------
|Machinery and equipments | 5-10 years
|Office equipments        | 5 years   
|Vehicle                  | 8-10 years

Impairment of long-lived assets

Finite-lived intangible assets are amortized over their
respective useful lives and, along with other long-lived assets, are evaluated
for impairment at least annually, or periodically whenever events or changes in
circumstances indicate that their related carrying amounts may not be
recoverable in accordance with ASC 360, Property, Plant and Equipment.

In evaluating long-lived assets for recoverability, including
finite-lived intangibles and property and equipment, the Company uses its best
estimate of future cash flows expected to result from the use of the asset and
eventual disposition in accordance with ASC 360. To the extent estimated future
undiscounted net cash flows attributable to the asset are less than its carrying
amount, an impairment loss is recognized equal to the difference between the
carrying value of such asset and its fair value. Assets to be disposed whether
through sale or abandonment, are reported at the lower of carrying value or fair
value less costs to sell. The Company estimates fair value based on the
information available in making whatever estimates, judgments and projections
are considered necessary. There was no impairment of long-lived assets for the
nine months ended March 31, 2011 and 2010, respectively.

Revenue recognition

The Company's revenue recognition policies are in compliance
with Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB)
104. Sales revenue is recognized at the date of shipment to customers when a
formal arrangement exists, the price is fixed or determinable, the delivery is
completed, no other significant obligations of the Company exist and
collectability is reasonably assured. Payments received before all of the
relevant criteria for revenue recognition are satisfied are recorded as unearned
revenue. The Company's revenue consists of invoiced value of goods, net of a
value-added tax (VAT) and product return or sales discount allowance. The
Company does not offer unconditional right of return to its customers.

Income taxes

The Company accounts for income taxes using an asset and
liability approach which allows for the recognition and measurement of deferred
tax assets based upon the likelihood of realization of tax benefits in future
years. Under the asset and liability approach, deferred taxes are provided for
the net tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes. A valuation allowance is provided for deferred tax assets
if it is more likely than not these items will either expire before the Company
is able to realize their benefits, or that future deductibility is uncertain.

The Company records a valuation allowance for deferred tax
assets, if any, based on its estimates of its future taxable income as well as
its tax planning strategies when it is more likely than not that a portion or
all of its deferred tax assets will not be realized.

If the Company is able to utilize more of its deferred tax
assets than the net amount previously recorded when unanticipated events occur,
an adjustment to deferred tax assets would increase the Company net income when
those events occur. The Company does not have any significant deferred tax asset
or liabilities in the PRC tax jurisdiction.

- 8 -

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Fair value of financial instruments

The Company adopted the provisions of Accounting Standards
Codification (ASC) 820, Fair Value Measurements and Disclosures. ASC 820
clarifies the definition of fair value, prescribes methods for measuring fair
value, and establishes a fair value hierarchy to classify the inputs used in
measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets
for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets
and liabilities in active markets, quoted prices for identical or similar assets
and liabilities in markets that are not active, inputs other then quoted prices
that are observable, and inputs derived from or corroborated by observable
market data.

Level 3-Inputs are unobservable inputs which reflect the
reporting entitys own assumptions on what assumptions the market participants
would use in pricing the asset or liability based on the best available
information.

The carrying amounts reported in the balance sheets for cash,
accounts receivable, loan receivables, other receivables, advances to material
suppliers, short-term loan, accounts payable, advance from customers, other
payables and accrued expenses, approximate their fair market value due to the
short-term nature of these instruments.

As of the balance sheet dates, the estimated fair values of the
financial instruments were not materially different from their carrying values
as presented on the balance sheet. This is attributed to the short maturities of
the instruments and that interest rates on the borrowings approximate those that
would have been available for loans of similar remaining maturity and risk
profile at respective balance sheet dates.

Construction in progress

Construction in progress is stated at cost, unless events or
circumstances indicate that cost cannot be recovered, in which case the carrying
value is reduced to estimated fair value. Estimated fair value: (i) is based on
the Companys plans for the development of each property; and (ii) considers the
cost to complete and the estimated fair value of the completed projects.

Direct construction, development costs, property taxes and
other related costs to the construction projects are capitalized during periods
those activities which are necessary to get the projects ready for its intended
use. Capitalization ends when the construction is substantially completed and a
project is ready for its intended use.

Research and development

Research and development costs are expensed as incurred.

Segment reporting

The Company follows the provisions of ASC 280, Segment
Reporting, for reporting information about operating segments. Operating
segments are defined as components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and assess
performance. The Companys chief operating decision maker has been identified as
the Chief Executive Officer.

The Company operates in two reportable business segments - (1)
pharmaceutical manufacturing and (2) medicine wholesale. The Company's
reportable segments are strategic business units that offer different products.
The Company's reportable segments, although integral to the success of the
others, offer distinctly different products and services and require different
types of management focus. As such, these segments are managed separately.

The following table presents a summary of operating information
for the three and nine months ended March 31, 2011 (unaudited) and 2010
(unaudited) and balance sheet information as of March 31, 2011 (unaudited) and
June 30, 2010:

- 9 -

---

Nine Months Ended March 31, 2011
    
    Pharmaceutical
      Manufacturing
    
    
    Medicine Wholesale
    
    
    Inter-segment
      Elimination
    
    
    Non-operating
      Entities
    
    
    Consolidated TotalNet Sales
    $
    26,267,658
    
    $
    39,244,671
    
    $
    (349,989
    )
    $
    -
    
    $
    65,162,340Interest Income (expense)
    
    (114,741
    )
    
    (53,768
    )
    
    -
    
    
    -
    
    
    (168,509
    )Depreciation and Amortization
    
    342,267
    
    
    277,865
    
    
    -
    
    
    162,393
    
    
    782,525Segment assets
    
    62,142,171
    
    
    47,861,538
    
    
    (41,007,308
    )
    
    30,373,869
    
    
    99,370,270Segment net income (loss) before tax
    
    12,194,168
    
    
    13,874,306
    
    
    -
    
    
    (762,945
    )
    
    25,305,529Three Months Ended March
      31, 2011
    
    Pharmaceutical Manufacturing
    
    
    Medicine
      Wholesale
    
    
    Inter-segment Elimination
    
    
    Non-operating Entities
    
    
    Consolidated
      TotalNet Sales
    $
    8,237,859
    
    $
    15,298,685
    
    $
    (19,052
    )
    $
    -
    
    $
    23,517,492Interest Income (expense)
    
    (43,950
    )
    
    (22,415
    )
    
    -
    
    
    -
    
    
    (66,365
    )Depreciation and Amortization
    
    133,929
    
    
    101,488
    
    
    -
    
    
    111,580
    
    
    346,997Segment assets
    
    62,142,171
    
    
    47,861,538
    
    
    (41,007,308
    )
    
    30,373,869
    
    
    99,370,270Segment net income (loss) before tax
    
    3,207,654
    
    
    5,760,632
    
    
    -
    
    
    (235,598
    )
    
    8,732,688


|                                                       |   | Nine Months Ended             |   |   | Three Months Ended  |  
|------------------------------------------------------ | - | ----------------------------- | - | - | ------------------- | -
|Reconciliation of segment to consolidated incomes      |   | March 31, 2011                |   |   | March 31, 2011      |  
|                                                       |   |                               |   |   |                     |  
|Total segment income (Operating entities)              | $ | 26,068,474                    |   | $ | 8,968,286           |  
|Total segment income (Non-operating entities)          |   | (762,945                      | ) |   | (235,598            | )
|Consolidated income before income taxes                | $ | 25,305,529                    |   | $ | 8,732,688           |  
|                                                       |   |                               |   |   |                     |  
|Reconciliation of segment to
      consolidated assets |   |                               |   |   |                     |  
|                                                       |   | **As of March
      31,**2011 |   |   | As of June 30, 2010 |  
|Total segment assets (Operating entities)              | $ | 110,003,709                   |   | $ | 86,923,741          |  
|Total segment assets (Non-operating
      entities)    |   | 30,373,869                    |   |   | 10,355,722          |  
|Elimination of intersegment receivables                |   | (41,007,308                   | ) |   | (19,829,808         | )
|Consolidated assets                                    | $ | 99,370,270                    |   | $ | 77,449,655          |  

Nine Months Ended March 31, 2010
    
    Pharmaceutical
      Manufacturing
    
    
    Medicine Wholesale
    
    
    Inter-segment
      Elimination
    
    
    Non-operating
      Entities
    
    
    Consolidated TotalNet Sales
    $
    19,868,540
    
    $
    28,593,459
    
    $
    (212,985
    )
    $
    -
    
    $
    48,249,014Interest Income (expense)
    
    (84,522
    )
    
    (47,238
    )
    
    -
    
    
    (70,278
    )
    
    (202,038
    )Depreciation and Amortization
    
    303,182
    
    
    245,385
    
    
    -
    
    
    -
    
    
    548,567Segment assets
    
    45,933,363
    
    
    32,088,235
    
    
    (12,847,302
    )
    
    1,481,296
    
    
    66,655,592Segment net income (loss) before tax
    
    10,019,406
    
    
    11,720,575
    
    
    -
    
    
    (71,477
    )
    
    21,668,504


- 10 -

---

Three Months Ended March 31, 2010
    
    Pharmaceutical
      Manufacturing
    
    
    Medicine Wholesale
    
    
    Inter-segment
      Elimination
    
    
    Non-operating
      Entities
    
    
    Consolidated TotalNet Sales
    $
    7,267,930
    
    $
    11,602,241
    
    $
    (48,657
    )
    $
    -
    
    $
    18,821,514Interest Income (expense)
    
    (25,329
    )
    
    (17,684
    )
    
    -
    
    
    (23,425
    )
    
    (66,438
    )Depreciation and Amortization
    
    108,023
    
    
    81,628
    
    
    -
    
    
    -
    
    
    189,651Segment assets
    
    45,933,363
    
    
    32,088,235
    
    
    (12,847,302
    )
    
    1,481,296
    
    
    66,655,592Segment net income (loss) before tax
    
    3,475,152
    
    
    4,812,816
    
    
    -
    
    
    (23,426
    )
    
    8,264,542


|                                                    |   | Nine Months Ended |   |   | Three Months Ended |  
|--------------------------------------------------- | - | ----------------- | - | - | ------------------ | -
|Reconciliation of segment to consolidated incomes   |   | March 31, 2010    |   |   | March 31, 2010     |  
|Total segment income (Operating entities)           | $ | 21,739,981        |   | $ | 8,287,968          |  
|Total segment income (Non-operating
      entities) |   | (71,477           | ) |   | (23,426            | )
|Consolidated income before income taxes             | $ | 21,668,504        |   | $ | 8,264,542          |  

- 11 -

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Recent accounting pronouncements

On April 1, 2009, the FASB approved FSP FAS 141(R)-1,
Accounting for Assets Acquired and Liabilities Assumed in a Business
Combination That Arise from Contingencies, which amends FAS 141(R), as
incorporated into ASC 805, and eliminated the distinction between contractual
and non-contractual contingencies. Under the updated standard an acquirer is
required to recognize at fair value an asset acquired or liability assumed in a
business combination that arises from a contingency if the acquisition-date fair
value of that asset or liability can be determined during the measurement
period. If the acquisition-date fair value cannot be determined, the acquirer
applies the recognition criteria in ASC 450, Contingencies to determine
whether the contingency should be recognized as of the acquisition date or after
it. This guidance is effective for assets or liabilities arising from
contingencies in business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. The adoption of such standard had no material impact on our
consolidated financial statements.

In April 2009, the FASB issued FSP No. FAS 157-4, Determining
Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly as
incorporated into ASC 820, Fair Value Measurements and Disclosures. The
guidance relates to determining fair values when there is no active market or
where the price inputs being used represent distressed sales. It reaffirms what
FASB ASC 820 states is the objective of fair value measurementto reflect how
much an asset would be sold for in an orderly transaction (as opposed to a
distressed or forced transaction) at the date of the financial statements under
current market conditions. Specifically, it reaffirms the need to use judgment
to ascertain if a formerly active market has become inactive and in determining
fair values when markets have become inactive. This guidance is effective for
interim and annual periods ended after June 15, 2009, but entities may early
adopt this guidance for the interim and annual periods ended after March 15,
2009. The adoption of such standard had no material impact on our consolidated
financial statements.

In May 2009, the FASB issued ASC 855, Subsequent Events,which
establishes general standards of accounting for and disclosure of events that
occur after the balance sheet date but before financial statements. The
statement is effective for interim and annual periods ended after June 15, 2009.
The standard was subsequently amended by FASB Accounting Standards Update
(ASU) 2010-09 which exempts an entity that is an SEC filer from the
requirement to disclose the date through which subsequent events have been
evaluated.

In June 2009, the FASB issued FASB ASU 2009-01, which amends
ASC 105, Generally Accepted Accounting Principles (Statement of Financial
Accounting Standards (SFAS) No. 168, The FASB Accounting Standards
Codification TM and the Hierarchy of Generally Accepted Accounting Principles 
a replacement of FASB Statement No. 162, ) , which establishes the FASB
Accounting Standards Codification TM (Codification) as the source of
authoritative generally accepted accounting principles in the United States
(GAAP) for nongovernmental entities. The Codification does not change GAAP.
Instead, it takes the thousands of individual pronouncements that currently
comprise GAAP and reorganizes them into approximately 90 accounting Topics, and
displays all Topics using a consistent structure. Contents in each Topic are
further organized first by Subtopic, then Section and finally Paragraph. The
Paragraph level is the only level that contains substantive content. Citing
particular content in the Codification involves specifying the unique numeric
path to the content through the Topic, Subtopic, Section and Paragraph
structure. FASB suggests that all citations begin with FASB ASC. Changes to
the ASC subsequent to June 30, 2009 are referred to as Accounting Standards
Updates.

In August 2009, the FASB issued ASU 2009-5, Measuring
Liabilities at Fair Value. ASU 2009-05 amends ASC 820, Fair Value
Measurements. Specifically, ASU 2009-05 provides clarification that in
circumstances in which a quoted price in an active market for the identical
liability is not available, a reporting entity is required to measure fair value
using one or more of the following methods: 1) a valuation technique that uses
a) the quoted price of the identical liability when traded as an asset or b)
quoted prices for similar liabilities or similar liabilities when traded as
assets and/or 2) a valuation technique that is consistent with the principles of
ASC 820 of the Accounting Standards Codification (e.g. an income approach or
market approach). ASU 2009-05 also clarifies that when estimating the fair value
of a liability, a reporting entity is not required to adjust to include inputs
relating to the existence of transfer restrictions on that liability. The
adoption of such standard had no material impact on our consolidated financial
statements.

In September 2009, the Emerging Issues Task Force reached final
consensus on ASU 2009-13, Revenue Arrangements with Multiple Deliverables. ASU
2009-13 addresses how to determine whether an arrangement involving multiple
deliverables contains more than one unit of accounting, and how the arrangement
consideration should be allocated among the separate units of accounting. This
ASU will be effective prospectively for revenue arrangements entered into or
materially modified in years beginning on or after June 15, 2010. Early adoption
is permitted. The adoption of such standard had no material impact on our
consolidated financial statements.

- 12 -

---

In December 2009, the FASB issued ASU 2009-17, Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities.
This ASU amends ASC 810, Consolidation, eliminates exceptions to consolidating
qualifying special-purpose entities, contains new criteria for determining the
primary beneficiary, and increases the frequency of required reassessments to
determine whether a company is the primary beneficiary of a variable interest
entity. This ASU is effective for years beginning after November 15, 2009, which
for the Company is July1, 2010, with earlier adoption prohibited. The Company
believes the adoption of ASU 2009-17 would not have a material effect on its
consolidated financial statements.

In April 2010, FASB issued an amendment to Stock Compensation.
The amendment clarifies that an employee stock-based payment award with an
exercise price denominated in the currency of a market in which a substantial
portion of the entitys equity shares trades should not be considered to contain
a condition that is not a market, performance, or service condition. Therefore,
an entity would not classify such an award as a liability if it otherwise
qualifies as equity. The amendments are effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2010. The
Company determined the adoption of this guidance had no material impact on its
financial statements.

In December 2010, FASB issued an amendment to the disclosure of
supplementary pro forma information for business combinations. The amendments in
this ASU 2010-20 specify that if a public entity presents comparative financial
statements, the entity should disclose revenue and earnings of the combined
entity as though the business combination that occurred during the current year
had occurred as of the beginning of the comparable prior annual reporting period
only. The amendments also expand the supplemental pro forma disclosures to
include a description of the nature and amount of material, nonrecurring pro
forma adjustments directly attributable to the business combination included in
the reported pro forma revenue and earnings. The amendments are effective
prospectively for business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2010. Early adoption is permitted, but was not elected.

Note 3 - INVENTORY

Inventory consists of the following as of March 31, 2011
(unaudited) and June 30, 2010:

|                                    |   | 2011      |  |   | 2010      | 
|----------------------------------- | - | --------- |  | - | --------- | 
|Supplies, packing and raw materials | $ | 918,692   |  | $ | 1,177,057 | 
|Finished goods                      |   | 6,395,291 |  |   | 5,311,841 | 
|Work in process                     |   | 659,257   |  |   | 772,319   | 
|Total                               | $ | 7,973,240 |  | $ | 7,261,216 | 

Note 4 - ADVANCE TO MATERIAL SUPPLIERS

The Company advanced payments to several medicine and package
materials suppliers to support increasing production with competitive
procurement cost. As of March 31, 2011, the Company made deposits of $6,187,694.
The deposit will be reclassified to the respective accounts under inventory upon
delivery and transfer of legal titles.

Note 5 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following as of
March 31, 2011 (unaudited) and June 30, 2010:

|                               |   | 2011       |   |   | 2010       |  
|------------------------------ | - | ---------- | - | - | ---------- | -
|Building and improvements      | $ | 23,438,145 |   | $ | 16,273,307 |  
|Machinery and equipment        |   | 953,291    |   |   | 915,816    |  
|Office equipment               |   | 448,769    |   |   | 91,660     |  
|Vehicles                       |   | 555,183    |   |   | 480,185    |  
|Total                          |   | 25,395,388 |   |   | 17,760,968 |  
|Less: Accumulated Depreciation |   | (3,118,344 | ) |   | (2,303,702 | )
|Net                            | $ | 22,277,044 |   | $ | 15,457,266 |  

Depreciation (unaudited) for the three months ended March 31,
2011 and 2010 was $258,972 and $189,464, respectively. Depreciation (unaudited)
for the nine months ended March 31, 2011 and 2010 was $711,365 and $530,484,
respectively.

As of March 31, 2011 (unaudited) and June 30, 2010, the net
book value of buildings pledged as collateral for bank loans were $9,047,906 and
$9,509,877, respectively. See Note 9.

- 13 -

---

Note 6 - ADVANCE TO EQUIPMENT SUPPLIERS

The Company advanced payments to several equipment suppliers in
order to support increasing production with competitive procurement cost. As of
March 31, 2011, the Company made total deposits in the amount of $12,793,111 and
expects to pay approximately $7.8 million moving forward. The deposit will be
reclassified to the respective accounts under fixed asset upon delivery and
transfer of legal titles.

Note 7 - CONSTRUCTION IN PROGRESS

As of March 31, 2011 (unaudited) and June 30, 2010, the
construction in progress of the Company consisted of an office building.

As of March 31, 2011 (unaudited), BOAI Leechdom expects to pay
an additional $92,580 to complete the construction of this office building.

Note 8- INTANGIBLE ASSETS

As of March 31, 2011 (unaudited) and June 30, 2010, the Company
has intangible assets including Paclitaxel ongoing project, pharmaceutical
production permits, land use right and software.

|                                  |   | 2011       |   |   | 2010      |  
|--------------------------------- | - | ---------- | - | - | --------- | -
|Pharmaceutical production permits | $ | 351,049    |   | $ | 337,594   |  
|Paclitaxel                        |   | 6,563,090  |   |   | 6,311,540 |  
|Land use right                    |   | 7,875,749  |   |   | 101,782   |  
|Software                          |   | 3,689      |   |   | 2,132     |  
|Total                             |   | 14,793,577 |   |   | 6,753,046 |  
|Less: Accumulated Amortization    |   | (365,058   | ) |   | (277,570  | )
|Net                               | $ | 14,428,519 |   | $ | 6,475,476 |  

The pharmaceutical production permits were obtained in December
2001, updated in January 2006 and 2011, and are valid until January 2016. With
these production permits, the Company is authorized to manufacture certain types
of Chinese medicines.

The Company obtained the Paclitaxel cell cultivation method
from Tsinghua University in 2009 and paid approximately $6.0 million as of March
31, 2011 (unaudited). The first payment of approximately $3.0 million was paid
in early 2009 when the Company obtained all Paclitaxel cell cultivation
information. The second payment of approximately $3.0 million was paid in 2009
after the Company successfully completed trial production. The third payment
will be paid once the scale production is proven successful. At March 31, 2011,
the amount due $457,890 was in other payables. See Note 10.

Our technology could increase the success ratio and consistency
of the produced product to treat patients with lung, ovarian, breast, head and
neck cancer. We intend to ramp up the scale and enter into commercial production
once the new facility for Paclitaxel production is available.

Note 9  LOANS

Short-term loans payable at March 31, 2011 (unaudited) and June
30, 2010 comprised of the following:

|Description                                                   |   | 2011    |  |   | 2010      | 
|------------------------------------------------------------- | - | ------- |  | - | --------- | 
|Loans payable to Tianjin Agriculture Credit
      Union Bank: |   |         |  |   |           | 
|Due by January 28, 2011. Interest at
      5.841% p.a.        | $ |         |  | $ | 1,467,800 | 
|Due by March 8, 2011.
      Interest at 5.841% p.a.           |   |         |  |   | 278,882   | 
|Due by May 10, 2011. Interest at 5.841%
      p.a.            |   | 366,312 |  |   | 352,272   | 
|Due by July 7, 2011.
      Interest at 5.841% p.a.            |   | 76,315  |  |   | -         | 
|                                                              |   |         |  |   |           | 
|Loans payable to Tianjin Bank :                               |   |         |  |   |           | 
|Due by January 28, 2011. Interest at
      5.841% p.a.        |   |         |  |   | 1,247,630 | 

|Due by August 1, 2011. Interest at
      4.425% p.a.   |   | 2,747,340 |  |   |           | 
|------------------------------------------------------ | - | --------- |  | - | --------- | 
|Due by November 8, 2011. Interest at
      5.841% p.a. |   | 1,526,300 |  |   |           | 
|Loan payable to Midi Investment Inc                    |   | -         |  |   | 190,000   | 
|Total Short-term Loans                                 | $ | 4,716,267 |  | $ | 3,536,584 | 

- 14 -

---

Long-term loans include a bank loan of $289,997 that bears
interest on daily balance at 5.841% from Tianjin Agriculture Credit Union Bank
and is due on April 13, 2012.

The bank loans are secured by buildings owned by the Company.
See Notes 5.

Note 10- OTHER PAYABLES

Other payables consist of the following as of March 31, 2011
(unaudited) and June 30, 2010:

|                                    |   | 2011      |  |   | 2010      | 
|----------------------------------- | - | --------- |  | - | --------- | 
|Non-related party payable           | $ | 111,263   |  | $ | 544,786   | 
|Acquired Paclitaxel ongoing project |   | 457,890   |  |   | 440,340   | 
|Employees payable(a)                |   | 229,966   |  |   | 147,333   | 
|Funds and Insurance payable(b)      |   | 144,428   |  |   | 754,723   | 
|Welfare payable                     |   | 69,629    |  |   | 98,674    | 
|Total                               | $ | 1,013,176 |  | $ | 1,985,857 | 

(a) Employees payable represents advances from employees for
various payments made on behalf of the Company. This payable is due on demand
and bears no interest.

(b) Funds and insurance payable includes $682,109 financing
fees as of June 30, 2010 and was paid in July 2010.

Note 11 - TAXES PAYABLE

Taxes payable consist of the following as of March 31, 2011
(unaudited) and June 30, 2010:

|                   |   | 2011      |  |   | 2010      | 
|------------------ | - | --------- |  | - | --------- | 
|VAT payable        | $ | 1,198,545 |  | $ | 977,278   | 
|Income tax payable |   | 2,318,014 |  |   | 2,057,856 | 
|Other levies       |   | 376,489   |  |   | 222,350   | 
|Total              | $ | 3,893,048 |  | $ | 3,257,483 | 

Note 12 - INCOME TAXES

The Company utilizes ASC 740, "Income Taxes," which requires
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that were 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.

Local PRC income tax

The Company is governed by the Income Tax Law of the PRC
concerning Chinese registered limited liability companies. Under the Income Tax
Laws of the PRC, Chinese enterprises are generally subject to an income tax at
an effective rate of 33% (30% state income taxes plus 3% local income taxes) on
income reported in the statutory financial statements after appropriate tax
adjustments, unless the enterprise is located in a specially designated region
for which more favorable effective tax rates are applicable.

Beginning January 1, 2008, in the PRC the new Enterprise Income
Tax (EIT) law replaced the existing laws for Domestic Enterprises (DES) and
Foreign Invested Enterprises (FIEs). The new standard EIT rate of 25% replaced
the 33% rate applicable to both DES and FIEs. The two years tax exemption and
three years 50% tax reduction tax holiday for production-oriented FIEs were eliminated.

- 15 -

---

The provision for income taxes for the three and nine months
ended March 31, 2011 (unaudited) and 2010 (unaudited) consisted of the
following:

|                                 |   | Three Months Ended March 31, |  |   | Nine Months Ended March 31, | 
|-------------------------------- | - | ---------------------------- |  | - | --------------------------- | 
|                                 |   | 2011                         |  |   | 2010                        | 
|Income tax expense - current     | $ | 2,228,029                    |  | $ | 2,072,502                   | 
|Income tax expense - deferred    |   | 40,004                       |  |   | 36,564                      | 
|Total provision for income taxes | $ | 2,268,033                    |  | $ | 2,109,066                   | 

The following table reconciles the U.S. statutory rates to the
Companys effective tax rate for the three and nine months ended March 31, 2011
(unaudited) and 2010 (unaudited):

|                            |  | Three Months Ended March 31, |   |  | Nine Months Ended March 31, |  
|--------------------------- |  | ---------------------------- | - |  | --------------------------- | -
|                            |  | 2011                         |   |  | 2010                        |  
|Tax at statutory rate       |  | 35%                          |   |  | 35%                         |  
|Foreign tax rate difference |  | (10%                         | ) |  | (10%                        | )
|Other items (a)             |  | 1.0%                         |   |  | 0.5%                        |  
|Total                       |  | 26.0%                        |   |  | 25.5%                       |  

|(a) | Primarily expenses incurred by the Companys overseas
      holding companies not subject to PRCincome tax
|--- | ----------------------------------------------------------------------------------------------------------

Note 13 - RELATED PARTY TRANSACTIONS

Acquisition

On November 25, 2010, pursuant to the purchase agreement dated
on May 8, 2010, the Company, through two of its subsidiaries, acquired 100%
interest of the registered capital of TQSHL and changed the name to Tianjin BOAI
BIO-PHARMACEUTICAL CO., LTD. The Company paid RMB 40,000,000 to purchase 100%
of TQSHL from the original shareholders. In addition, the subsidiaries paid
another RMB 40,000,000 for the assumed debt.  On August 19, 2010, Guoping Li, the
original shareholder of TQSHL, transferred his equity shares in TQSHL to
Jincheng Xia which is a family member of the Company's Chief Executive Officer,
Xuecheng Xia. On October 30, 2010, Jincheng Xia transferred his equity shares in
TQSHL to Tianjin BOAI Leechdom Technique Co., Ltd, the subsidiary of Tianjin BOAI
Pharmaceutical Co., Ltd.

Due from related parties

As of March 31, 2011 (unaudited), the Company advanced $352,185
to drug chain stores. The major shareholder of the Company has a significant
influence on the operations of these chain stores. These loans were unsecured
and due on demand.

Due to related parties

As of March 31, 2011 (unaudited), the Company received a loan
of $299,975 from its major shareholder and Chief Executive Officer, Xuecheng
Xia. The loan was unsecured and due on demand.

Note 14 - STATUTORY RESERVES

As stipulated by Law of the PRC, net income after taxation can
only be distributed as dividends after appropriation has been made for the
following:

|i)   | Making up cumulative prior years' losses, if
  any;                                                                                                                                                                                   
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ii)  | Allocations to the "Statutory surplus reserve" of at
      least 10% of income after tax, as determined under PRC accounting rules
      and regulations, until the fund amounts to 50% of the Company's registered
      capital; and
|iii) | Allocations to the discretionary surplus reserve, if
      approved in the shareholders' general meeting.                                                                                                                             

In accordance with the Chinese Company Law, the Companys
subsidiaries allocated 10% of their net income to surplus.

- 16 -

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Note 15 - EARNINGS PER SHARE

Earnings per share is determined by dividing net income for the
periods by the weighted average number of both basic and diluted shares of
common stock and common stock equivalents outstanding pursuant to ASC 260,
Earnings Per Share. The following demonstrates the calculation for earnings
per share for the three and nine months ended March 31, 2011 (unaudited) and
2010 (unaudited):

|                                                                   |   | Three Months |  |   | Nine Months | 
|------------------------------------------------------------------ | - | ------------ |  | - | ----------- | 
|                                                                   |   | 2011         |  |   | 2010        | 
|Basic earnings per share                                           |   |              |  |   |             | 
|Net Income                                                         | $ | 6,464,655    |  | $ | 6,155,476   | 
|Weighted average number of common shares
      outstanding-Basic   |   | 39,840,605   |  |   | 32,310,758  | 
|Earnings per share-Basic                                           | $ | 0.16         |  | $ | 0.19        | 
|                                                                   |   |              |  |   |             | 
|Diluted earnings per share                                         |   |              |  |   |             | 
|Net Income                                                         | $ | 6,464,655    |  | $ | 6,155,476   | 
|Weighted average number of common shares outstanding-Basic         |   | 39,840,605   |  |   | 32,310,758  | 
|Effect of exercise of options and warrants                         |   | 0            |  |   | 0           | 
|Weighted average number of common shares
      outstanding-Diluted |   | 39,840,605   |  |   | 32,310,758  | 
|                                                                   |   |              |  |   |             | 
|Earnings per share-Diluted                                         | $ | 0.16         |  | $ | 0.19        | 

Note 16 - EQUITY PLACEMENTS

From March to June 2010, the Company sold 4,287,381 shares of
common stock and 835,477 common stock warrants for $10,705,311. Each Warrant
permits the holder to purchase one share of common stock from the Company for
$2.51. The Warrants expire five years after issuance. The Company paid the
Placement Agent $935,000 and 675,317 shares of common stock, at $2.51 a share, a
total of $2,630,046.

In connection with this financing, the Company and its
controlling shareholders entered into Side Letter Agreements with the investors
which required the Company's controlling shareholders to surrender Company
shares to the Investors if the Company failed to reach certain income thresholds
for the years ending June 30, 2009, 2010 and 2011. The 2009 and 2010 thresholds
were met. Another condition was that the Company become a reporting company
within the meaning of Rule 144 under the Securities Act of 1933, as amended,
within 180 days following the closing of such financing, and file a registration
statement with respect to its Common Stock on Form 10 with the SEC before
December 31, 2010. The Company did not meet this obligation on the required date
but obtained the extension from the investors and filed Form 10 on February 14,
2011.

Pursuant to a bridge loan settlement agreement dated May 25,
2010 with China Boai Hunter, LLC, the Company issued 239,044 shares of common
stock and 298,805 common stock purchase 3-year warrants. Each Warrant permits
the holder to purchase one share of common stock from the Company for $2.51. The
fair value of shares and warrants issued for this settlement of $600,000 and
$226,947 was accounted for as additional interest expense on the settlement
date. The fair value of the warrant was calculated using the Black-Scholes
options pricing model using the following assumptions: Volatility: 43.9%; Risk
free interest rate: 1%, Expected term: 2.92 years.

The fair value of outstanding warrants issued in conjunction
with the June 2010 equity financing was $835,477 as of March 31, 2011
(unaudited). The fair value of the warrants at March 31, 2011 was calculated
using the Black-Scholes options pricing model using the following assumptions:
Volatility: 49.6%; Risk free interest rate: 1.76%, Expected term: 4.17 -4.25
years. The fair value of the warrants has been accounted for as cost of raising
equity.

- 17 -

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Note 17 - CURRENT VULNERABILITY DUE TO CERTAIN
CONCENTRATIONS

The Company's operations are all 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 operations in the PRC are subject to specific
considerations and significant risks not typically associated with companies in
the North America and Western Europe. These include risks associated with, among
others, the political, economic and legal environments and foreign currency
exchange. The Company's results may be adversely affected 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 18 - MAJOR CUSTOMERS AND VENDORS

Major customers and vendors represent those which accounted for
10% or more of the Companys net revenue or purchase, respectively.

One customer accounted for 16.1% and 11.5% of net revenue for
the three months ended March 31, 2011 and 2010, respectively. The Companys
accounts receivable from this customer was $554,830 and $468,896 as of March 31,
2011 and 2011 respectively, representing 3.27% and 4.64% of total accounts
receivable. No customer accounted for 10% or more of net revenue for the nine
months ended March 31, 2011 (unaudited) or 2010 (unaudited).

One vendor provided 17.4% and 27.8% of the Companys purchases
of raw materials and goods for the three and nine months ended March 31, 2011,
respectively. The Companys accounts payable to this vendor was $1,181 as of
March 31, 2011. Two vendors provided 36.7% of the Companys purchases of raw
materials and goods for the three months ended March 31, 2010, with the vendors
individually accounting for 24.5% and 12.2%, respectively. At March 31, 2010,
the total payable balance to these vendors was $288,529, representing 9.3% of
total accounts payable. One vendor provided 10.3% of the Companys purchases of
raw materials for the nine months ended March 31, 2010. The Companys accounts
payable to the vendor was $51,054 as of March 31, 2010, representing 1.6% of
total accounts payable.

Note 19- COMMITMENTS AND CONTINGENCIES

The Companys sales, purchases and expenses transactions are
denominated in RMB and all of the Companys assets and liabilities are also
denominated in RMB. The RMB is not freely convertible into foreign currencies
under the current law. In China, foreign exchange transactions are required by
law to be transacted only by authorized financial institutions at exchange rates
set by the Peoples Bank of China, the central bank of China. Remittances in
currencies other than RMB may require certain supporting documentation in order
to affect the remittance.

As of March 30, 2011 (unaudited), the Company has no
significant litigation claims. Also, the Company does not have significant
operating-lease commitments as of March 31, 2011 (unaudited).

Note 20  SUBSEQUENT EVENTS

There were no significant subsequent events occurring after
March 31, 2011.

- 18 -

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. We use words such as believe, expect, anticipate, project,
target, plan, optimistic, intend, aim, will or similar expressions
which are intended to identify forward-looking statements. Such statements
include, among others, those concerning market and industry segment growth and
demand and acceptance of new and existing products; any projections of sales,
earnings, revenue, margins or other financial items; any statements of the
plans, strategies and objectives of management for future operations; any
statements regarding future economic conditions or performance; as well as all
assumptions, expectations, predictions, intentions or beliefs about future
events. You are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, including
those identified under the Risk Factors heading in our Registration Statement
on Form 10, filed on February 14, 2011, as well as assumptions, which, if they
were to ever materialize or prove incorrect, could cause the results of the
Company to differ materially from those expressed or implied by such
forward-looking statements.

Readers are urged to carefully review and consider the various
disclosures made by us in this report and our other filings with the SEC. These
reports attempt to advise interested parties of the risks and factors that may
affect our business, financial condition and results of operations and
prospects. The forward-looking statements made in this report speak only as of
the date hereof and we disclaim any obligation, except as required by law, to
provide updates, revisions or amendments to any forward-looking statements to
reflect changes in our expectations or future events.

Use of Terms

Except as otherwise indicated by the context, references in
this report to:

- "ALH" are to Asia Leechdom Holding Corporation, a New Jersey corporation;
- "Company," "we," "us," or "our," are references to the combined business
  of Asia Leechdom Holding Corporation, a Nevada corporation, together with its
  wholly-owned subsidiary, ALH, and ALHs wholly-owned subsidiary, BOAI Pharm,
  and BOAI Pharms wholly-owned subsidiary, BOAI Leechdom, and majority-owned
  subsidiary, BOAI Bio-Pharm;
- China, the state and PRC are references to the Peoples Republic of
  China;
- the Exchange Act are to the Securities Exchange Act of 1934, as amended;
- BOAI Bio-Pharm are references to Tianjin BOAI Bio-Pharmaceutical Co.,
  Ltd., a PRC limited company;
- BOAI Pharm are references to Tianjin BOAI Pharmaceutical Co., Ltd., a
  PRC limited company;
- BOAI Leechdom are references to Tianjin BOAI Leechdom Technique Co.,
  Ltd., a PRC limited company;
- RMB are to Renminbi, the legal currency of China; and U.S. dollar,
  USD or $, are to the legal currency of the United States of America; and
- the Securities Act are to Securities Act of 1933, as amended.
- U.S. dollars, dollars and $ are to the legal currency of the United
  States.

Overview of our Business

We are a producer and distributor of pharmaceutical products
including a variety of medical supplies, prescription and over-the-counter, or
OTC, drugs in China and abroad. Through our wholly-owned PRC subsidiary, BOAI
Pharm and BOAI Pharms wholly-owned subsidiary, BOAI Leechdom, we currently
produce and sell 42 medicines and distribute over 7,000 medicines and medical
devices for third-party producers and manufacturers. We market our products
through a sales network covering 23 provinces and municipalities in China,
including Beijing, Shanghai, Shandong, and Guangdong. We also sell our products
through import-export traders to customers in North America, Europe and East
Asia.

- 19 -

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We produce our products at our 3,428 square meter production
facility located in Tianjin, China. We currently operate 9 production lines,
each serving the following product formats: (1) ointment, (2) pill, (3) tablet,
(4) syrup, (5) granule, (6) capsule, (7) orally taken liquid, (8) plaster and
(9) extract; and further separated into liquid preparations (such as ointment
and syrup) and solid preparations (such as tablets, pills and granules). We
recently obtained land use rights for another 85,938.92 square meters of
property for construction of an additional production facility in Tianjin. We
expect to complete the initial phase of construction for this new facility by
August 2011.

We generate revenues from the sale and distribution of our
products and other third party products in China and abroad. For the fiscal
years ended June 30, 2010, 2009 and 2008, total revenue was $68,166,997,
$49,489,066 and $32,381,120, respectively, and our net income for the same years
was $21,750,626, $15,460,736 and $11,125,217, respectively.

First Quarter Financial Performance Highlights

We continued to experience strong demand for our products and
services during the three months ended March 31, 2011, which resulted in growth
in our revenue and net income. The following are some financial highlights for
the first quarter:

- Revenue: Revenue increased $4.7 million, or 25.0%, to $23.5
  million for the three months ended March 31, 2011, from $18.8 million for the
  2010 period.
- Gross Profit: Gross profit increased $0.6 million, or 6.6%,
  to $9.9 million for the three months ended March 31, 2011, from $9.3 million
  for the 2010 period.
- Income from operations: Income from operations increased
  $0.3 million, or 3.3%, to $8.6 million for the three months ended March 31,
  2011, from $8.3 million for the 2010 period.
- Fully diluted net income per share: Fully diluted net income
  per share was $0.16 for the three months ended March 31, 2011, as compared to
  $0.19 for the 2010 period.

Results of Operations

The following tables set forth key components of our results of
operations for the periods indicated, both in dollars and as a percentage of
sales revenue and key components of our revenue for the periods indicated in
dollars.

Three Months Ended March 31, 2011 Compared to Three
Months Ended March 31, 2010

The following table sets forth key components of our results of
operations for the three months ended March 31, 2011 and 2010, both in dollars
and as a percentage of our net revenues.

|                   |   | 2011       |  |  | 2010          | 
|------------------ | - | ---------- |  |  | ------------- | 
|                   |   |            |  |  | As a          | 
|                   |   |            |  |  | percentage of | 
|                   |   | In Dollars |  |  | net revenues  | 
|Revenues           | $ | 23,517,492 |  |  |               | 
|Cost of Goods Sold |   | 13,609,715 |  |  | 57.9%         | 
|Gross Profit       |   | 9,907,777  |  |  | 42.1%         | 
|Operating Expenses |   | 1,354,589  |  |  | 5.8%          | 
|Operating Income   |   | 8,553,188  |  |  | 36.4%         | 
|Income Taxes       |   | 2,268,033  |  |  | 9.6%          | 
|Net Income         | $ | 6,464,655  |  |  | 27.5%         | 

Revenues.We had revenues of $23,517,492 for the three
months ended March 31, 2011, an increase of $4,695,978, or 25.0%, compared to
$18,821,514 for the three months ended March 31, 2010. The increase was due to
the sales of our pharmaceutical products and our wholesale distribution
businesses. Sales of our pharmaceutical products, including inter-company sales,
for the three months ended March 31, 2011 increased by $969,929, or 13.4%,
compared to the 2010 period.

- 20 -

---

We also recorded $15,298,685 in revenue for the three months
ended March 31, 2011, from our wholesale distribution business, an increase of
$3,696,444, or 31.9%, compared to the 2010 period. The sales growth in the 2011
period was primarily due to our continuous marketing efforts in expanding new
geographic reach and overall increased market demand for some current products,
such as the FuFangYiMuCao Gel, YiQiRunChang Gel and the PuDiLanXiaoYan
Tablet.

Cost of Goods Sold and Gross Profit.Our cost of goods
sold consists of raw materials, labor costs and production overhead. In the
three months ended March 31, 2011, our cost of goods sold increased by 42.9%,
from $9,524,027 to $13,609,715, compared to the 2010 period. The increase of
cost of sales in the 2011 period is attributable to our increase in sales.
However, the disparity in growth between revenue and cost of goods sold is
mainly attributable to the stronger sales of our lower margin wholesale products
and higher manufacturing cost, such as increased labor and materials cost, of
our pharmaceutical products during the 2011 period. During the three months
ended March 31, 2011, the gross margin of our wholesale distribution business
was 36.7%, compared to 42.8% in the 2010 period. The gross margin of our
pharmaceutical production business was 52.0% in the three months ended March 31,
011, compared to the 59.6% margin in the 2010 period. The overall result was a
decrease in our gross margin from 49.4% in the three months ended March 31, 2010
to 42.1% in the 2011 period.

Operating expenses.Our operating expenses increased by
33.0%, from $1,018,551 in the three months ended March 31, 2010, to $1,354,589
in the 2011 period. The increase is primarily due to higher selling and
administrative expenses for the three months ended March 31, 2011. Selling
expenses increased 99.8%, from $176,910 for the three months ended March 31,
2010, to $353,478 in the 2011 period. General and administrative expenses
increased 73.8%, from $388,484 for the three months ended March 31, 2010, to
$675,128 in the 2011 period. The increase in selling and administrative expenses
in 2011 compared to 2010 was primarily due to increased sales workforce, higher
payroll expenses, professional fees in connection with our becoming a public
company (such as accounting, legal and financial consulting fees) and
depreciation expense. Our total other income (expense) for the three months
ended March 31, 2011 did not change significantly compared to the 2010 period,
except for the increase of other income of $170,171 mainly attributable to
consulting and rental income

Income Taxes.Income taxes for the three months ended
March 31, 2011 was $2,268,033, compared to $2,109,066 for the 2010 period. The
Companys effective tax rate was 26.0% for the three months ended March 31,
2011, compared to 25.5% for the 2010 period.

Net Income.Our net income was $6,464,655 for the three
months ended March 31, 2011, compared to $6,155,476 for the three months ended
March 31, 2010. The 5.0% increase in net income during the 2011 period was
mainly due to sales growth.

Nine months Ended March 31, 2011 Compared to Nine months
Ended March 31, 2010

The following table sets forth key components of our results of
operations for the nine months ended March 31, 2011 and 2010, both in dollars
and as a percentage of our net revenues.

|                   |   | 2011       |  |  | 2010          | 
|------------------ | - | ---------- |  |  | ------------- | 
|                   |   |            |  |  | As a          | 
|                   |   |            |  |  | percentage of | 
|                   |   | In Dollars |  |  | net revenues  | 
|Revenues           | $ | 65,162,340 |  |  |               | 
|Cost of Goods Sold |   | 35,611,726 |  |  | 54.7%         | 
|Gross Profit       |   | 29,550,614 |  |  | 45.3%         | 
|Operating Expenses |   | 4,183,402  |  |  | 6.4%          | 
|Operating Income   |   | 25,367,212 |  |  | 38.9%         | 
|Income Taxes       |   | 6,519,499  |  |  | 10.0%         | 
|Net Income         | $ | 18,786,030 |  |  | 28.8%         | 

Revenues.We had revenues of $65,162,340 for the nine
months ended March 31, 2011, an increase of $16,913,326, or 35.1%, compared to
$48,249,014 for the nine months ended March 31, 2010. The increase was due to
the sales of our pharmaceutical products and our wholesale distribution
businesses. Sales of our pharmaceutical products, including inter-company sales,
for the nine months ended March 31, 2011 increased by $6,399,118, or 32.2%,
compared to the 2010 period. We also recorded $39,244,671 in revenue for the
nine months ended March 31, 2011, from our wholesale distribution business, an
increase of $10,651,212, or 37.3%, compared to the 2010 period. The sales growth
in the 2011 period was primarily due to our continuous marketing efforts in
expanding new geographic reach and overall increased market demand for some
current products, such as the FuFangYiMuCao Gel, YiQiRunChang Gel and the
PuDiLanXiaoYan Tablet.

- 21 -

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Cost of Goods Sold and Gross Profit.Our cost of goods
sold consists of raw materials, labor costs and production overhead. In the nine
months ended March 31, 2011, our cost of goods sold increased by $11,538,992,
from $24,072,734 to $35,611,726, compared to the 2010 period. The increase of
cost of sales in the 2011 period is attributed to our increase in sales.
However, the disparity in growth between revenue and cost of goods sold is
mainly attributable to the stronger sales of our lower margin wholesale products
and higher manufacturing cost, such as increased labor and materials cost, of
our pharmaceutical products during the 2011 period. During the nine months ended
March 31, 2011, the gross margin of our wholesale distribution business was
36.6%, compared to 42.4% in the 2010 period. The gross margin of our
pharmaceutical production business was 57.8% in the nine months ended March 31,
011, compared to 60.7% in the 2010 period. The overall result was a decrease in
our gross margin from 50.1% in the nine months ended March 31, 2010 to 45.3% in
the 2011 period.

Operating expenses.Our operating expenses increased by
72.0%, from $2,432,364 in the nine months ended March 31, 2010, to $4,183,402 in
the 2011 period. The increase is primarily due to higher selling and
administrative expenses for the nine months ended March 31, 2011. Selling
expenses increased 74.6%, from $481,180 for the nine months ended March 31,
2010, to $839,973 in the 2011 period. General and administrative expenses
increased 220.0%, from $825,282 for the nine months ended March 31, 2010, to
$2,640,917 in the 2011 period. The increase in selling and administrative
expenses in 2011 compared to 2010 was primarily due to increased sales promotion
activities, higher payroll expenses, professional fees in connection with our
becoming a public company (such as accounting, legal and financial consulting
fees) and depreciation expenses Our total other income (expense) for the nine
months ended March 31, 2011 did not change significantly compared to the 2010
period, but we recognized $591,108 other income due to materials sold, which is
offset by $579,243 other expense due to inventory impairment loss mainly caused
by a natural disaster, in the 2011 period.

Income Taxes.Income taxes for the nine months ended
March 31, 2011 was $6,519,499, compared to $5,546,235 for the 2010 period. The
Companys effective tax rate was 25.8% for the nine months ended March 31, 2011,
compared to 25.6% for the 2010 period.

Net Income.Our net income was $18,786,030 for the nine
months ended March 31, 2011, compared to $16,122,269 for the nine months ended
March 31, 2010. The 16.5% increase in net income was during the 2011 period was
mainly due to sales growth.

Liquidity and Capital Resources

As of March 31, 2011, we had cash and equivalents of $14.7
million. The following table summarizes the key cash flow metrics from our
consolidated statements of cash flows for the nine months ended March 31, 2011
and 2010.

|                                                            |   | 2011       |  |   | 2010       | 
|----------------------------------------------------------- | - | ---------- |  | - | ---------- | 
|Net cash provided by (used in) operating
      activities   | $ | 10586,214  |  | $ | 13,706,255 | 
|Net cash used in investing activities                       |   | 14,630,500 |  |   | 3,060,691  | 
|Net cash (used in) provided by financing
      activities   |   | 3,633,307  |  |   | 351,466    | 
|Effect of exchange rate changes in cash and cash equivalent |   | 562,578    |  |   | 197,263    | 
|Net increase (decrease) in cash and cash
      equivalents  |   | 151,599    |  |   | 11,194,293 | 
|Cash and cash equivalents at beginning of the period        |   | 14,498,707 |  |   | 5,495,176  | 
|Cash and cash equivalent at end of the
      period         | $ | 14,650,306 |  | $ | 16,689,469 | 

Operating Activities

Net cash provided by operating activities was $10.6 million for
the nine months ended March 31, 2011, a 22.8% decrease from $13.7 million in net
cash generated from operating activities for the 2010 period. Such a decrease
was primarily attributed to changes in operating assets and liabilities which
aggregated to a net cash outflow of $9,069,736 for the nine months ended March 31, 2011, an increase by $5,995,322 from a
net cash outflow of $3,074,414 during 2010 period. As reflected in our cash
flows, the changes included:

- 22 -

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- cash outflows from accounts receivable, other receivable, and advances to
  material suppliers were $6,890,515 primarily affected by the increase of our
  sales revenue;
- cash inflows from inventory were $1,686,873 mainly due to vendors
  improved responsiveness to deliver materials ordered by us; and
- cash inflows from accounts payable and other payables were $2,913,867
  primarily attributed to the timing of payments to vendors; and cash outflows
  from due to related party were $4,689,992 primarily attributed to our
  repayment of loans to related parties; and cash outflows from unearned revenue
  were $2,940,569 mainly due to our more aggressive promotion activities.

Investing Activities

Net cash used in investing activities was $14.6 million for the
nine months ended March 31, 2011, compared to $3.1 million net cash used in
investing activities for the 2010 period. Such increase was primarily due to
cash outflows from higher advances to equipment suppliers of $3,501,993 to
increase production capacity and from higher investment in properties and land
use rights of $8,387,077 to secure new space for future expansion.

Financing Activities

Net cash provided by financing activities increased to $3.6
million during the nine months ended March 31, 2011, compared to $0.4 million
during the 2010 period. The increase was mainly attributable to our increased
net borrowing from local banks of $1,498,192 and collections on subscriptions
receivable of $3,007,224 from our June 2010 private placement.

Capital Expenditures

Our capital expenditures were $14,630,500 and $3,060,691 for
the nine months ended March 31, 2011 and 2010, respectively. Our capital
expenditures in the 2011 period were mainly used to acquire land usage rights
and properties in Tianjin, and advance to equipment suppliers in connection with
our planned expansion of production capacity. As of March 31, 2011 and 2010, we
had cash and equivalents of $14,650,306 and $16,689,469, respectively, primarily
consisting of cash on hand and demand deposits. As of March 31, 2011, we expect
to make additional capital expenditures of approximately RMB 51 million
(unaudited) (approximately $7.8 million) for the construction of buildings and
purchase of equipment relating to construction of our new production facilities
in Tianjin. To date, we have financed our operations primarily through cash
flows from operations, augmented by short-term bank borrowings and equity
contributions by our stockholders.

We believe that our cash on hand and cash flow from operations
will meet part of our present cash needs and we will require additional cash
resources, including loans, to meet our expected capital expenditure and working
capital for the next 12 months. We may, however, in the future, require
additional cash resources due to changed business conditions, implementation of
our strategy to ramp up our marketing efforts and increase brand awareness, or
acquisitions we may decide to pursue. If our own financial resources are
insufficient to satisfy our capital requirements, we may seek to sell additional
equity or debt securities or obtain additional credit facilities. The sale of
additional equity securities could result in dilution to our stockholders. The
incurrence of indebtedness would result in increased debt service obligations
and could require us to agree to operating and financial covenants that would
restrict our operations. Financing may not be available in amounts or on terms
acceptable to us, if at all. Any failure by us to raise additional funds on
terms favorable to us, or at all, could limit our ability to expand our business
operations and could harm our overall business prospects.

Loan Commitments

The growth of our Company has been funded by capital
contributions, initially from our founders and in May and June 2010
approximately $10.7 million capital raised by the sale of our securities to
investors. As of March 31, 2011 and June 30, 2010 we had $5,006,264 and
$3,536,584, respectively, in short and long term loans. All our current loans
are secured by our properties.

- 23 -

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The following table summarizes our short and long term loans
outstanding as of March 31, 2011.

|Bank                                                                                                  |   | Amount    |  |  | Maturity         |  |  | Interest |  |  | Duration | 
|----------------------------------------------------------------------------------------------------- | - | --------- |  |  | ---------------- |  |  | -------- |  |  | -------- | 
|                                                                                                      |   |           |  |  | Date             |  |  | Rate     |  |  |          | 
|Tianjin Agriculture Credit Union Bank                                                                 | $ | 366,312   |  |  | May 10, 2011 *   |  |  | 5.841%   |  |  | 1 year   | 
|Tianjin Agriculture Credit Union Bank                                                                 | $ | 76,315    |  |  | July 7, 2011     |  |  | 5.841%   |  |  | 1 year   | 
|Tianjin Agriculture Credit Union Bank                                                                 | $ | 289,997   |  |  | April 13, 2012   |  |  | 5.841%   |  |  | 1 year   | 
|Tianjin Bank                                                                                          | $ | 2,747,340 |  |  | August 1, 2011   |  |  | 4.425%   |  |  | 1 year   | 
|Tianjin Bank                                                                                          | $ | 1,526,300 |  |  | November 8, 2011 |  |  | 5.841%   |  |  | 1 year   | 
|Total                                                                                                 | $ | 5,006,264 |  |  | --               |  |  | --       |  |  | --       | 
|* The company is in the process
      of renewing the loan and expects to complete in the 4thquarter. |   |           |  | 

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Obligations under Material Contracts

Except with respect to the loan obligations disclosed under the
Loan Commitments heading and the obligations discussed below, we have
no obligations to pay cash or deliver cash to any other party.

On September 30, 2008, we entered into a technology transfer
agreement with Tsinghua University, pursuant to which we obtained the Paclitaxel
cell cultivation method for RMB 43 million (approximately $6.6 million) .We received the technology in December 2008 in connection with our initial
payment of approximately $3.0 million, and made a second payment of
approximately $3.0 million in March, 2009, when we successfully completed trial
production. As of March 31, 2011, we had paid approximately $6.0 million were
obligated to make a third and final payment of approximately $0.6 million once
we are able to successfully produce on a large scale.

Critical Accounting Policies

There have been no changes in our critical accounting policies
from those under Management's Discussion and Analysis of Results of Operations
and Financial Condition in our Registration Statement on Form 10 filed on
February 14, 2011.

Seasonality

Our operating results and operating cash flows historically
have not been subject to seasonal variations. This pattern may change, however,
as a result of new market opportunities or new product introductions.

Inflation

Inflation and changing prices have not had a material effect on
our business and we do not expect that inflation or changing prices will
materially affect our business in the foreseeable future. However, our
management will closely monitor the price change in travel industry and
continually maintain effective cost control in operations.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity or capital expenditures or capital resources that is
material to an investor in our securities.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.

Interest Rate Risk

We deposit surplus funds with Chinese banks earning daily
interest. We do not invest in any instruments for trading purposes. Most of our
outstanding debt instruments carry fixed rates of interest. Our operations
generally are not directly sensitive to fluctuations in interest rates. The
amount of long-term debt outstanding as of March 31, 2011 and December 31, 2010
was $0.3 million and $0 million, respectively. A hypothetical 1.0% increase in
the annual interest rates for all of our credit facilities under which we had
outstanding borrowings at March 31, 2011, would decrease net income before
provision for income taxes by approximately $12,500, or less than 1% for the
three months ended March 31, 2011. Management monitors the banks prime rates in
conjunction with our cash requirements to determine the appropriate level of
debt balances relative to other sources of funds. We have not entered into any
hedging transactions in an effort to reduce our exposure to interest rate
risk.

Foreign Exchange Risk

While our reporting currency is the U.S. dollars, substantially
all of our consolidated revenues and consolidated costs and expenses are
denominated in RMB. Substantially all of our assets are denominated in RMB
except for cash. As a result, we are exposed to foreign exchange risk as our
revenues and results of operations may be affected by fluctuations in the
exchange rate between U.S. dollars and RMB. If the RMB depreciates against the
U.S. dollars, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollars
financial statements will decline. Assets and liabilities are translated at
exchange rates at the balance sheet dates and revenue and expenses are
translated at the average exchange rates and equity is translated at historical
exchange rates. Any resulting translation adjustments are not included in
determining net income but are included in determining other comprehensive
income, a component of equity. An average appreciation (depreciation) of the RMB
against the U.S. dollars of 5% would increase (decrease) our comprehensive
income by approximately $3.3 million based on our outstanding revenues, costs
and expenses, assets and liabilities denominated in RMB as of March 31, 2011. As
of March 31, 2011, our accumulated other comprehensive income was $4.4 million.
We have not entered into any hedging transactions in an effort to reduce our
exposure to foreign exchange risk.

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The value of RMB against the U.S. dollars and other currencies
is affected by, among other things, changes in Chinas political and economic
conditions. Since July 2005, RMB has not been pegged to the U.S. dollars.
Although the Peoples Bank of China regularly intervenes in the foreign exchange
market to prevent significant short-term fluctuations in the exchange rate, RMB
may appreciate or depreciate significantly in value against the U.S. dollars in
the medium to long term. Moreover, it is possible that in the future, PRC
authorities may lift restrictions on fluctuations in RMB exchange rate and
lessen intervention in the foreign exchange market.

Inflation

Inflationary factors such as increases in the cost of our
product and overhead costs may adversely affect our operating results. Although
we do not believe that inflation has had a material impact on our financial
position or results of operations to date, a high rate of inflation in the
future may have an adverse effect on our ability to maintain current levels of
gross margin and selling, general and administrative expenses as a percentage of
net revenues if the selling prices of our products do not increase with these
increased costs.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer
to controls and other procedures designed to ensure that information required to
be disclosed in the reports we file or submit under the Securities Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of 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.

As required by Rule 13a-15(e), our management has carried out
an evaluation, with the participation and under the supervision of our Chief
Executive Officer, Ms. Xuecheng Xia, and our Chief Financial Officer, Mr.
Shuyuan Chang, of the effectiveness of the design and operation of our
disclosure controls and procedures, as of March 31, 2011. Based upon, and as of
the date of this evaluation, Ms. Xia and Mr. Chang, determined that, as of March
31, 2011, and as of the date of this report, our disclosure controls and
procedures were effective.

Changes in Internal Controls over Financial
Reporting

There were no changes in our internal controls over financial
reporting during the first quarter of fiscal 2011 that have materially affected,
or are reasonably likely to materially affect our internal control over
financial reporting.

PART IIOTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits
and legal proceedings, which arise, in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in these,
or other matters, may arise from time to time that may harm our business. We are
currently not aware of any such legal proceedings or claims that we believe will
have a material adverse affect on our business, financial condition or operating
results.

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ITEM 1A. RISK FACTORS.

There are no material changes from the risk factors previously
disclosed under Risk Factors in our Registration Statement on Form 10, filed
on February 14, 2011.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. (REMOVED AND RESERVED).

ITEM 5. OTHER INFORMATION.

We have no information to disclose that was required to be in a
report on Form 8-K during the period covered by this report, but was not
reported. There have been no material changes to the procedures by which
security holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS.

The following exhibits are filed as part of this report or
incorporated by reference:

|Exhibit No. |  | Description                                                                                                                                                                  
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1        |  | Certifications of Principal Executive
      Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                         
|31.2        |  | Certifications of Principal Financial Officer
      filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                         
|32.1        |  | Certifications of Principal
      Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2        |  | Certifications of Principal Financial Officer
      furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

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

|Date: May 16, 2011 | ASIA LEECHDOM HOLDING
      CORPORATION
|------------------ | ---------------------------------------
|                   |                                        
|                   | By:                                    
|                   |                                        
|                   |                                        
|                   |                                        
|                   | By:                                    
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|                   |                                        

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