---

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, 2009

Or

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

For the transition period from _________________________ to
_________________________

Commission File Number 333-127016

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

|Wyoming                                                                 | 98-0463119                       
|----------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization)    | (IRS Employer Identification No.)
|                                                                        |                                  
|T Plaza Center, Suite 400, 15950 North Dallas
      Parkway, Dallas, TX | 75249                            
|(Address of principal executive offices)                                | (Zip Code)                       

972.361.8033(Registrants telephone number,
including area code)

N/A(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. [X]
YES    [   ] NO

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
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   [   ]
    (Do not check if a smaller
      reporting company)
    Smaller reporting company 
  [X]


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

[    ] YES   [X] NO

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

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court.  [ 
 ] YES    [   ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

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

50,148,000 common shares issued and outstanding as May 19,
2009

F1

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PART I  FINANCIAL INFORMATION

ITEM 1. Financial Statements





F2

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China Health Care Corp

Unaudited Financial Statements

March 31, 2009 and September 30, 2008

(Stated in US Dollars)





F0

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China Health Care Corp





|Contents                                                      | Pages       
|------------------------------------------------------------- | ------------
|                                                              |             
|Report
      of Registered Independent Public Accounting Firm | 1           
|                                                              |             
|Consolidated
      Balance Sheets                             | 2
      -3  
|                                                              |             
|Consolidated
      Statements of Operations                   | 4           
|                                                              |             
|Consolidated
      Statements of Stockholders Equity         | 5           
|                                                              |             
|Consolidated
      Statements of Cash Flows                   | 6           
|                                                              |             
|Notes
      to the Financial Statements                       | 7
       23

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Board of Directors and Stockholders China Health Care Corp

Report of Registered Independent Public Accounting
Firm

We have reviewed the accompanying interim consolidated balance
sheets of China Health Care Corp (the Company) as of March 31, 2009 and
September 30, 2008, and the related consolidated statement of operations,
changes in stockholders equity, and cash flows for the three-month and
six-month periods ended March 31, 2009 and 2008. These interim consolidated
financial statements are the responsibility of the Company's management.

We conducted our review in accordance with the standards of the
Public Company Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit conducted in accordance with the
standards of Public Company Accounting Oversight Board, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material
modifications that should be made to the accompanying interim consolidated
financial statements for them to be in conformity with U.S. generally accepted
accounting principles.

As discussed in Note 1, the Company continued to incur losses
and working capital deficiencies that raise doubt over its ability to continue
as a going concern. The accompanying financial statements do not include any
adjustments to the financial statements that might be necessary should the
company be unable to continue as a going concern.



|South San Francisco, California | Samuel H. Wong & Co., LLP   
|------------------------------- | ----------------------------
|May 16, 2009                    | Certified Public Accountants

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China Health Care Corp Consolidated Balance Sheets At
March 31, 2009 and September 30, 2008 (Stated in US Dollars)

|                                                                |  |          |  |   | At          |  |   | At            | 
|--------------------------------------------------------------- |  | -------- |  | - | ----------- |  | - | ------------- | 
|                                                                |  |          |  |   | March 31,   |  |   | September 30, | 
|Assets                                                          |  | Note     |  |   | 2009        |  |   | 2008          | 
|                                                                |  |          |  |   | (unaudited) |  |   |               | 
|Current assets                                                  |  |          |  |   |             |  |   |               | 
|Cash                                                            |  | 2*(d)*   |  | $ | 40,071      |  | $ | 229,567       | 
|Accounts receivable                                             |  | 2*(e)*,3 |  |   | 163,169     |  |   | 193,050       | 
|Prepaid expenses                                                |  | 4        |  |   | 2,191       |  |   | 78,717        | 
|Total current assets                                            |  |          |  |   | 205,431     |  |   | 501,334       | 
|                                                                |  |          |  |   |             |  |   |               | 
|Non-current assets                                              |  |          |  |   |             |  |   |               | 
|Property and equipment                                          |  | 2*(f),*5 |  |   | 706,682     |  |   | 842,710       | 
|Goodwill                                                        |  | 6        |  |   | 155,201     |  |   | 154,809       | 
|Rent and utility deposits                                       |  |          |  |   | 1,160       |  |   | 867           | 
|                                                                |  |          |  |   |             |  |   |               | 
|Total assets                                                    |  |          |  | $ | 1,068,474   |  | $ | 1,499,720     | 
|                                                                |  |          |  |   |             |  |   |               | 
|Liabilities, Minority Interest, and Stockholders
      Deficit |  |          |  |   |             |  |   |               | 
|                                                                |  |          |  |   |             |  |   |               | 
|Current liabilities                                             |  |          |  |   |             |  |   |               | 
|Accounts payable                                                |  |          |  |   | 604,612     |  |   | 570,894       | 
|Dividends payable                                               |  |          |  |   | 19,915      |  |   | 24,884        | 
|Related party payables                                          |  | 7        |  |   | 2,708,881   |  |   | 2,510,978     | 
|Accrued liabilities                                             |  | 8        |  |   | 1,161,281   |  |   | 703,469       | 
|Convertible preferred stock - $0 par value,
      10,000 shares |  |          |  |   |             |  |   |               | 
|authorized; 600 and 4,605 shares issued and outstanding at      |  |          |  |   |             |  |   |               | 
|March 31, 2009, and September 30, 2008,
      respectively      |  | 9        |  |   | 1,507,000   |  |   | 1,503,226     | 
|Total current liabilities                                       |  |          |  |   | 6,001,689   |  |   | 5,313,451     | 
|                                                                |  |          |  |   |             |  |   |               | 
|Liabilities of discontinued operations                          |  |          |  |   |             |  |   |               | 
|Accounts payable                                                |  |          |  |   | 918,860     |  |   | 839,219       | 
|Accrued liabilities                                             |  | 14       |  |   | 22,274      |  |   | 20,504        | 
|                                                                |  |          |  |   | 941,134     |  |   | 859,723       | 
|                                                                |  |          |  |   |             |  |   |               | 
|Total liabilities                                               |  |          |  | $ | 6,942,823   |  | $ | 6,173,173     | 

See Accompanying Notes to the Financial Statements and
Accountants Report.

2

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China Health Care Corp Consolidated Balance Sheets At
March 31, 2009 and September 30, 2008 (Stated in US Dollars)

|                                                                      |  |          |  |   | At          |   |   | At            |  
|--------------------------------------------------------------------- |  | -------- |  | - | ----------- | - | - | ------------- | -
|                                                                      |  |          |  |   | March 31,   |   |   | September 30, |  
|                                                                      |  | **Note** |  |   | 2009        |   |   | 2008          |  
|                                                                      |  |          |  |   | (unaudited) |   |   | (audited)     |  
|Stockholders deficit                                                 |  |          |  |   |             |   |   |               |  
|Common stock - $0.001 par
      value, 200,000,000 shares             |  |          |  |   |             |   |   |               |  
|authorized; 50,148,000 and 50,148,000 shares
      issued and         |  |          |  |   |             |   |   |               |  
|outstanding at March 31, 2009
      and September 30, 2008,           |  |          |  |   |             |   |   |               |  
|respectively                                                          |  |          |  | $ | 50,148      |   | $ | 50,148        |  
|Additional paid in capital                                            |  |          |  |   | 21,632,697  |   |   | 21,632,697    |  
|Statutory Reverse                                                     |  |          |  |   | 4,781       |   |   | -             |  
|Accumulated deficits                                                  |  |          |  |   | (27,372,402 | ) |   | (26,310,851   | )
|Accumulated other comprehensive income (loss)                         |  |          |  |   | (245,390    | ) |   | (45,448       | )
|Minority interest                                                     |  |          |  |   | 55,817      |   |   | -             |  
|                                                                      |  |          |  |   |             |   |   |               |  
|Total stockholders' deficit                                           |  |          |  | $ | (5,874,349  | ) |   | (4,673,454    | )
|                                                                      |  |          |  |   |             |   |   |               |  
|Total liabilities, minority
      interest, and stockholders' deficit |  |          |  | $ | 1,068,474   |   | $ | 1,499,720     |  

See Accompanying Notes to the Financial Statements and
Accountants Report.

3

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China Health Care Corp Consolidated Statement of
Operations for the three and six months ended March 31, 2009 and 2008
(Stated in US Dollars)

3 months ended
    
    
    3 months ended
    
    
    6 months ended
    
    
    6 months endedMarch 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2009
    
    
    March 31, 2008Revenue
    
    2*(g),*15
    
    $
    55,484
    
    $
    88,122
    
    $
    162,649
    
    $
    235,171Cost of revenue
    
    2*(h)*
    
    
    21,836
    
    
    58,283
    
    
    63,092
    
    
    95,416Gross
      profit
    
    
    
    
    33,648
    
    
    29,839
    
    
    99,557
    
    
    139,755Selling expenses
    
    *2(i)*
    
    
    2,854
    
    
    30,975
    
    
    20,707
    
    
    88,895General and administrative expenses
    
    *2(j)*
    
    
    720,558
    
    
    1,057,129
    
    
    1,165,420
    
    
    1,305,002Total
      operating expenses
    
    
    
    
    723,412
    
    
    1,088,104
    
    
    1,186,127
    
    
    1,393,897Other income
      (expenses)Other income
    
    
    
    
    3,219
    
    
    (133,790
    )
    
    8,726
    
    
    48,196Interest
      income
    
    
    
    
    6
    
    
    56
    
    
    32
    
    
    285Interest expense
    
    
    
    
    (7,820
    )
    
    (7,272
    )
    
    (19,815
    )
    
    (174,614
    )Other
      expenses
    
    
    
    
    (38,499
    )
    
    (12,734
    )
    
    (40,810
    )
    
    (25,133
    )Total other income (expenses)
    
    
    
    
    (43,094
    )
    
    (153,740
    )
    
    (51,867
    )
    
    (151,266
    )Loss before income tax
    
    
    
    
    (732,858
    )
    
    (1,212,005
    )
    
    (1,138,437
    )
    
    (1,405,408
    )Provision for income tax
    
    2*(k)*
    
    
    -
    
    
    (8,095
    )
    
    -
    
    
    (8,095
    )Loss from continued
      operations
    
    
    
    
    (732,858
    )
    
    (1,220,100
    )
    
    (1,138,437
    )
    
    (1,413,503
    )Gain (Loss) from discontinued operations,
      netof taxes
    
    14
    
    
    19,093
    
    
    (84,291
    )
    
    81,650
    
    
    (326,524
    )$Net (Loss) before
      noncontrolling interests
    
    
    
    $
    (713,765
    )
    $
    (1,304,391
    )
    $
    (1,056,787
    )
    
    (1,740,027
    )Net (Loss) Attributable to:- Parent
    
    
    
    
    (713,765
    )
    
    (1,304,391
    )
    
    (1,056,787
    )
    
    (1,740,027
    )- Non-controlling
      Interest
    
    
    
    
    17
    
    
    (22,634
    )
    
    17
    
    
    -$
    (713,748
    )
    $
    (1,327,026
    )
    $
    (1,056,770
    )
    $
    (1,740,027
    )Earnings (loss) per share
    
    2(*l),*13Basic and
      diluted
    
    
    
    $
    (0.0142
    )
    $
    (0.0309
    )
    $
    (0.0211
    )
    $
    (0.0422
    )Weighted average shares outstandingBasic and
      diluted
    
    
    
    
    50,148,000
    
    
    42,977,165
    
    
    50,148,000
    
    
    41,190,809Statement of
      Comprehensive Income
    
    
    
    
    3 months ended
    
    
    3 months ended
    
    
    6 months ended
    
    
    6 months ended(Loss):
    
    Note
    
    
    March 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2009
    
    
    March 31, 2009$Net
      income (loss)
    
    
    
    $
    (713,748
    )
    $
    (1,327,026
    )
    $
    (1,056,770
    )
    
    (1,740,027
    )Other
      comprehensive income (loss)
    
    2*(m)*Foreign currency translationadjustment
    
    2(n)
    
    
    (233,882
    )
    
    102,252
    
    
    (199,943
    )
    
    370,768Total
      comprehensive income$
    (947,630
    )
    $
    1,224,774
    
    $
    (1,256,713
    )
    $
    1,369,259


See Accompanying Notes to the Financial Statements and
Accountants Report.

4

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China Health Care CorpConsolidatedStatementsofStockholdersEquity at March 31,
2009 andSeptember30, 2008(Statedin USDollars)

|                                        |  | Common Stock |  |   | Paid   |  |   |            |  |   |           |  |   | Other       |   |   |               |   |   |           | 
|--------------------------------------- |  | ------------ |  | - | ------ |  | - | ---------- |  | - | --------- |  | - | ----------- | - | - | ------------- | - | - | --------- | 
|                                        |  | Shares       |  |   | Par    |  |   | in         |  |   | Statutory |  |   | Accumulated |   |   | Comprehensive |   |   | Minority  | 
|                                        |  | Outstanding  |  |   | Amount |  |   | Capital    |  |   | Reserve   |  |   | Deficit     |   |   | Income (loss) |   |   | Interests | 
|Balance, October 1, 2007                |  | 39,314,000   |  | $ | 39,314 |  | $ | 10,477,823 |  | $ | -         |  | $ | (23,609,499 | ) | $ | (115,900      | ) | $ | -         | 
|Conversion of preferred stock           |  | 8,928,000    |  |   | 8,928  |  |   | 9,787,640  |  |   |           |  |   |             |   |   |               |   |   |           | 
|Issuance of common stock                |  | 1,906,000    |  |   | 1,906  |  |   | 1,367,234  |  |   |           |  |   |             |   |   |               |   |   |           | 
|Net loss                                |  |              |  |   |        |  |   |            |  |   |           |  |   | (2,701,352  | ) |   |               |   |   |           | 
|Foreign currency translation adjustment |  |              |  |   |        |  |   |            |  |   |           |  |   |             |   |   | 70,452        |   |   |           | 
|Balance, September 30, 2008             |  | 50,148,000   |  | $ | 50,148 |  | $ | 21,632,697 |  | $ | -         |  | $ | (26,310,851 | ) | $ | (45,448       | ) | $ | -         | 
|                                        |  |              |  |   |        |  |   |            |  |   |           |  |   |             |   |   |               |   |   |           | 
|Balance, October 1, 2008                |  | 50,148,000   |  | $ | 50,148 |  | $ | 21,632,697 |  | $ | -         |  | $ | (26,310,851 | ) | $ | (45,448       | ) | $ | -         | 
|Net loss                                |  |              |  |   |        |  |   |            |  |   |           |  |   | (1,056,770  | ) |   |               |   |   |           | 
|Appropriate from retained earnings      |  |              |  |   |        |  |   |            |  |   | 4,781     |  |   | (4,781      | ) |   |               |   |   |           | 
|Noncontrolling interests                |  |              |  |   |        |  |   |            |  |   |           |  |   |             |   |   |               |   |   | 55,817    | 
|Foreign currency translation adjustment |  |              |  |   |        |  |   |            |  |   |           |  |   |             |   |   | (199,943      | ) |   |           | 
|                                        |  |              |  |   |        |  |   |            |  |   |           |  |   |             |   |   |               |   |   |           | 
|Balance, March 31, 2009                 |  | 50,148,000   |  | $ | 50,148 |  | $ | 21,632,697 |  | $ | 4,781     |  | $ | (27,372,402 | ) | $ | (245,390      | ) | $ | 55,817    | 

SeeAccompanyingNotes to theFinancialStatementsandAccountantsReport.

5

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China Health Care Corp Consolidated Statements of Cash
Flows for the three and six months ended March 31, 2009 and 2008 (Stated
in US Dollars)

|                                                            |   | 3 months       |   |   | 3 months       |   |   | 6 months       |   |   | 6 months       |  
|----------------------------------------------------------- | - | -------------- | - | - | -------------- | - | - | -------------- | - | - | -------------- | -
|                                                            |   | ended          |   |   | ended          |   |   | ended          |   |   | ended          |  
|                                                            |   | March 31, 2009 |   |   | March 31, 2008 |   |   | March 31, 2009 |   |   | March 31, 2008 |  
|Cash Flow from Operating Activities                         |   |                |   |   |                |   |   |                |   |   |                |  
|Net income (loss)                                           | $ | (713,748       | ) | $ | (1,327.026     | ) | $ | (1,056,770     | ) | $ | (1,740,027     | )
|                                                            |   |                |   |   |                |   |   |                |   |   |                |  
|Adjustments to reconcile net loss to net
      cash used in |   |                |   |   |                |   |   |                |   |   |                |  
|operating activities:                                       |   |                |   |   |                |   |   |                |   |   |                |  
|Depreciation                                                |   | 70,456         |   |   | 39,851         |   |   | 143,210        |   |   | 104,263        |  
|Minority interest                                           |   | 55,817         |   |   | -              |   |   | 55,817         |   |   | -              |  
|Decrease/(Increase) in
      accounts receivable            |   | (31,831        | ) |   | 38,316         |   |   | 29,880         |   |   | 101,904        |  
|Decrease/(Increase) in related party
      receivable       |   | -              |   |   | 526,361        |   |   | -              |   |   | 509,608        |  
|Decrease/(Increase) in
      prepaid expenses               |   | 12,766         |   |   | 231,572        |   |   | 76,526         |   |   | (73,024        | )
|(Decrease)/Increase in accounts
      payables              |   | 37,124         |   |   | (70,928        | ) |   | 113,359        |   |   | (94,792        | )
|(Decrease)/Increase in
      accrued liabilities            |   | 649,728        |   |   | 746,772        |   |   | 459,580        |   |   | 665,855        |  
|(Decrease)/Increase in related party
      payable          |   | 132,699        |   |   | (59,969        | ) |   | 201,678        |   |   | 52,183         |  
|(Decrease)/Increase in
      dividend payable               |   | -              |   |   | -              |   |   | (4,969         | ) |   |                |  
|                                                            |   |                |   |   |                |   |   |                |   |   |                |  
|Cash provided by
      operating activities                 |   | 203,011        |   |   | 124,949        |   |   | 18,311         |   |   | (474,030       | )
|                                                            |   |                |   |   |                |   |   |                |   |   |                |  
|Cash Flows from Investing Activities                        |   |                |   |   |                |   |   |                |   |   |                |  
|Rent and utility (deposits
      paid)/deposits refund      |   | (293           | ) |   | 1,211          |   |   | (293           | ) |   | -              |  
|Proceeds from
      Intangible Assets                       |   | (4             | ) |   | -              |   |   | (391           | ) |   | -              |  
|Proceeds from sales of/(purchase of)
      equipment        |   | (46            | ) |   | (7,541         | ) |   | (7,181         | ) |   | (8,985         | )
|Cash used in investing
      activities                     |   | (343           | ) |   | (6,330         | ) |   | (7,866         | ) |   | (8,985         | )
|                                                            |   |                |   |   |                |   |   |                |   |   |                |  
|Cash Flows from Financing Activities                        |   |                |   |   |                |   |   |                |   |   |                |  
|Proceeds from issuance of stock                             |   | -              |   |   | -              |   |   | -              |   |   | -              |  
|Issuance of convertible
      preferred stock               |   | -              |   |   | -              |   |   | -              |   |   | -              |  
|Paid Dividend                                               |   | -              |   |   | -              |   |   | -              |   |   | -              |  
|Cash Sourced/(Used) in
      Financing Activities           |   | -              |   |   | -              |   |   | -              |   |   | -              |  
|                                                            |   |                |   |   |                |   |   |                |   |   |                |  
|Net Increase/(Decrease) in Cash &
      Cash                |   |                |   |   |                |   |   |                |   |   |                |  
|Equivalents for the Period                                  |   | 212,668        |   |   | 118,619        |   |   | 10,445         |   |   | (483,015       | )
|                                                            |   |                |   |   |                |   |   |                |   |   |                |  
|Effect of Currency Translation                              |   | (233,881       | ) |   | (186,071       | ) |   | (199,941       | ) |   | 82,445         |  
|                                                            |   |                |   |   |                |   |   |                |   |   |                |  
|Cash & Cash Equivalents at Beginning of Period              |   | 61,284         |   |   | 83,587         |   |   | 229,567        |   |   | 416,705        |  
|                                                            |   |                |   |   |                |   |   |                |   |   |                |  
|Cash & Cash Equivalents at End of Period                    | $ | 40,071         |   | $ | 16,135         |   | $ | 40,071         |   | $ | 16,135         |  

See Accompanying Notes to the Financial Statements and
Accountants Report.

6

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China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

|1. | ORGANIZATION AND PRINCIPAL ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | History                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | China Health Care Corporation (the Company) was
      incorporated in the state of Wyoming on February 11, 2005 under the name
      of The Cavalier Group. On May 13, 2008, the Secretary of State of Wyoming
      effected a change of the Company to China Health Care Corporation, as
      approved by our shareholders. On January 20, 2008, the Company entered
      into a share exchange agreement with United Premier Medical Group Limited
      (UPMG) and its shareholders to acquire all of the outstanding common
      shares of UPMG. The transaction closed on July 24, 2008.                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The share exchange transaction has been accounted for as
      a recapitalization of UPMG where the Company (the legal acquirer) is
      considered the accounting acquiree and UPMG (the legal acquiree) is
      considered the accounting acquirer. As a result of this transaction, the
      Company is deemed to be a continuation of the business of UPMG.                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Accordingly, the financial data included in the
      accompanying consolidated financial statements for all periods prior to
      July 24, 2008 is that of the accounting acquirer (UPMG). The historical
      stockholders equity of the accounting acquirer prior to the share
      exchange has been retroactively restated as if the share exchange
      transaction occurred as of the beginning of the first period
    presented.                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | United Premier Medical Group Limited (UPMG) is a
      medical consultancy service provider in the Peoples Republic of China
      (PRC) providing services in the areas of hospital management and
      specialty medical consultancy. UPMGs primary focus is the health care
      needs of women and children.                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The business was founded in 2001, with UPMG as the
      ultimate holding company. UPMG was organized under the laws of Cayman
      Island on March 28, 2003, whereas UPMG International Limited (UPMGI) was
      incorporated in the British Virgin Islands on September 15, 2003. The
      intention is to build the Company using a holding company structure, with
      a top-level entity owing interests in operating entities. Separate
      operating entities are established in each geographic region. At times,
      the company owns less than 100% of an operating entity because this
      enables the use of resources and expertise of local partners.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | There were a number of restructuring events, which
      occurred over the past several years. These events would
  include:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| | • | On July 19, 2001, UPMGI acquired 50% of the operating
      entity Proactive Medicare Enterprise (Hong Kong) Limited (PME-HK). At
      the same time, PME-HK held 90% in equity interest of the operating entity
      Shanghai Proactive Medicare Health Education Center Limited (BK-SH).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                 
| | • | On May 5, 2003, UPMG acquired 100% of UPMGI and hence
      UPMGI became a wholly-owned subsidiary of UPMG.                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                 
| | • | On March 17, 2004, UPMGI increased its ownership of the
      operating entity PME-HK from 50% to 100% and hence PME-HK became a
      wholly-owned subsidiary of UPMGI.                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                 
| | • | Pro-Innovative Holdings Limited (PHL), an investment
      holding company, was incorporated on January 22, 2004 with 51% in equity
      interest held by UPMG.                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                 
| | • | On February 17, 2004, UPMG transferred all common
      shareholding in Ideamart Holdings Limited (Ideamart) to PHL. Ideamart,
      which incorporated on May 28, 2003, is a dormant company.                                                                                                

1

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China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

| | • | On March 19, 2004, UPMG International (Guangdong) Limited
      (UPMGIG) increased its ownership of UPMG (Guangdong) Company Limited
      (UPMGGC) from 99% to 100%.                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                        
| | • | On May 7, 2004, PHL transferred 100% of its ownership in
      UPMG (Hong Kong) Limited (UPMG-HK) and UPMG (US) Limited (UPMG-US) to
      UPMGI and hence UPMG-HK and UPMG-US became the wholly-owned subsidiaries
      of UPMGI.
| |   |                                                                                                                                                                                                                                        
| | • | In April 2007, UPMG-HK disposed of its 100% interest in
      Broad Prosper Limited.                                                                                                                                                   

Current Structure & Basis of
Presentation

The Company owned the following
subsidiaries at March 31, 2009:

No.
      **Company** Code
      Company Name
      Place of Incorporation
      Date of Incorporation
      Remark1
    UPMG
    United Premier Medical Group Limited
    Cayman Islands
    March 28, 2003
    Ultimate Holding Company2
    UPMGI
    UPMG International Limited
    British Virgin Islands
    September 15, 2003
    Subsidiary of UPMG3
    PME-HK
    Proactive Medicare Enterprise (Hong Kong)
      Limited
    Hong Kong
    March 17, 2000
    Wholly-owned subsidiary of UPMGI4
    PME-SZ
    Proactive Medicare (Shenzhen) Company Limited
    Hong Kong
    September 24, 2004
    Wholly-owned subsidiary of UPMGI5
    PME-CS
    Proactive Medicare (Changsha) Company Limited
    Hong Kong
    July 2, 2004
    Wholly-owned subsidiary of UPMGI6
    PME-XIA
    Proactive Medicare (Xiamen) Company Limited
    Hong Kong
    December 22, 2004
    Wholly-owned subsidiary of UPMGI7
    PME-NAN
    Proactive Medicare (Nanjing) Company Limited
    Hong Kong
    September 24, 2005
    Wholly-owned subsidiary of UPMGI8
    PME-HZ
    Proactive Medicare (Hangzhou) Company Limited
    Hong Kong
    August 25, 2005
    Wholly-owned subsidiary of UPMGI9
    PME-WX
    Proactive Medicare (Wuxi) Company Limited
    Hong Kong
    April 19, 2004
    Wholly-owned subsidiary of UPMGI10
    UPMG-SHA
    United Premier Medical Group (Shanghai) Limited
    Hong Kong
    February 25, 2004
    Wholly-owned subsidiary of UPMGI11
    PMS-HK
    Proactive Medicare Services (Hong Kong) Limited
    Hong Kong
    January 30, 2004
    Wholly-owned subsidiary of UPMGI12
    PME-BJ
    Proactive Medicare (Beijing) Company Limited
    Hong Kong
    March 27, 2000
    Wholly-owned subsidiary of UPMGI13
    UPMG-HK
    UPMG (Hong Kong) Limited
    British Virgin Islands
    August 8, 2003
    Wholly-owned subsidiary of UPMGI14
    UPMG-US
    UPMG (US) Limited
    British Virgin Islands
    November 23, 1993
    Wholly-owned subsidiary of UPMGI


2

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China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

No.
      Company Code
      Company Name
      Place of Incorporation
      Date of Incorporation
      Remark15
    HB-GZ
    Guangzhou Inno-Proactive Medicare Consultancy
      Ltd.
    PRC
    October 26, 2004
    Wholly-owned subsidiary of PMEHK16
    BK-SH
    Shanghai Proactive Medicare Health Education
      Center Limited
    PRC
    February 5, 2002
    90% of common shareholding held by PMEHK17
    UBK-SZ
    UPMG (Shenzhen) Limited
    PRC
    January 5, 2006
    Wholly-owned subsidiary of UPMG-US18
    UPMG-MU
    UPMG (Macau) Company Limited
    Macau
    September 29, 2006
    50% of common shareholding held by UPMG-HK19
    PHL
    Pro-Innovative Holdings Limited
    British Virgin Islands
    January 22, 2004
    51% of common shareholding held by UPMG20
    PML
    Pro-Innovative Medical Limited
    Hong Kong
    December 8, 2003
    Wholly-owned subsidiary of PHL21
    Ideamart
    Ideamart Holdings Limited
    British Virgin Islands
    May 28, 2003
    Wholly-owned subsidiary of PHL22
    UPMGIG
    UPMG International (Guangdong) Limited
    British Virgin Islands
    August 29, 2003
    62% of common shareholding held by PHL23
    UPMGGC
    UPMG (Guangdong) Company Limited
    Hong Kong
    August 14, 2002
    Wholly-owned subsidiary of UPMGIG


The consolidated financial statements
include the accounts of UPMG and its consolidated subsidiaries. UPMG wholly owns
UPMGI, which in turn directly holds 12 wholly-owned subsidiaries and indirectly
holds 4 subsidiaries including HB-GZ (100% in equity interest), BK-SH (90% in
equity interest), UBK-SZ (100% in equity interest) and UPMG-MU (50% in equity
interest). Besides, UPMG holds 51% in equity interest of PHL, which in turn,
wholly owns two direct subsidiaries and holds 62% in equity interest of UPMGIG,
which in turn wholly owns UPMGGC

Business

The Company provides consultancy
services to the VIP Maternity & Gynecological Centers (the VIP Birthing
Centers) in the PRC. These services are provided in conjunction with Johns
Hopkins International, LLC, a U.S. based healthcare provider, and based upon a
Consultancy Agreement with JHI. (The Company and JHI are currently disputing
certain material terms of the consultancy agreement  see below, and note 14).
The first VIP Birthing Center commenced operations in October 2002 at the
International Peace Maternity & Child Health Hospital in Shanghai. Over the
past six years, we have signed co-operative agreements with a number of
hospitals in Obstetrics / Gynecology (OB/GYN) across the PRC in cities
including Beijing, Shanghai, Guangzhou, Foshan, Wuxi, Xiamen, Changsha and
Hangzhou. In 2006, we signed a management agreement with the University Hospital
at Macau University of Science and Technology (UH-MUST) whereby we provide
general hospital management consultancy service.

We are currently under contracts to
provide consultancy services to a total of five VIP Birthing Centers in the PRC
and to manage a private hospital in Macau. These centers are located in Wuxi
(the Wuxi Center), Xiamen (the Xiamen Center), Changsha (the Changsha
Center), Foshan (the Foshan Center) and Hangzhou (the Hangzhou Center). The
Wuxi Center, the Xiamen Center and the hospital in Macau are

3

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China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

operated under our service contracts,
and we receive a monthly fee for our services. We have had difficulty enforcing
these contracts, and three of the VIP Birthing Centers have ceased complying
with our payment terms (the Changsha Center, the Foshan Center, and the Hangzhou
Center). We engaged lawyers to negotiate with the host hospitals for settlement.
We also had a VIP Birthing Center in Shanghai (the Shanghai Center). We have
not been paid by the Shanghai Center since January 2006 and we have taken legal
action against the host hospital for breach of contract.

We had an additional VIP Birthing
Center in Guangzhou (the Guangzhou Center) which ceased its operation in March
2007. Our invested assets were sold back to its host hospital. Our net receipt
on this asset sale amounted to $1,296,944. For the abovementioned centers that
we have difficulty enforcing our contracts, we have not accrued any revenue for
the years ended September 30, 2007 and 2006.

4

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China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The accompanying consolidated financial statements have
      been prepared assuming that the Company will continue as a going concern.
      The Company has a net loss of $1,056,770 for the six months through March
      31, 2009; a working capital deficiency of $5,796,258; and a shareholders
      deficit of $5,847,349 at March 31, 2009. These matters raise substantial
      doubt about the Companys ability to continue as a going concern if the
      Company does not secure new outside financing. The Company is currently
      and continues to make efforts to procure outside financing to strengthen
      its financial position.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| | (a) | Method of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | The Company maintains its general ledger and journals
      with the accrual method of accounting for financial reporting purposes.
      The financial statements and notes are representations of management.
      Accounting policies adopted by the Company conform to generally accepted
      accounting principles in the United States of America and have been
      consistently applied in the presentation of financial statements, which
      are compiled on the accrual basis of accounting.                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Inter-company transactions, such as due to/due from
      balances, investment in subsidiaries, and subsidiaries capitalization
      have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (c) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | In preparing the financial statements in conformity with
      accounting principles generally accepted in the United States of America,
      management makes estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosures of contingent assets and
      liabilities at the dates of the financial statements, as well as the
      reported amounts of revenues and expenses during the reporting years.
      These estimates and assumptions include, but are not limited to, the
      valuation of accounts receivable, inventories, deferred income taxes and
      the estimation of useful lives of property, plant, and equipment. Actual
      results could differ from these estimates.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (d) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | The Company considers all cash and other highly liquid
      investments with initial maturities of three months or less to be cash
      equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (e) | Accounts Receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Accounts receivables are recognized and carried at the
      original invoice amount less allowance for any uncollectible amounts.
      Management regularly reviews the Companys outstanding receivables
      balance, and will provide allowance for doubtful accounts based on its
      assessment. Bad debts are charged against allowances when outstanding
      receivables have been determined to be uncollectible. See Note 3 
      Accounts Receivable.                                                                                                                                                                                                                                                                            

5

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China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

| | (f) | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | Property and equipment are stated at cost less
      accumulated depreciation and any impairment write-downs related to assets
      held and used. Additions and improvements to equipment are capitalized at
      cost. Expenditures for maintenance and repairs are charged to expense as
      incurred. Depreciation of equipment is provided over their estimated
      useful lives, using the straight-line method. Estimated useful lives of
      the equipment are as follows:

Software
    5 yearsCenter equipment
    5 yearsOffice equipment
    5 yearsFurniture and fixtures
    5 yearsLeasehold improvement
    5 - 10 yearsMachinery
    5 years


| |     | The cost and related accumulated depreciation of assets
      sold or otherwise retired are eliminated from the accounts and any gain or
      loss is included in the statement of income. The cost of maintenance and
      repairs is charged to the statement of operations as incurred, whereas
      significant renewals and betterments are capitalized. See Note 6
      Equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (g) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Companys revenues are derived from its share of
      operating profit from VIP Birthing Centers at hospitals where it has
      invested in capital equipment, leasehold improvements, and human capital
      in the form of technical training for hospital staff. The Companys share
      of operating profit from the VIP Birthing Centers depends upon the
      contractual terms with each hospital. The typical share of operating
      profit ranges between 70% and 80% of the total operating profit of the VIP
      Birthing Center. Financial statements are provided by the hospitals each
      month to the Company for review, verification, and approval. When the
      financial statements of the VIP Birthing Centers have been approved, the
      Company recognizes revenue by recording its portion of the total operating
      profit to its financial statements. Revenues that have been both
      recognized in accordance to their respective contracts and financial
      statements provided by the hospitals can be reasonably expected to be
      collectible.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (h) | Cost of Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | Cost of revenue is primarily comprised of depreciation,
      wages, and licensing fees that must be paid to JHI for facilities with
      continuing operation. The Company believes that the depreciation of
      property and equipment matches the substantial initial investment
      equipment and leasehold improvements with revenues that are earned
      overtime. The Company charges wages paid to doctors and medical personnel
      who provide the initial training and hospital management expertise to the
      hospital when the VIP Birthing centers are initially setup and on a
      non-fixed on-going basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (i) | Selling Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | Selling expenses are comprised of client entertainment,
      commissions and salaries for sales personnel, marketing, and travel and
      lodging expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (j) | General & Administrative Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | General and administrative expenses include outside
      consulting services, research & development, executive compensation,
      quality control, and general overhead such as finance and administrative
      staff, and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

6

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China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

| |     | depreciation expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Company uses the accrual method of accounting to
      determine and report its taxable income for the year. The Company has
      implemented Statement of Financial Accounting Standards (SFAS) No. 109,
      Accounting for Income Taxes. The Company also adopted FIN 48, Accounting
      for Uncertainty in Tax Positions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | Income tax liabilities computed according to the United
      States, Peoples Republic of China (PRC), Hong Kong SAR and Macau SAR laws
      are provided for the tax effects of transactions reported in the financial
      statements and consists of taxes currently due plus deferred taxes related
      primarily to differences between the basis of fixed assets and intangible
      assets for financial and tax reporting. The deferred tax assets and
      liabilities represent the future tax return consequences of those
      differences, which will be taxable or deductible when the assets and
      liabilities are recovered of settled. Deferred taxes also are recognized
      for operating losses that are available to offset future income taxes. A
      valuation allowance is created to evaluate deferred tax assets if it is
      more likely than not that these items will either expire before the
      Company is able to realize that tax benefit, or that future realization is
      uncertain.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (l) | Earnings (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Company computers earnings per share (EPS) in
      accordance with Statement of Financial Accounting Standards No. 128,
      Earnings per Share (SFAS NO. 128), and SEC Staff Accounting Bulletin
      No. 98 (SAB 98). SFAS No. 128 requires companies with complex capital
      structures to present basic and diluted EPS. Basic EPS is measured as the
      income or loss available to common shareholders divided by the weighted
      average common shares outstanding for the period. Diluted EPS is similar
      to basic EPS but presents the dilutive effect on a per share basis of
      potential common shares (e.g., convertible securities, options, and
      warrants) as if they had been converted at the beginning of the periods
      presented, or issuance date, if later. Potential common shares that have
      an anti-dilutive effect (i.e., those that increase income per share or
      decrease loss per share) are excluded from the calculation of diluted
      EPS.                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (m) | Other Comprehensive Income (Loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | Comprehensive income is defined to include all changes in
      equity except those resulting from investments by owners and distributions
      to owners. Among other disclosures, all items that are required to be
      recognized under current accounting standards as components of
      comprehensive income are required to be reported in a financial statement
      that is presented with the same prominence as other financial statements.
      The Companys current component of other comprehensive income is the
      foreign currency translation adjustment.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (n) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Company maintains its financial statements in the
      functional currency, which is the Renminbi (RMB). Monetary assets and
      liabilities denominated in currencies other than the functional currency
      are translated into the functional currency at rates of exchange
      prevailing at the balance sheet dates. Transactions denominated in
      currencies other than the functional currency are translated into the
      functional currency at the exchanges rates prevailing at the dates of the
      transaction. Exchange gains or losses arising from foreign currency
      transactions are included in the determination of net income for the
      respective periods.                                                                                                                                                                                                                                                                                                                                    

7

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

For financial reporting purposes, the
financial statements of the Company, which are prepared using the functional
currency, have been translated into United States dollars. Assets and
liabilities are translated at the exchange rates at the balance sheet dates and
revenue and expenses are translated at the average exchange rates and
stockholders equity is translated at historical exchange rates. Translation
adjustments are not included in determining net income but are included in
foreign exchange adjustment to other comprehensive income, a component of
stockholders equity.

The accompanying consolidated
financial statements are presented in United States dollars. The functional
currency of the Company is Hong Kong dollars (HK$). Equity accounts of the
consolidated financial statements are translated into United States dollars from
HK$ at their historical exchange rates when the capital transactions occurred.
Assets and liabilities are translated at the exchange rates as of balance sheet
date. Income and expenditures are translated at the average exchange rate of the
year. Translation adjustments are not included in determining net income but are
included in foreign currency translation adjustment in other comprehensive
income, a component of stockholders equity.

March 31,
    
    
    December 31,
    
    
    September 30,2009
    
    
    2008
    
    
    2008HKD-USD Year End Rate
    
    7.75050
    
    
    7.75070
    
    
    7.77010HKD-USD Average Rate
    
    7.75469
    
    
    7.75461
    
    
    7.79297RMB-USD Year End Rate
    
    6.84560
    
    
    6.85420
    
    
    6.85510RMB-USD Average Rate
    
    6.84994
    
    
    6.85322
    
    
    7.11061


| | (o) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | In March 2008, the FASB issued SFAS No. 161, "Disclosures
      about Derivative Instruments and Hedging Activities, an amendment of FASB
      Statement No. 133" ("SFAS 161"). SFAS 161 applies to all derivative
      instruments and related hedged items accounted for under SFAS No. 133,
      "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
      133"). SFAS 161 requires entities to provide greater transparency about
      (a) how and why an entity uses derivative instruments, (b) how derivative
      instruments and related hedged items are accounted for under SFAS 133 and
      its related interpretations, and (c) how derivative instruments and
      related hedged items affect an entity's financial position, results of
      operations and cash flows. SFAS 161 is effective for financial statements
      issued for fiscal years and interim periods beginning after November 15,
      2008.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | In May 2008, the FASB issued SFAS No. 162, "The Hierarchy
      of Generally Accepted Accounting Principles" ("SFAS 162"). SFAS 162
      identifies the sources of accounting principles and the framework for
      selecting the principles used in the preparation of financial statements
      of nongovernmental entities that are presented in conformity with
      generally accepted accounting principles (the GAAP hierarchy).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Statement 162 will become effective 60 days following the
      SEC's approval of the Public Company Accounting Oversight Board amendments
      to AU Section 411, "The Meaning of Present Fairly in Conformity With
      Generally Accepted Accounting Principles."                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | In May 2008, the FASB issued FSP Accounting Principles
      Board ("APB") 14-1 "Accounting for Convertible Debt Instruments That May
      Be Settled in Cash upon Conversion (Including Partial Cash Settlement)"
      ("FSP APB 14-1"). FSP APB 14-1 requires the issuer of certain convertible
      debt instruments that may be settled in cash (or other assets) on
      conversion to separately account for the liability (debt) and equity
      (conversion option) components of the instrument in a manner that reflects
      the issuer's non- convertible debt borrowing rate. FSP APB 14-1 is
      effective for fiscal years beginning after December 15, 2008 on a
      retroactive basis.                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | The Company is currently evaluating the potential impact,
      if any, of the adoption of the above recent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

8

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

accounting pronouncements on its
consolidated results of operations and financial condition.

|3. | ACCOUNTS RECEIVABLE
|-- | -------------------

At March 31,
    
    
    At September 30,2009
    
    
    2008Total Accounts
      Receivable-Trade
    $
    163,169
    
    $
    193,050Less: Allowance for Bad Debt
    
    -
    
    
    -$
    163,169
    
    $
    193,050Allowance for Bad
      DebtsBeginning Balance
    $
    -
    
    $
    -Allowance Provided
    
    -
    
    
    -Less:Bad Debt Written
      Off
    
    -
    
    
    -Ending Balance
    $
    -
    
    $
    -


|   |                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------
|   |                                                                                                          
|4. | PREPAID EXPENSES                                                                                         
|   |                                                                                                          
|   | The prepaid expenses at March 31, 2009 and September
        30, 2008 are shown in the following table: -

At March 31,
    
    
    At September 30,2009
    
    
    2008Purchases of baby beds
    $
    -
    
    $
    74,689Various miscellaneous
    
    2,191
    
    
    4,028$
    2,191
    
    $
    78,717


|   |                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------
|   |                                                                                                               
|5. | PROPERTY AND EQUIPMENT                                                                                        
|   |                                                                                                               
|   | Property and equipment, which are stated at cost less
        depreciation, were comprised of the following: -

At March 31,
    
    
    At September 30,2009
    
    
    2008Category of AssetFurniture & fixtures
    $
    493,876
    
    $
    492,631Office equipment
    
    8,321
    
    
    8,738Computer software
    
    42,578
    
    
    42,470Leasehold improvement
    
    243,082
    
    
    241,208Center equipment
    
    929,839
    
    
    925,4681,717,696
    
    
    1,710,515Less:Accumulated DepreciationFurniture & fixtures
    
    245,761
    
    
    214,668Office equipment
    
    2,332
    
    
    1,503


9

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

Computer software
    
    22,966
    
    
    18,661Leasehold improvement
    
    107,145
    
    
    94,474Center equipment
    
    632,810
    
    
    538,4991,011,014
    
    
    867,805Equipment, net
    $
    706,682
    
    $
    842,710


|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6. | GOODWILL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Goodwill amounting to $155,201 and $154,809 as of March
        31, 2009 and September 30, 2008 is related to the acquisition of the minority
        interest of PME-WX, for which the companys subsidiary, UPMGI, purchased
        the remaining 20% of interest from other stockholder in 2004. Management
        annually reviews the carry value of goodwill using the sum of the undiscounted
        cash flows generated by PME-WX to determine if an impairment charge is
        necessary. The Company has determined no impairment to the goodwill as
        of date.

10

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

|7. | RELATED PARTY PAYABLES                                                              
|-- | ------------------------------------------------------------------------------------
|   |                                                                                     
|   | The following table presents the balances the Company
      owed to related parties.

**At March
      31,**
    
    
    At September 30,2009
    
    
    2008Due to Director: Robert Yao
      WingWong
    $
    703,593
    
    $
    854,892Due to Director: Yuen Yee
      Wong
    
    124,722
    
    
    -Due to Director: Andrew Kamer
    
    200,566
    
    
    -Due to Director: Lau Kin
      Chung,Gerald
    
    83,349
    
    
    -Loan from Innotech
    
    1,596,651
    
    
    1,656,086$
    2,708,881
    
    $
    2,510,978


Due to Director

Payables owed to the Companys
directors are non- interest- bearing and, payable on demand. There is no impact
to the statement of operations as result of the payables to the directors.

Loan from Innotech

On June 20, 2007, Inno-Tech Holdings
Limited (Innotech), a shareholder of United Premier Medical Group Limited
(UPMG), loaned $772,777 (equivalent to HK$6,000,000) to UPMG for use as
working capital. The repayment date was originally June 22, 2008, but was
subsequently extended to December 22, 2008.

On January 10, 2008, Innotech loaned
$384,615 (HK$3,000,000) to UPMG with the original repayment date on January 9,
2009. On January 25, 2008, Innotech loaned another $512,820 (HK$4,000,000) to
UPMG with the original repayment date on January 24, 2009. These loan repayment
dates have been extended. During the period ended June 30, 2008 and 2007, the
Company incurred interest expense of $45,860 and $1,517 respectively.

On November 1, 2008, Innotech lowered
the interest rates from 5% per annum to 2% per annum and extended the repayment
until June, 22 2008.

During the period ended March 31, 2009
and 2008, the Company incurred interest expense of $19,815 and $174,614
respectively.

The following table summarizes the loan
from related party: -

At March 31,2009Loan principal amount
    $
    1,670,212Accrued interest payable
    
    19,770Repayment, net
    
    (82,963
    )Translation difference
    
    (10,368
    )Balance at March 31, 2009
    $
    1,596,651


11

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

On April 29, 2008, the loan from
related party was extended as below:

| | Date of Loan     |  | Loan Principal |  |  | Loan Principal |   |  | Original          |  |  | New            | 
| | ---------------- |  | -------------- |  |  | -------------- | - |  | ----------------- |  |  | -------------- | 
| | Agreement        |  | Amount (USD)   |  |  | Amount (HKFD)  |   |  | Repayment Date    |  |  | Repayment Date | 
| | June 20, 2007    |  | 772,777        |  |  | (HK$6,000,000  | ) |  | December 22, 2008 |  |  | June 22, 2009  | 
| | January 10, 2008 |  | 384,615        |  |  | (HK$3,000,000  | ) |  | July 9, 2009      |  |  | July 9, 2009   | 
| | January 25, 2008 |  | 512,820        |  |  | (HK$4,000,000  | ) |  | July 24, 2009     |  |  | July 24, 2009  | 
| |                  |  | $1,670,212     |  |  |                |   |  |                   |  |  |                | 

|8. | ACCRUED LIABILITIES
|-- | -------------------

| |                            |   | At March 31, |  |   | At September 30, | 
| | -------------------------- | - | ------------ |  | - | ---------------- | 
| |                            |   | 2009         |  |   | 2008             | 
| | Regular operating expenses | $ | 1,007,227    |  | $ | 447,925          | 
| | Aliceb Kramer              |   | -            |  |   | 200,059          | 
| | Inter Pacific Capital Ltd  |   | 110,703      |  |   | -                | 
| | Income taxes               |   | 28,411       |  |   | 40,799           | 
| | Business taxes             |   | 14,940       |  |   | 14,686           | 
| |                            | $ | 1,161,281    |  | $ | 703,469          | 

|9. | CONVERTIBLE PREFERRED STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | From June 30, 2005 to September 30, 2007, the UPMG
      entered into a continuous securities subscription agreement with private
      investors for the sale of UPMG Convertible Preferred Stock. UPMG issued a
      total of 4,605 shares of Convertible Preferred Stock at a subscription
      price of $2,500 per shares for aggregate net proceeds of $10,225,269,
      after accounting for issuance costs and professional fees. The shares bear
      an 8% per annum preferred dividend payable semi-annually. The terms of the
      subscription agreement call for a conversion ratio of one Convertible
      Preferred Stock to one common share of UPMG, which in turn can be
      exchanged for 2,000 shares of the Company. The shares of Convertible
      Preferred Stock have no voting rights. Under the subscription agreement,
      mandatory conversion of the shares would be triggered by UPMG listing its
      shares in a public market. Should no public listing occur within three
      years (subject to extension under certain conditions), the Convertible
      Preferred Stock would be mandatorily redeemable at a price of $2,500 per
      share plus a premium of 2%. The Company believes the conversion feature of
      the Convertible Preferred Stock is not a beneficial conversion feature. At
      the time of their issuance, the UPMG was not a publicly traded
      corporation.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On December 4, 2007, the Board of Directors of the UPMG
      resolved and notified the holders of the Convertible Preferred Stock that
      UPMG intended to force conversion of all the shares into common shares
      because the Company was to subsequently undertake a reverse merger
      transaction, which would transform the company into a public
    company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In December 2007, UPMG agreed to issue an additional 459
      of Convertible Preferred Stock in lieu of paying out dividends in cash,
      which UPMG had accrued under dividends payable. The additional 459 shares
      of Convertible Preferred Stock were equivalent to $1,060,086 of
      dividends.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | From February to June 30, 2008, 4,304 shares of
      Convertible Preferred Stock were converted to 4,304 shares
  of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

12

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

|    | UPMG common stock. The outstanding number of shares of
      Convertible Preferred Stock at June 30, 2008 was 760. The converted shares
      were subsequently exchanged for shares in the Company pursuant to the
      share exchange agreement detailed Note 12. Of the 760 shares that were
      outstanding at June 30, 2008, 160 shares were subsequently converted to
      UPMG shares on July 11, 2008, and then in turn exchanged for shares in the
      Company. Since the Company accounted for the share exchange transaction as
      a recapitalization transaction, the equity of the Company has been
      retroactively restated to the first period presented. The shares that had
      been converted at June 30, 2008 have been included in the Companys common
      stock. The remaining 760 shares of convertible preferred stock at June 30,
      2008 have been accounted for as a current liability because during the
      three months ended June 30, 2008, the Company re-examined the
      characteristics of the Convertible Preferred Stock. The Company concluded
      the mandatory redemption feature, liquidation preference to common
      stockholders, and cumulative dividends were characteristics akin to
      liabilities. The Company has booked the redemption premium as interest
      expenses for the period.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The Company is currently in arbitration with the holders
      of the remaining 600 shares of Convertible Preferred Stock over the
      Companys intension to force conversion of their shares into common
      shares. The Company has retained counsel to represent it in
      arbitration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The related outstanding dividends payable for the
      Convertible Preferred Stock at March 31, 2009 and September 30, 2008 were
      $19,914 and $24,884.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | In accordance with the relevant tax laws and regulations
      of Hong Kong, the corporate income tax rate applicable to the subsidiaries
      of the Company in Hong Kong is 17.5% of taxable income. On March 16, 2007,
      the National Peoples Congress of China approved the Corporate Income Tax
      Law of the Peoples Republic of China (the New CIT Law), effective from
      January 1, 2008. Under the New CIT Law, the corporate income tax rate
      applicable to the subsidiaries of the Company in the PRC starting from
      January 1, 2008 is 25%, replacing the currently applicable tax rate of
      33%. The New CIT Law has an impact on the deferred tax assets and
      liabilities of the Company. Effects arising from the enforcement of New
      CIT law have been reflected into the accounts by applying the new tax
      rate. The Company was not liable for U.S. Income Tax at March 31,
      2009since the Company continued to incur net operating losses during this
      quarter and prior years.                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|11. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The extension of the loan agreement with Inno-Tech
      Holding Ltimited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | On April 29, 2009, Inno-Tech Holdings Limited
      (Innotech), a shareholder of CHCC, extended the repayment dates of the
      Loan Agreement as table below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| | Date of Loan     |  | Loan Principal |  |  | Loan Principal |   |  | Original          |  |  | New            | 
| | ---------------- |  | -------------- |  |  | -------------- | - |  | ----------------- |  |  | -------------- | 
| | Agreement        |  | Amount (USD)   |  |  | Amount (HKFD)  |   |  | Repayment Date    |  |  | Repayment Date | 
| | June 20, 2007    |  | 772,777        |  |  | (HK$6,000,000  | ) |  | December 22, 2008 |  |  | June 22, 2009  | 
| | January 10, 2008 |  | 384,615        |  |  | (HK$3,000,000  | ) |  | July 9, 2009      |  |  | July 9, 2009   | 
| | January 25, 2008 |  | 512,820        |  |  | (HK$4,000,000  | ) |  | July 24, 2009     |  |  | July 24, 2009  | 
| |                  |  | $1,670,212     |  |  |                |   |  |                   |  |  |                | 

13

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

|12. | STOCK COMPENSATION EXPENSE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | During the six months ended March 31, 2009, the UPMG
      issued 4,203 shares of its common stock as compensation. The 4,203 shares
      of UPMG were equivalent to 8,406,000 shares of the Companys common stock.
      The value of the common stock was $8,117,587, or $1,428 on per share basis
      of UPMG common stock or equivalent to $0.9657 per share of the Companys
      common stock. The valuation of these shares was determined by using the
      same price that other UPMG stockholders bought their common stock. As
      result of the lack of secondary market at time of issuance of UPMGs
      common stock as compensation, the Company believes that the use of a price
      that other investors had paid was a reasonable fair market
value.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The company including any of its subsidiaries did not
      grant options or rights and issue shares at any time to create any of such
      outstanding as of March 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

14

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

|13. | EARNINGS PER SHARE                                                       
|--- | -------------------------------------------------------------------------
|    |                                                                          
|    | Components of basic and diluted earnings per share were
      as follows:

| |                                           |   | Three months |   |   | Three months |   |   | Six months |   |   | Six months |  
| | ----------------------------------------- | - | ------------ | - | - | ------------ | - | - | ---------- | - | - | ---------- | -
| |                                           |   | ended        |   |   | ended        |   |   | ended      |   |   | ended      |  
| |                                           |   | March 31,    |   |   | March 31,    |   |   | March 31,  |   |   | March 31,  |  
| |                                           |   | 2009         |   |   | 2008         |   |   | 2009       |   |   | 2008       |  
| | Earning (Loss) from continuing operations |   | (732,841     | ) |   | (1,242,734   | ) |   | (1,138,420 | ) |   | (1,413,503 | )
| | Net income                                |   | (713,748     | ) |   | (1,327,026   | ) |   | (1,056,770 | ) |   | (1,740,027 | )
| | Original shares                           |   | 50,148,000   |   |   | 39,314,000   |   |   | 50,148,000 |   |   | 39,314,000 |  
| |  Addition to common stock from issuance  |   | -            |   |   | 3,663,165    |   |   | -          |   |   | 1,876,809  |  
| | Basic weighted average shares outstanding |   | 50,148,000   |   |   | 42,977,165   |   |   | 50,148,000 |   |   | 41,190,809 |  
| |                                           |   |              |   |   |              |   |   |            |   |   |            |  
| | Dilutive Shares:                          |   |              |   |   |              |   |   |            |   |   |            |  
| |  Addition to common stock if preferred   |   |              |   |   |              |   |   |            |   |   |            |  
| | stock had been converted *                |   | -            |   |   | -            |   |   | -          |   |   | -          |  
| | Diluted Weighted Average Shares           |   |              |   |   |              |   |   |            |   |   |            |  
| | Outstanding:                              |   | 50,148,000   |   |   | 42,977,165   |   |   | 50,148,000 |   |   | 41,190,809 |  
| |                                           |   |              |   |   |              |   |   |            |   |   |            |  
| | Earnings (Loss) Per
      Share           |   |              |   |   |              |   |   |            |   |   |            |  
| |        basic                             | $ | (0.0142      | ) | $ | (0.0309      | ) | $ | (0.0211    | ) | $ | (0.0422    | )
| |        diluted                           | $ | (0.0142      | ) | $ | (0.0309      | ) | $ | (0.0211    | ) | $ | (0.0422    | )
| | Weighted average shares outstanding       |   |              |   |   |              |   |   |            |   |   |            |  
| |        basic                             |   | 50,148,000   |   |   | 42,977,165   |   |   | 50,148,000 |   |   | 41,190,809 |  
| |        diluted                           |   | 50,148,000   |   |   | 42,977,165   |   |   | 50,148,000 |   |   | 41,190,809 |  
| |                                           |   |              |   |   |              |   |   |            |   |   |            |  
| | Supplemental Data                         |   |              |   |   |              |   |   |            |   |   |            |  
| | Earnings (loss) per share from continuing |   |              |   |   |              |   |   |            |   |   |            |  
| | operations                                | $ | (0.0146      | ) | $ | (0.0289      | ) | $ | (0.0227    | ) | $ | (0.0343    | )

* If the preferred stock had been
converted it would have been antidilutive, accordingly there was no potentially
dilutive effect from them.

15

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

|14. | DISCONTINUED
OPERATIONS
|--- | -----------------------

VIP Birthing CentersResults of Operationsfor the six months endedMarch 31, 2009Changsha
    
    
    Hangzhou
    
    
    Foshan
    
    
    Shanghai
    
    
    Guangzhou
    
    
    TotalRevenue
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    $
    -Cost of revenue
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Gross profit
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Selling expenses
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -General and administrative expenses
    
    2,943
    
    
    -
    
    
    58
    
    
    -
    
    
    -
    
    
    3,001Total operating expenses
    
    2,943
    
    
    -
    
    
    58
    
    
    -
    
    
    -
    
    
    3,001Other income
    
    -
    
    
    -
    
    
    92,124
    
    
    3,207
    
    
    -
    
    
    95,331Other expense
    
    -
    
    
    -
    
    
    (1,508
    )
    
    (9,172
    )
    
    -
    
    
    (10,680
    )Taxes
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Net income (loss)
    
    (2,943
    )
    
    -
    
    
    90,558
    
    
    (5,965
    )
    
    -
    
    $
    81,650VIP Birthing CentersResults of Operationsfor the six months endedMarch 31, 2008Changsha
    
    
    Hangzhou
    
    
    Foshan
    
    
    Shanghai
    
    
    Guangzhou
    
    
    TotalRevenue
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    $
    -Cost of revenue
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Gross profit
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Selling expenses
    
    -
    
    
    -
    
    
    44
    
    
    -
    
    
    -
    
    
    44General and administrative expenses
    
    2,569
    
    
    13
    
    
    26,792
    
    
    -
    
    
    -
    
    
    29,374Total operating expenses
    
    2,569
    
    
    13
    
    
    26,836
    
    
    -
    
    
    -
    
    
    29,418Other income
    
    -
    
    
    -
    
    
    -
    
    
    209
    
    
    -
    
    
    209Other expense
    
    (52
    )
    
    -
    
    
    (36
    )
    
    (297,227
    )
    
    -
    
    
    (297,315
    )Taxes
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Net income (loss)
    
    (2,621
    )
    
    (13
    )
    
    (26,872
    )
    
    (297,018
    )
    
    -
    
    $
    (326,524
    )


16

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

VIP Birthing CentersResults of Operationsfor the three months endedMarch 31, 2009Changsha
    
    
    Hangzhou
    
    
    Foshan
    
    
    Shanghai
    
    
    Guangzhou
    
    
    TotalRevenue
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    $
    -Cost of revenue
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Gross profit
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Selling expenses
    
    (220
    )
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (220
    )General and administrative expenses
    
    -
    
    
    -
    
    
    58
    
    
    -
    
    
    -
    
    
    58Total operating expenses
    
    (220
    )
    
    -
    
    
    58
    
    
    -
    
    
    -
    
    
    (162
    )Other income
    
    -
    
    
    -
    
    
    26,404
    
    
    3,207
    
    
    -
    
    
    29,611Other expense
    
    -
    
    
    -
    
    
    (1,508
    )
    
    (9,172
    )
    
    -
    
    
    (10,680
    )Taxes
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Net income (loss)
    
    (220
    )
    
    -
    
    
    24,838
    
    
    (5,965
    )
    
    -
    
    $
    19,093VIP Birthing CentersResults of Operationsfor the three months
      endedMarch 31, 2008Changsha
    
    
    Hangzhou
    
    
    Foshan
    
    
    Shanghai
    
    
    Guangzhou
    
    
    TotalRevenue
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    $
    -Cost of revenue
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Gross profit
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Selling expenses
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -General and administrative
      expenses
    
    (3
    )
    
    -
    
    
    302
    
    
    -
    
    
    -
    
    
    299Total operating expenses
    
    (3
    )
    
    -
    
    
    302
    
    
    -
    
    
    -
    
    
    299Other income
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Other expense
    
    -
    
    
    -
    
    
    -
    
    
    (83,992
    )
    
    -
    
    
    (83,992
    )Taxes
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Net income (loss)
    
    3
    
    
    -
    
    
    (302
    )
    
    (83,992
    )
    
    -
    
    $
    (84,291
    )


17

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

VIP Birthing CentersFinancial PositionAt September 30, 2008
    
    Changsha
    
    
    Hangzhou
    
    
    Foshan
    
    
    Shanghai
    
    
    Guangzhou
    
    
    TotalCurrent assetsAccounts receivable
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -Related party receivables
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Prepaid expenses
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Total current assets
    
    -
    
    
    -
    
    
    
    
    
    -
    
    
    -
    
    
    -Non-current assetsProperty and equipment,
      net
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Total assets
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Current liabilitiesAccounts payable
    
    2,401
    
    
    -
    
    
    60,713
    
    
    776,105
    
    
    -
    
    
    839,219Related party payable
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Accrued liabilities
    
    1,287
    
    
    772
    
    
    1,287
    
    
    12,960
    
    
    4,198
    
    
    20,504Total current liabilities
    
    3,688
    
    
    772
    
    
    62,000
    
    
    789,065
    
    
    4,198
    
    
    859,723Total liabilities
    
    3,688
    
    
    772
    
    
    62,000
    
    
    789,065
    
    
    4,198
    
    
    859,723Net assets
    $
    (3,688
    )
    $
    (772
    )
    $
    (62,000
    )
    $
    (789,065
    )
    $
    (4,198
    )
    $
    (859,723
    )VIP Birthing CentersFinancial PositionAt March 31, 2009
    
    Changsha
    
    
    Hangzhou
    
    
    Foshan
    
    
    Shanghai
    
    
    Guangzhou
    
    
    TotalCurrent assetsAccounts receivable
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Related party receivables
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Prepaid expenses
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Total current assets
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Non-current assetsProperty and equipment, net
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Total assets
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Current liabilitiesAccounts payable
    
    2,407
    
    
    -
    
    
    35,534
    
    
    880,919
    
    
    -
    
    
    918,860Related party payable
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Accrued liabilities
    
    1,290
    
    
    774
    
    
    1,290
    
    
    14,711
    
    
    4,209
    
    
    22,274Total current liabilities
    
    3,697
    
    
    774
    
    
    36,824
    
    
    895,630
    
    
    4,209
    
    
    941,134Total liabilities
    
    3,697
    
    
    774
    
    
    36,824
    
    
    895,630
    
    
    4,209
    
    
    941,134Net assets
    $
    (3,697
    )
    $
    (774
    )
    $
    (36,824
    )
    $
    (895,630
    )
    $
    (4,209
    )
    $
    (941,134
    )


19

---

China Health Care CorpNotes to Consolidated Financial Statements 
  At March 31, 2009 and September 30, 2008 
  and for the three months and six months ended March 31, 2009 and 2008 
  (Stated in US Dollars)

|15. | RISKS                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Doing Business in the PRC                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Companys operations are conducted in the Peoples
      Republic of China (the PRC). Accordingly, the Companys business,
      financial condition and results of operations may be influenced by the
      political, economic and legal environment in the PRC, and by the general
      state of the PRC economy.                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Concentrations                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | For the six months ended March 31, 2009, the Company
      derived its revenue from three VIP Birthing Centers. Each VIP Birthing
      Center unto itself can be considered single customers, and, as such, by
      virtue of there were only three centers, there was a concentration of risk
      in the Companys revenues. The following provides a table of each centers
      contribution by amount and percentage for the six months
  presented.

Percentage ContributionCenter
    
    
    Amount
    
    
    to Total RevenueXiamen
    
    $
    7,324
    
    
    4.50%Wuxi
    
    
    147,735
    
    
    90.83%Macau
    
    
    7,590
    
    
    4.67%$
    162,649
    
    
    100.00%


|16. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | A. Legal proceeding against IPMCHH                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Proactive Medicare Enterprise (HK) Limited, a subsidiary
      of UPMG, is a plaintiff of a legal proceeding regarding a civil claim
      against a hospital in the PRC namely, International Peace Maternity &
      Child Health Hospital of the China Welfare Institute (IPMCHH or the
      defendant) who refused to pay consultancy fees to PME-HK since April
      2005 which may aggregate to $2,890,000                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On April 10, 2007, Proactive Medicare Enterprise (HK)
      Limited (PME-HK) brought a civil action to the Shanghai No. 1
      Intermediate Peoples Court (the Shanghai Court) in the PRC against
      IPMCCH for breach of contract. A statement of claim from PME-HK was sent
      to the Shanghai Court for acceptance of review. The proposed claims
      regarding this civil action included: (i) To order IPMCHH to honor the
      co-operative agreement signed between PME-HK and IPMCHH on February 2,
      2004; (ii) To order IPMCHH to pay the consultant fee amounted $2,890,000
      (equivalent to RMB22,677,123) in arrears owed to PME-HK, and (iii) IPMCHH
      shall bear the cost of this action.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On April 12, 2007, the statement of claim was legally
      accepted and filed by the Shanghai Court (Notification of Acceptance:
      (2007) Hu Yi Zhong Min Wu (Shang) Chu Zi No. 93). On May 29, 2007, the
      first instance of the case was held to establish the case. On January 23,
      2008, the second instance of the case was held to further negotiate a
      mutually accepted settlement plan. Through the mediation of the Shanghai
      Court, PME-HK and IPMCHH, so far, have gone through several rounds of
      negotiation for a mutually agreed settlement amount in recent months but a
      final settlement amount has yet to be confirmed.                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The result of this claim cannot be predicted, and it is
      possible that the ultimate resolution of the matters, individually or in
      the aggregate, may have a material adverse effect on the Companys
      business (either in the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

20

---

China Health Care CorpNotes to Consolidated
Financial Statements At March 31, 2009 and September 30, 2008 and for
the three months and six months ended March 31, 2009 and 2008 (Stated in US
Dollars)

near-term or in the long-term),
financial position, results of operations, or cash flows. Though the management
of the Company believes a portion of this claim may be recovered, the Company
has reasonably estimated the uncertain portion and has eliminated their revenue
contribution in 2007.

B. Contingent claims against other
three hospitals in the PRC

The Company has also engaged a law firm
in the PRC to negotiate with another two hospitals in the PRC, which are under
contract to pay the Company for the consultancy services provided to their
affiliated VIP Birthing Centers in Foshan and Changsha in the PRC. The proposed
claim in each case is about one million US dollars. The Company has gone through
several rounds of negotiation for an agreed settlement amount in recent months
and a final settlement amount has yet to be confirmed. During the quarter ended
December 31, 2008, the Company received $65,720 payment of claim from VIP center
in Foshan.

For the Hangzhou Center, the Company is
identifying a suitable PRC lawyer to negotiate with its host hospital for a
mutually accepted settlement plan.

C. Contingent relationship with JHI

The Company is currently in dispute
with JHI mainly on the fee structure, outstanding fee owing to JHI and use of
JHI brand in future, and we are actively negotiating with JHI for settlement.
As indicated in an email from JHI dated April 22, 2008, the Company believes
that JHI is willing to provide limited support depending on JHIs receiving
advance payment for any services requested. The Company also believes that JHI
is willing to proceed with settlement negotiations with the Company as long as
the Company commits to pay a lump sum of $300,000 as the settlement of
consulting services provided before. Given the positive attitude of JHI, the
Company believes the negotiation outcome would be positive and constructive. The
amount to be paid to JHI will ultimately be a liability of the Company, and the
Company has accrued the amount of $550,000 during the year ended September 30,
2006. This amount appears as Accrued Liabilities on the Companys balance sheet
at September 30, 2007 and 2006.

21

---

ITEM 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations

Forward-Looking Statements

This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States
Dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles. The following discussion should be read in
conjunction with our financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the forward
looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this
quarterly report, particularly in the section entitled "Risk Factors".

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "common
shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us" and
"our" refer to China Health Care Corporation and our subsidiaries, unless
otherwise indicated. All references to "common shares" refer to the common
shares in our capital stock.

Overview

We were incorporated in the state of Wyoming on February 11,
2005. From our incorporation to July 24, 2008, we had been in the business of
the exploration and development of a mineral property approximately 1,320 acres
in size in northeastern, Ontario. Our property was without known reserves and
our program was exploratory in nature. Because we were not successful in
implementing our business plan, we abandoned it and focused on the
identification of suitable businesses with which to enter into a business
opportunity or business combination.

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

Our fiscal year end is September 30.

On September 15, 2008, we engaged Samuel H. Wong & Co., LLP
as our principal independent accountant with the approval of our companys board
of directors. Accordingly we dismissed Cordovano and Honeck LLP on September 15,
2008.

On October 1, 2008, Mr. Henry J. Macfarland resigned as our
Chief Executive Officer. Mr. Macfarland will continue to act as our Senior Group
Advisor. As a result of Mr. Macfarlands resignation on October 1, 2008, we
appointed Mr. Siew Man Pang as our Chief Executive Officer.

1

---

As of the closing date of the share exchange agreement on July
24, 2008, we have contracts to provide consultancy services to a total of five
VIP Birthing Centers in the PRC and to manage a private hospital in Macau. These
centers are located in Wuxi (the Wuxi Center), Xiamen (the Xiamen Center),
Changsha (the Changsha Center), Foshan (the Foshan Center) and Hangzhou
(the Hangzhou Center).

On December 26, 2008, our common shares were delisted from the
Over The Counter Bulletin Board System (OTCBB) due to deficiencies in our
filings.

On February 1, 2009, Mr. Siew Man Pang resigned as our Chief
Executive Officer, Mr. Edwin Chan resigned as our Chief Financial Officer and
Mr. Kenneth Lee resigned as our Chief Operating Officer.

As a result of Mr. Pangs resignation, we appointed Mr. Faith
Lam as our Interim Chief Executive Officer and Interim Chief Financial Officer.
Before the new appointments, Mr. Lam was our Vice President (Accounting &
Procurement).

On February 10, 2009, our common shares resumed trading on the
Over The Counter Bulletin Board System (OTCBB).

Our future business will typically consist of three major
revenue drivers, namely, VIP Birthing Center, Satellite Health Center and
Specialty Hospital.

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

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

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

Results of Operations

Results of Operations for the Three-Month Period Ended March
31, 2009 as compared to the Three-Month Period Ended March 31, 2008.

|                |  | Three months ended |   |  | Increase (decrease) |  
|--------------- |  | ------------------ | - |  | ------------------- | -
|                |  | March 31,          |   |  |                     |  
|                |  | 2009               |   |  | 2008                |  
|                |  | ($)                |   |  | ($)                 |  
|                |  |                    |   |  |                     |  
|Revenue         |  | 55,484             |   |  | 88,122              |  
|Cost of revenue |  | (21,836            | ) |  | (58,283             | )
|Gross profit    |  | 33,648             |   |  | 29,839              |  

2

---

|                                          |  | Three months ended |   |  | Increase (decrease) |  
|----------------------------------------- |  | ------------------ | - |  | ------------------- | -
|                                          |  | March 31,          |   |  |                     |  
|                                          |  |                    |   |  |                     |  
|Selling expenses                          |  | (2,854             | ) |  | (30,975             | )
|General and administrative expenses       |  | (720,558           | ) |  | (1,057,129          | )
|Total other income (expenses)             |  | (43,094            | ) |  | (153,740            | )
|Provision for income tax                  |  | 0                  |   |  | (8,095              | )
|Non-controlling interest in net (income)  |  |                    |   |  |                     |  
|loss of Subsidiaries                      |  | (17                | ) |  | 22,634              |  
|Gain (loss) from discontinued operations, |  |                    |   |  |                     |  
|net of taxes                              |  | 19,093             |   |  | (84,291             | )
|Net loss attributable to parent common    |  |                    |   |  |                     |  
|Shareholders                              |  | (713,782           | ) |  | (1,281,757          | )

Revenue

Our companys revenues are derived from its share of operating
profit from VIP Birthing Centers at hospitals where it has invested in capital
equipment, leasehold improvements, and human capital in the form of technical
training for hospital staff. Our companys share of operating profit from the
VIP Birthing Centers depends upon the contractual terms with each hospital.
Financial statements are provided by the hospitals each month to our company for
review, verification, and approval. When the financial statements of the VIP
Birthing Centers have been approved, our company recognizes revenue by recording
its portion of the total operating profit to its financial statements. Revenues
that have been both recognized in accordance to their respective contracts and
financial statements provided by the hospitals can be reasonably expected to be
collectible.

Revenue for the three-month period ended March 31, 2009 was
$55,484. Revenue for the three-month period ended March 31, 2008 was $88,122.
The decrease in revenue of $32,638 for the three-month period ended March 31,
2009 was primarily due to the sudden drop of revenue from Xiamen center and
according to the Co-operative Agreement, the share of operating profit in Wuxi
center was decreased from 80% to 50%.

Cost of Revenue

Cost of revenue is primarily comprised of depreciation, wages,
and licensing fees that must be paid to JHI for facilities with continuing
operation. We believe that the depreciation of property and equipment matches
the substantial initial investment equipment and leasehold improvements with
revenues that are earned overtime. We charge wages paid to doctors and medical
personnel who provide the initial training and hospital management expertise to
the hospital when the VIP Birthing centers are initially setup and on a
non-fixed on-going basis. Cost of revenue for the three-month period ended March
31, 2009 was $21,836 whilst cost of revenue for the three-month period ended
March 31, 2008 was $58,283.

Selling Expenses

Selling expenses are comprised of client entertainment,
commissions and salaries for sales personnel, marketing, and travel and lodging
expenses. Selling expenses for the three-month period ended March 31, 2009 was
$2,854 whilst selling expenses for the three-month period ended March 31, 2008
was $30,975. The decrease in selling expenses of $28,121 for the three-month
period ended March 31, 2009 as compared to 2008 was primarily due to decrease in
business trip expenses and a special bonus paid to Wuxi center medical
personnel.

General and Administrative Expenses

General and administrative expenses include outside consulting
services, research & development, executive compensation, quality control,
and general overhead such as finance and administrative staff, and depreciation
expense. General and administrative expenses for the three-month period ended
March 31, 2009 was $720,558. General and administrative expenses for the
three-month period ended March 31, 2008 was $1,057,129. The decrease in general
and administrative expenses of $336,571 for the three-month period ended March
31, 2009 as compared to 2008 was primarily due to the absence of professional
fees for listing process and the decrease in consultancy service fee paid.

3

---

Other Income (Expenses)

The increase in other income of $137,009 for the three-month
period ended March 31, 2009 as compared to 2008 was primarily due to an exchange
adjustment on Shanghai center in 2008.

Income Tax

We account for income tax using an asset and liability approach
and allow for recognition of deferred 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 future realization is uncertain. In accordance
with the relevant tax laws and regulations of Hong Kong, the Corporate Income
Tax (CIT) rate applicable to our subsidiaries in Hong Kong is 16.5% of taxable
income. On March 16, 2007, the National Peoples Congress of China approved the
Corporate Income Tax Law of the Peoples Republic of China (the new CIT Law),
effective from January 1, 2008. Under the new CIT Law, the corporate income tax
rate applicable to our subsidiaries in the PRC starting from January 1, 2008
will be 25%, replacing the currently applicable tax rate of 33%. There was no
income tax expense or benefit for the three-month period ended March 31, 2009.
Income tax expense for the three-month period ended March 31, 2008 was $8,095.

Non-controlling Interest

Non-controlling interest income of $17 was recorded for the for
the three months ended March 31, 2009 whilst the non-controlling interest
recorded a loss of $22,634 for the three months ended March 31, 2008. The
increase in non-controlling interest of $22,651 for the three months ended March
31, 2009 was primarily due to a shared loss of Subsidiaries.

Net Loss Attributable to Parent Common Shareholders

For the three-month period ended March 31, 2009, we incurred a
net loss attributable to parent common shareholders of $713,782. The loss was
primarily due to the general and administrative expenses incurred for the public
company expenses and the consultancy service fees. For the three-month period
ended March 31, 2008, the Company incurred a loss of $1,281,757. The loss was
primarily due to the professional fees for listing process.

Results of Operations for the Six-Month Period Ended March
31, 2009 as compared to the Six-Month Period Ended March 31, 2008.

|                                          |  | Six months ended |   |  | Increase (decrease) |  
|----------------------------------------- |  | ---------------- | - |  | ------------------- | -
|                                          |  | March 31,        |   |  |                     |  
|                                          |  | 2009             |   |  | 2008                |  
|                                          |  | ($)              |   |  | ($)                 |  
|                                          |  |                  |   |  |                     |  
|Revenue                                   |  | 162,649          |   |  | 235,171             |  
|Cost of revenue                           |  | (63,092          | ) |  | (95,416             | )
|Gross profit                              |  | 99,557           |   |  | 139,755             |  
|                                          |  |                  |   |  |                     |  
|Selling expenses                          |  | (20,707          | ) |  | (88,895             | )
|General and administrative expenses       |  | (1,165,420       | ) |  | (1,305,002          | )
|Total other income (expenses)             |  | (51,867          | ) |  | (151,266            | )
|Provision for income tax                  |  | 0                |   |  | (8,095              | )
|Non-controlling interest in net (income)  |  |                  |   |  |                     |  
|loss of Subsidiaries                      |  | (17              | ) |  | 0                   |  
|Gain (loss) from discontinued operations, |  |                  |   |  |                     |  
|net of taxes                              |  | 81,650           |   |  | (326,524            | )
|Net loss attributable to parent common    |  |                  |   |  |                     |  
|shareholders                              |  | (1,056,804       | ) |  | (1,740,027          | )

4

---

Revenue

Our companys revenues are derived from its share of operating
profit from VIP Birthing Centers at hospitals where it has invested in capital
equipment, leasehold improvements, and human capital in the form of technical
training for hospital staff. Our companys share of operating profit from the
VIP Birthing Centers depends upon the contractual terms with each hospital.
Financial statements are provided by the hospitals each month to our company for
review, verification, and approval. When the financial statements of the VIP
Birthing Centers have been approved, our company recognizes revenue by recording
its portion of the total operating profit to its financial statements. Revenues
that have been both recognized in accordance to their respective contracts and
financial statements provided by the hospitals can be reasonably expected to be
collectible.

Revenue for the six-month period ended March 31, 2009 was
$162,649. Revenue for the six-month period ended March 31, 2008 was $235,171.
The decrease in revenue of $72,522 for the six-month period ended March 31, 2009
was primarily due to the sudden drop of revenue from Xiamen center and according
to the Co-operative Agreement, the share of operating profit in Wuxi center was
decreased from 80% to 50%.

Cost of Revenue

Cost of revenue is primarily comprised of depreciation, wages,
and licensing fees that must be paid to JHI for facilities with continuing
operation. We believe that the depreciation of property and equipment matches
the substantial initial investment equipment and leasehold improvements with
revenues that are earned overtime. We charge wages paid to doctors and medical
personnel who provide the initial training and hospital management expertise to
the hospital when the VIP Birthing centers are initially setup and on a
non-fixed on-going basis. Cost of revenue for the six-month period ended March
31, 2009 was $63,092 whilst cost of revenue for the six-month period ended March
31, 2008 was $95,416.

Selling Expenses

Selling expenses are comprised of client entertainment,
commissions and salaries for sales personnel, marketing, and travel and lodging
expenses. Selling expenses for the six-month period ended March 31, 2009 was
$20,707 whilst selling expenses for the six-month period ended March 31, 2008
was $88,895. The decrease in selling expenses of $68,188 for the six-month
period ended March 31, 2009 as compared to 2008 was primarily due to decrease in
business trip expenses and a special bonus paid to Wuxi center medical
personnel.

General and Administrative Expenses

General and administrative expenses include outside consulting
services, research & development, executive compensation, quality control,
and general overhead such as finance and administrative staff, and depreciation
expense. General and administrative expenses for the six-month period ended
March 31, 2009 was $1,165,420. General and administrative expenses for the
six-month period ended March 31, 2008 was $1,305,002. The decrease in general
and administrative expenses of $139,582 for the six-month period ended March 31,
2009 as compared to 2008 was primarily due to the absence of professional fees
for listing process and the decrease in consultancy service fee paid.

Other Income (Expenses)

The interest expenses under this category principally referred
to dividend expenses paid to Convertible Preference Shares (CPS) holders and
the loan interests paid to Innotech. During the period from June 30, 2005 to
March 10, 2008, we issued a total of 4,605 Convertible Preference Shares at a
subscription price of $2,500 per share to a number of investors. The CPS bear an
annual coupon rate of 8%, semi-annually in terms of either cash or the common
shares of UPMG, with a maturity period of 3 years, allowing for an extension of
1 year. The CPS bear no voting right and each CPS will be converted to one
common share of UPMG upon its public listing. Subject to the public listing of
UPMG, the conversion is mandatory and must be completed 14 days before the
public listing of UPMG. The redemption price will be the subscription price plus
a 2% premium. There was no dividend expenses incurred for the six months ended
March 31, 2009 and we incurred dividend expenses of $148,324for the six
months ended March 31, 2008. No dividend expense for the six months ended March
31, 2009 was due to the conversion of some CPS to common shares and we have stopped
paying dividends to CPS holders since December 2007.

5

---

Income Tax

We account for income tax using an asset and liability approach
and allow for recognition of deferred 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 future realization is uncertain. In accordance
with the relevant tax laws and regulations of Hong Kong, the Corporate Income
Tax (CIT) rate applicable to our subsidiaries in Hong Kong is 16.5% of taxable
income. On March 16, 2007, the National Peoples Congress of China approved the
Corporate Income Tax Law of the Peoples Republic of China (the new CIT Law),
effective from January 1, 2008. Under the new CIT Law, the corporate income tax
rate applicable to our subsidiaries in the PRC starting from January 1, 2008
will be 25%, replacing the currently applicable tax rate of 33%. There was no
income tax expense or benefit for the six-month period ended March 31, 2009.
Income tax expense for the six-month period ended March 31, 2008 was $8,095.

Non-controlling Interest

Non-controlling interest recorded an income of $17 for the six
months ended March 31, 2009 whilst no non-controlling interest was recorded for
the six months ended March 31, 2008. The increase in non-controlling interest of
$17 for the six months ended March 31, 2009 was primarily due to there was a
shared loss of Subsidiaries.

Net Loss Attributable to Parent Common Shareholders

For the six-month period ended March 31, 2009, we incurred a
net loss attributable to common shareholders of $1,056,804. The loss was
primarily due to the general and administrative expenses incurred for the public
company expenses and the consultancy service fees. For the six-month period
ended March 31, 2008, the Company incurred a loss of $1,740,027. The loss was
primarily due to the professional fees for listing process.

Liquidity and Capital Resources

As of March 31, 2009, our total assets were $1,068,474 and our
total liabilities were $6,942,823 and we had a working capital deficit of
$5,796,258. Our financial statements report a net loss of $713,765 for the
quarter ended March 31, 2009, and a net loss of $27,372,402 for the period from
inception to March 31, 2009.

During the six month periods ended March 31, 2009 and 2008, we
financed our operation mainly through cash generated from our operations and the
loans from our directors. Cash from operations is only enough to fund our onsite
personnel. The loans from our directors has providing the funding for our
investment in capital expenditures, and the cost of medical and management
expertise that are heavily involved in the early stages of building out the VIP
Birthing Centers and training of the personnel that staff those VIP Birthing
Centers.

We expect that with the expansion into new markets and
development of our business model, we can gain economies scale on our heavy
investment medical and hospital management experts. Related parties and
directors have also provided the working capital during the most recent
operating periods in order to maintain the business a going concern. We are
actively seeking external financing to strengthen our financial position.

As of the date of this report, we have not experienced any
difficulty in equity financing, and we have not experienced any liquidity
problems in settling our payables in the normal course of business.

6

---

The following table sets forth the summary of the Companys
cash flows for the periods indicated:

|                                                                   |  | Six Months            |  
|------------------------------------------------------------------ |  | --------------------- | -
|                                                                   |  | Ended
      March 31, |  
|                                                                   |  | 2009                  |  
|                                                                   |  |                       |  
|Net cash provided (used) in operating activities                   |  | 18,311                |  
|                                                                   |  |                       |  
|Net cash used in investing activities                              |  | (7,866                | )
|                                                                   |  |                       |  
|Net cash used by financing activities                              |  | 0                     |  
|                                                                   |  |                       |  
|Net increase (decrease) in cash and cash equivalents               |  | 10,445                |  
|                                                                   |  |                       |  
|Cash and cash equivalents, beginning of period                     |  | 229,567               |  
|                                                                   |  |                       |  
|Effect of exchange rate changes on cash and
      cash equivalents |  | (199,941              | )
|                                                                   |  |                       |  
|Cash and cash equivalents, at end of period                        |  | 40,071                |  

Our cash requirement is mainly for daily working capital. As at
March 31, 2009, we had $40,071 in cash and cash equivalents and a working
capital deficiency of $5,796,258, compared to $16,135 in cash and cash
equivalents and a working capital deficiency of $8,118,223 as of March 31, 2008.

Cash Flows from Operating Activities

For the six months ended March 31, 2009, our operating
activities provided cash of $18,311. For the six months ended March 31, 2008,
our operating activities used cash of $474,030. The increase in cash provided in
operating activities of $492,341 for the six months ended March 31, 2009 was
primarily due to the absence of the professional fees for listing process in
2009.

Cash Flows from Investing Activities

For the six months ended March 31, 2009, our investing
activities used cash of $7,866. For the six months ended March 31, 2008, our
investing activities used cash of $8,985. The decrease in cash used in investing
activities of $1,119 for the six months ended March 31, 2009 was primarily due
to a decrease in purchasing office equipment.

Cash Flows from Financing Activities

For the six months ended March 31, 2009 and 2008, our financing
activities did not generate any cash.

Capital Expenditures

During the six months ended March 31, 2009, we incurred capital
expenditures of $7,181. The capital expenditure principally consisted of medical
equipment and facilities, office equipment and leasehold improvement. During the
six months ended March 31, 2008, we incurred capital expenditures of $8,985.
Depending on the availability of equity financing, over the next twelve months,
we expect to spend about $5,000,000 on capital expenditures, mainly for purchase
of medical equipment, facilities and operating licenses and center renovation in
the future acquisition of specialty hospitals, health centers and VIP birthing
centers in the PRC.

Going Concern

The accompanying consolidated financial statements have been
prepared assuming that our company will continue as a going concern. We had a
net loss of $1,056,804 and a positive cash flow from operations of $18,311 for
the six month period ended March 31, 2009 and a working capital deficiency of
$5,796,258, and a shareholders deficit of $5,874,349 at March 31, 2009. These
matters raise substantial doubt about our companys ability to continue as a
going concern if we do not secure new outside financing. We are currently and
continue to make efforts to procure outside financing to strengthen its
financial position.

7

---

Off-Balance Sheet Arrangements

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

Application of Critical Accounting Policies

| | (a) | Method of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | The Company maintains its general ledger and journals
      with the accrual method of accounting for financial reporting purposes.
      The financial statements and notes are representations of management.
      Accounting policies adopted by the Company conform to generally accepted
      accounting principles in the United States of America and have been
      consistently applied in the presentation of financial statements, which
      are compiled on the accrual basis of accounting.                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Inter-company transactions, such as due to/due from
      balances, investment in subsidiaries, and subsidiaries capitalization
      have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (c) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | In preparing the financial statements in conformity with
      accounting principles generally accepted in the United States of America,
      management makes estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosures of contingent assets and
      liabilities at the dates of the financial statements, as well as the
      reported amounts of revenues and expenses during the reporting years.
      These estimates and assumptions include, but are not limited to, the
      valuation of accounts receivable, inventories, deferred income taxes and
      the estimation of useful lives of property, plant, and equipment. Actual
      results could differ from these estimates.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (d) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | The Company considers all cash and other highly liquid
      investments with initial maturities of three months or less to be cash
      equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (e) | Accounts Receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Accounts receivables are recognized and carried at the
      original invoice amount less allowance for any uncollectible amounts.
      Management regularly reviews the Companys outstanding receivables
      balance, and will provide allowance for doubtful accounts based on its
      assessment. Bad debts are charged against allowances when outstanding
      receivables have been determined to be uncollectible. See Note 3 
      Accounts Receivable.                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (f) | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Property and equipment are stated at cost less
      accumulated depreciation and any impairment write-downs related to assets
      held and used. Additions and improvements to equipment are capitalized at
      cost. Expenditures for maintenance and repairs are charged to expense as
      incurred. Depreciation of equipment is provided over their estimated
      useful lives, using the straight-line method. Estimated useful lives of
      the equipment are as follows:                                                                                                                                                                                                                                                          

Software
    5 yearsCenter equipment
    5 yearsOffice equipment
    5 yearsFurniture and fixtures
    5 yearsLeasehold improvement
    5 - 10 yearsMachinery
    5 years


8

---

| |     | The cost and related accumulated depreciation of assets
      sold or otherwise retired are eliminated from the accounts and any gain or
      loss is included in the statement of income. The cost of maintenance and
      repairs is charged to the statement of operations as incurred, whereas
      significant renewals and betterments are capitalized. See Note 6
      Equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (g) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Companys revenues are derived from its share of
      operating profit from VIP Birthing Centers at hospitals where it has
      invested in capital equipment, leasehold improvements, and human capital
      in the form of technical training for hospital staff. The Companys share
      of operating profit from the VIP Birthing Centers depends upon the
      contractual terms with each hospital. The typical share of operating
      profit ranges between 70% and 80% of the total operating profit of the VIP
      Birthing Center. Financial statements are provided by the hospitals each
      month to the Company for review, verification, and approval. When the
      financial statements of the VIP Birthing Centers have been approved, the
      Company recognizes revenue by recording its portion of the total operating
      profit to its financial statements. Revenues that have been both
      recognized in accordance to their respective contracts and financial
      statements provided by the hospitals can be reasonably expected to be
      collectible.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (h) | Cost of Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | Cost of revenue is primarily comprised of depreciation,
      wages, and licensing fees that must be paid to JHI for facilities with
      continuing operation. The Company believes that the depreciation of
      property and equipment matches the substantial initial investment
      equipment and leasehold improvements with revenues that are earned
      overtime. The Company charges wages paid to doctors and medical personnel
      who provide the initial training and hospital management expertise to the
      hospital when the VIP Birthing centers are initially setup and on a
      non-fixed on-going basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (i) | Selling Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | Selling expenses are comprised of client entertainment,
      commissions and salaries for sales personnel, marketing, and travel and
      lodging expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (j) | General & Administrative Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | General and administrative expenses include outside
      consulting services, research & development, executive compensation,
      quality control, and general overhead such as finance and administrative
      staff, and depreciation expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Company uses the accrual method of accounting to
      determine and report its taxable income for the year. The Company has
      implemented Statement of Financial Accounting Standards (SFAS) No. 109,
      Accounting for Income Taxes. The Company also adopted FIN 48, Accounting
      for Uncertainty in Tax Positions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | Income tax liabilities computed according to the United
      States, Peoples Republic of China (PRC), Hong Kong SAR and Macau SAR laws
      are provided for the tax effects of transactions reported in the financial
      statements and consists of taxes currently due plus deferred taxes related
      primarily to differences between the basis of fixed assets and intangible
      assets for financial and tax reporting. The deferred tax assets and
      liabilities represent the future tax return consequences of those
      differences, which will be taxable or deductible when the assets and
      liabilities are recovered of settled. Deferred taxes also are recognized
      for operating losses that are available to offset future income taxes. A
      valuation allowance is created to evaluate deferred tax assets if it is
      more likely than not that these items will either expire before
  the                                                                                                                                                                

9

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| |     | Company is able to realize that tax benefit, or that
      future realization is uncertain.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (l) | Earnings (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Company computers earnings per share (EPS) in
      accordance with Statement of Financial Accounting Standards No. 128,
      Earnings per Share (SFAS NO. 128), and SEC Staff Accounting Bulletin
      No. 98 (SAB 98). SFAS No. 128 requires companies with complex capital
      structures to present basic and diluted EPS. Basic EPS is measured as the
      income or loss available to common shareholders divided by the weighted
      average common shares outstanding for the period. Diluted EPS is similar
      to basic EPS but presents the dilutive effect on a per share basis of
      potential common shares (e.g., convertible securities, options, and
      warrants) as if they had been converted at the beginning of the periods
      presented, or issuance date, if later. Potential common shares that have
      an anti-dilutive effect (i.e., those that increase income per share or
      decrease loss per share) are excluded from the calculation of diluted
      EPS.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (m) | Other Comprehensive Income (Loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | Comprehensive income is defined to include all changes in
      equity except those resulting from investments by owners and distributions
      to owners. Among other disclosures, all items that are required to be
      recognized under current accounting standards as components of
      comprehensive income are required to be reported in a financial statement
      that is presented with the same prominence as other financial statements.
      The Companys current component of other comprehensive income is the
      foreign currency translation adjustment.                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (n) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The Company maintains its financial statements in the
      functional currency, which is the Renminbi (RMB). Monetary assets and
      liabilities denominated in currencies other than the functional currency
      are translated into the functional currency at rates of exchange
      prevailing at the balance sheet dates. Transactions denominated in
      currencies other than the functional currency are translated into the
      functional currency at the exchanges rates prevailing at the dates of the
      transaction. Exchange gains or losses arising from foreign currency
      transactions are included in the determination of net income for the
      respective periods.                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | For financial reporting purposes, the financial
      statements of the Company, which are prepared using the functional
      currency, have been translated into United States dollars. Assets and
      liabilities are translated at the exchange rates at the balance sheet
      dates and revenue and expenses are translated at the average exchange
      rates and stockholders equity is translated at historical exchange rates.
      Translation adjustments are not included in determining net income but are
      included in foreign exchange adjustment to other comprehensive income, a
      component of stockholders equity.                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | The accompanying consolidated financial statements are
      presented in United States dollars. The functional currency of the Company
      is Hong Kong dollars (HK$). Equity accounts of the consolidated
      financial statements are translated into United States dollars from HK$ at
      their historical exchange rates when the capital transactions occurred.
      Assets and liabilities are translated at the exchange rates as of balance
      sheet date. Income and expenditures are translated at the average exchange
      rate of the year. Translation adjustments are not included in determining
      net income but are included in foreign currency translation adjustment in
      other comprehensive income, a component of stockholders
  equity.                                                                                                                                                                                                                                       

| |                       | March 31, |  | September 30,
| | --------------------- | --------- |  | -------------
| |                       | 2009      |  | 2008         
| | HKD-USD Year End Rate | 7.75050   |  | 7.77010      
| | HKD-USD Average Rate  | 7.75469   |  | 7.79297      
| | RMB-USD Year End Rate | 6.84560   |  | 6.85510      
| | RMB-USD Average Rate  | 6.84994   |  | 7.11061      

10

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| | (o) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | In March 2008, the FASB issued SFAS No. 161, "Disclosures
      about Derivative Instruments and Hedging Activities, an amendment of FASB
      Statement No. 133" ("SFAS 161"). SFAS 161 applies to all derivative
      instruments and related hedged items accounted for under SFAS No. 133,
      "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
      133"). SFAS 161 requires entities to provide greater transparency about
      (a) how and why an entity uses derivative instruments, (b) how derivative
      instruments and related hedged items are accounted for under SFAS 133 and
      its related interpretations, and (c) how derivative instruments and
      related hedged items affect an entity's financial position, results of
      operations and cash flows. SFAS 161 is effective for financial statements
      issued for fiscal years and interim periods beginning after November 15,
      2008.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | In May 2008, the FASB issued SFAS No. 162, "The Hierarchy
      of Generally Accepted Accounting Principles" ("SFAS 162"). SFAS 162
      identifies the sources of accounting principles and the framework for
      selecting the principles used in the preparation of financial statements
      of nongovernmental entities that are presented in conformity with
      generally accepted accounting principles (the GAAP hierarchy).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Statement 162 will become effective 60 days following the
      SEC's approval of the Public Company Accounting Oversight Board amendments
      to AU Section 411, "The Meaning of Present Fairly in Conformity With
      Generally Accepted Accounting Principles."                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | In May 2008, the FASB issued FSP Accounting Principles
      Board ("APB") 14-1 "Accounting for Convertible Debt Instruments That May
      Be Settled in Cash upon Conversion (Including Partial Cash Settlement)"
      ("FSP APB 14-1"). FSP APB 14-1 requires the issuer of certain convertible
      debt instruments that may be settled in cash (or other assets) on
      conversion to separately account for the liability (debt) and equity
      (conversion option) components of the instrument in a manner that reflects
      the issuer's non- convertible debt borrowing rate. FSP APB 14-1 is
      effective for fiscal years beginning after December 15, 2008 on a
      retroactive basis.                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Our company is currently evaluating the potential impact,
      if any, of the adoption of the above recent accounting pronouncements on
      its consolidated results of operations and financial
  condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Contractual Obligations

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

ITEM 3. Quantitative and Qualitative Disclosures About
Market Risk

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

ITEM 4t. Controls and Procedures

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our chief executive
officer and our chief financial officer (who is acting as our principal
executive officer, principal financial officer and principle accounting officer)
to allow for timely decisions regarding required disclosure.

As of March 31, 2009, the end of our quarter covered by this
report, we carried out an evaluation, under the supervision and with the
participation of our chief executive officer and our chief financial officer
(who is acting as our principal executive officer, principal financial officer
and principle accounting officer), of the effectiveness of the design and
operation of our disclosure controls and procedures. Based on the foregoing, our
chief executive officer and our chief financial officer (who is acting as our
principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure
controls and procedures were effective as of the end of the period covered by
this quarterly report.

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Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during our quarter ended March 31, 2009 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

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

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

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

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

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

The results of these negotiations / claim cannot be predicted,
  and it is possible that the ultimate resolution of these matters, individually
  or in the aggregate, may have a material adverse effect on our business (either
  in the near-term or in the long-term), financial position, results of operations,
  or cash flows. Although our management believes a portion of our investment
  in these affiliated VIP Birthing Centers may be recovered, we have reasonably
  estimated the uncertain portion and have eliminated their revenue contribution
  in 2007.

ITEM 1A. Risk Factors

The following risk factors should be carefully considered in
evaluating our business because such factors may have a significant impact on
our business, operating results, liquidity and financial condition. As a result
of the risk factors set forth below, actual results could differ materially from
those projected in any forward-looking statements. Additional risks and
uncertainties not presently known to us, or that we currently consider to be
immaterial, may also impact our business, operating results, liquidity and
financial condition. If any such risks occur, our business, operating results, liquidity and financial condition could be
materially affected in an adverse manner. Under such circumstances, the trading
price of our securities could decline, and you may lose all or part of your
investment.

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Risks Related to our Business

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

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

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

Currently, we have limited operating capital. As of March 31,
2009, our cash available was approximately $16,135. In the foreseeable future,
we expect to incur significant expenses when developing our business. We may be
unable to locate sources of capital or may find that capital is not available on
terms that are acceptable to us to fund our additional expenses. There is the
possibility that we will run out of funds, and this may affect our operations
and thus our profitability. If we cannot obtain funds when needed, we may have
to cease our operations.

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

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

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

For the six month period ended March 31, 2009, our facilities
rested with our host hospitals in the Peoples Republic of China, or the PRC,
accounted for most of our total revenue. If our treatment facilities are
adversely affected by changes in regulatory and economic conditions within
China, our revenue and profitability may decline.

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

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

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

13

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

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

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

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

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

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

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

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

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

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

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

We rely on contractual arrangements with PRC obstetric and
gynecologic hospitals to operate our business. These contractual arrangements
may not be as effective in providing us with control over our operations as
direct ownership. Under the current contractual arrangements, if the PRC
obstetric and gynecologic hospitals fail to perform their respective obligations
under these contractual arrangements, we may have to incur substantial costs to
enforce such arrangements and rely on legal remedies available under PRC law,
which may not be effective to allow

14

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us to maintain our business operations. Additionally, many of
these contractual arrangements are governed by PRC law and, accordingly, will be
interpreted in accordance with PRC law, and any disputes would be resolved
according to PRC legal procedures. The legal environment in the PRC is not as
developed as in other jurisdictions, such as the United States. As a result,
uncertainties in the PRC legal system could limit our ability to enforce these
contractual arrangements. In the event we are unable to enforce these
contractual arrangements, we may not be able to exert effective control over our
operations, and our ability to conduct our business may be negatively
affected.

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

Risks Relating to the Peoples Republic of China

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

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

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

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

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

15

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

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

Risks Relating to Our Common Shares

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

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

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

Our share is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules; the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the shares
that are subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common shares.

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

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

16

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Trends, Risks and Uncertainties

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

ITEM 2. Unregistered Sales of Equity Securities

None.

ITEM 3. Default Upon Senior Securities

None.

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

On April 8, 2009, stockholders of our company were asked to
approve, at an annual meeting of stockholders, the election of Wong Yuen Yee,
Gerald Lau and Andrew B. Kramer as directors and the appointment of Samuel H.
Wong & Co., LLP as the independent auditors of our company.

Votes representing 13,283,300 shares voted (representing 9
shareholders of our company) in favor of the election of Wong Yuen Yee and
Gerald Lau as directors of our company and votes representing 144,000 voted
against (representing 1 shareholder of our company) the election of Wong Yuen
Yee and Gerald Lau as directors.

Votes representing 13,427,300 shares voted (representing 10
shareholders of our company) in favor of the election of Andrew B. Kramer as a
director. The approval of Mr. Kramer as a director was unanimous.

Votes representing 13,427,300 shares voted (representing 10
shareholders of our company) in favor of the appointment of Samuel H. Wong &
Co. LLP as the independent auditors of our company. The appointment of Samuel H.
Wong & Co. LLP as the independent auditors of our company was unanimous.

ITEM 5. Other Information

On December 26, 2008, our common shares were delisted from the
Over The Counter Bulletin Board System (OTCBB) due to deficiencies in our
filings. On February 10, 2009, our common shares resumed trading on the Over The
Counter Bulletin Board System (OTCBB).

On March 11, 2009, Mr. Wong Yao Wing resigned as our Director.
As a result of Mr. Wong Yao Wings resignation on March 11, 2009, we appointed
Mr. Gerald Lau as our Director.

ITEM 6. Exhibits.

Exhibits required by Item 601 of Regulation S-K

|Exhibit |                                                                                                                                                                                                                                                                                                                             
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                             
|(2)     | Plan of
      Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession                                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                             
|2.1     | Share Exchange Agreement dated January 20, 2008, among
      our company, United Premier Medical Group and the selling shareholders of
      United Premier Medical Group as set forth in the share exchange agreement
      (incorporated by reference from our Current Report on Form 8-K filed on
      January 28, 2008)

17

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|Exhibit |                                                                                                                                                                                                                                                                                                                                                
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                
|(3)     | Articles of Incorporation and By-laws                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                
|3.1     | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form SB-2 filed on July 29, 2005)                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                
|3.2     | Bylaws (incorporated by reference from our Registration
      Statement on Form SB-2 filed on July 29, 2005)                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                                
|(10)    | Material Contracts                                                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                
|10.1    | Option To Purchase And Royalty Agreement between The
      Cavalier Group and Larry Gervais of Timmins, Ontario, dated April 25, 2005
      to acquire a 100% interest in the Casa Claim Block, Porcupine Mining
      Division, Ontario.( incorporated by reference from our Registration
      Statement on Form SB-2 filed on July 29, 2005)
|        |                                                                                                                                                                                                                                                                                                                                                
|10.2    | Code Of Business Conduct & Ethics and Compliance
      Program (incorporated by reference from our Annual Report on Form 10-KSB
      filed on August 28, 2008)                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                
|10.3    | Educational and Consulting Services Agreement between JHI
      and PMEHK dated June 15, 2002. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                
|10.4    | Licensing Agreement between JHI and PMEHK dated June 15,
      2002. (incorporated by reference from our Current Report on Form 8-K filed
      on July 31, 2008)                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                
|10.5    | Novation and Assignment Agreement for Education and
      Consulting Services Agreement between PMEHK, PMEUS and JHI. (incorporated
      by reference from our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                
|10.6    | Novation and Assignment for Licensing Agreement between
      PMEHK, PMEUS and JHI dated April 11, 2003. (incorporated by reference from
      our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                
|10.7    | Amendment to Licensing Agreement between JHI and PMEUS
      dated August 8, 2003. (incorporated by reference from our Current Report
      on Form 8-K filed on July 31, 2008)                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                
|10.8    | Second Amendment to Licensing Agreement between JHI and
      PME dated June 10, 2004. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                
|10.9    | First Amendment to Educational And Consulting Services
      Agreement between JHI and PME dated June 10, 2004. (incorporated by
      reference from our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                                
|10.10   | Description of Co-operative Agreement between IPMCHH and
      UPMG (U.S.) Limited dated March 31, 2005. (incorporated by reference from
      our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                
|10.11   | Description of Co-operative Agreement between IPMCHH and
      PMEHK dated February 2, 2004. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                
|10.12   | Description of Co-operative Agreement between IPMCHH and
      PMEHK dated March 21, 2003. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                                
|10.13   | Description of Technical Exchange and Cooperative
      Agreement between Xiamen Maternity and Child Health Care Hospital and
      Proactive Medicare (Xiamen) Company Limited dated March 6, 2005.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)                                        
|        |                                                                                                                                                                                                                                                                                                                                                
|10.14   | Description of Co-operative Agreement between Jinan
      Maternity and China Care Hospital and Proactive Medicare Enterprise
      (Jinan) Limited dated February 5, 2004. (incorporated by reference from
      our Current Report on Form 8-K filed on July 31, 2008)                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                
|10.15   | Description of Co-operative Agreement between Beijing
      Obstetrics & Gynecology Hospital and Proactive Medicare (Beijing)
      Company Limited dated April 25, 2004. (incorporated by reference from our
      Current Report on Form 8-K filed on July 31, 2008)                                                                         

18

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|Exhibit |                                                                                                                                                                                                                                                                                                                                                                                                
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.16   | Co-operative Agreement between Foshan Maternal and
      Childrens Hospital and Proactive Medicare Services (Hong Kong) Limited
      dated February 27, 2004 (incorporated by reference from our Current Report
      on Form 8-K filed on July 31, 2008)                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.17   | Description of Supplemental Agreement to the Co-operative
      Agreement between Foshan Maternal and Childrens Hospital and Proactive
      Medicare Services (Hong Kong) Limited dated February 27, 2004
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.18   | Description of Co-operative Agreement betweenThe Second
      Affiliated Hospital of Guangzhou Medical College and UPMG (Guangdong)
      Company Limited dated November 18, 2003. (incorporated by reference from
      our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.19   | Description of Co-operative Agreement between Changsha
      Maternity and Child Hospital and Proactive Medicare (Changsha) Company
      Limited dated July 7, 2004. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.20   | Supplemental Agreement to the Co-operative Agreement
      between Changsha Maternity and Child Hospital and Proactive Medicare
      (Changsha) Company Limited dated July 7, 2004. (incorporated by reference
      from our Current Report on Form 8-K filed on July 31, 2008)                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.21   | Description of Co-operative Agreement between Wuxi
      Maternity and Children Hospital and Proactive Medicare (Wuxi) Company
      Limited dated April 19, 2004. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.22   | Description of Supplemental Agreement to the Co-operative
      Agreement between Wuxi Maternity and Children Hospital and Proactive
      Medicare (Wuxi) Company Limited dated April 19, 2004. (incorporated by
      reference from our Current Report on Form 8-K filed on July 31, 2008)                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.23   | Technical Exchange and Co-operative Agreement between
      Hangzhou Tin Mu Shan Hospital Limited and Proactive Medicare (Hangzhou)
      Company Limited dated August 20, 2005. (incorporated by reference from our
      Current Report on Form 8-K filed on July 31, 2008)                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.24   | Description of Technical Exchange and Co-operative
      Agreement between Proactive Medicare (Jiangsu) Company Limited and Jiangsu
      Province Women and Children Hygiene and Health Center/the Auxiliary Ward
      of the Jiangsu Province Peoples Hospital dated September 29, 2005.
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 31, 2008)
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.25   | Agreement between Data Pacific Medical Group Limited and
      UPMG (Hong Kong) Limited dated June 28, 2006. (incorporated by reference
      from our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.26   | Hospital Management, Hospital Services Development and
      Related Consulting Services Agreement between The University Hospital of
      Macau University of Science and Technology Foundation and UPMG (Macau)
      Limited dated October 1, 2006. (incorporated by reference from our Current
      Report on Form 8-K filed on July 31, 2008)                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.27   | Amendment Agreement to the Hospital Management, Hospital
      Services Development and Related Consulting Services Agreement between The
      University Hospital of Macau University of Science and Technology
      Foundation and UPMG (Macau) Limited dated June 27, 2007. (incorporated by
      reference from our Current Report on Form 8-K filed on July 31, 2008)                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.28   | Management Services Agreement between UPMG (Hong Kong)
      Limited and American-Sino Human Resources Consulting and Management
      (Shanghai) Ltd. Dated October 26, 2006. (incorporated by reference from
      our Current Report on Form 8-K filed on July 31, 2008)                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.29   | Services Agreement PMEHK and PMEUS dated March 28, 2004.
      (incorporated by reference from our C 8 fil d l 31 2008)                                                                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.30   | Project Consultancy Agreement between PMEHK and PMEUS
      dated March 28, 2004. (incorporated by reference from our Current Report
      on Form 8-K filed on July 31, 2008)                                                                                                                                                                                                                 

19

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|Exhibit |                                                                  
|------- | -----------------------------------------------------------------
|No.     | Description                                                      
|        |                                                                  
|(21)    | Subsidiaries of the Small Business
      Issuer                  
|        |                                                                  
|        | UPMG International Limited                                       
|        |                                                                  
|        | Proactive Medicare Enterprise (Hong Kong) Limited                
|        |                                                                  
|        | Proactive Medicare (Shenzhen) Company Limited                    
|        |                                                                  
|        | Proactive Medicare (Changsha) Company Limited                    
|        |                                                                  
|        | Proactive Medicare (Xiamen) Company
      Limited                
|        |                                                                  
|        | Proactive Medicare (Nanjing) Company Limited                     
|        |                                                                  
|        | Proactive Medicare (Hangzhou) Company Limited                    
|        |                                                                  
|        | Proactive Medicare (Wuxi) Company
      Limited                  
|        |                                                                  
|        | United Premier Medical Group (Shanghai) Limited                  
|        |                                                                  
|        | Proactive Medicare Services (Hong Kong) Limited                  
|        |                                                                  
|        | Proactive Medicare (Beijing) Company
      Limited               
|        |                                                                  
|        | UPMG (Hong Kong) Limited                                         
|        |                                                                  
|        | UPMG (US) Limited                                                
|        |                                                                  
|        | Guangzhou Inno-Proactive Medicare
      Consultancy Limited      
|        |                                                                  
|        | Shanghai Proactive Medicare Health
      Education Center Limited
|        |                                                                  
|        | UPMG (Shenzhen) Limited                                          
|        |                                                                  
|        | Broad Prosper Limited                                            
|        |                                                                  
|        | UPMG (Macau) Company Limited                                     
|        |                                                                  
|(31)    | Section 302 Certification                                        
|        |                                                                  
|31.1*   | Section
      302 Certification of Faith Lam                     
|        |                                                                  
|(32)    | Section 906 Certification                                        
|        |                                                                  
|32.1*   | Section
      906 Certification of Faith Lam                     

*filed herewith

20

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.



CHINA HEALTH CARE CORPORATION

By /s/ *Faith Lam*Faith Lam
Interim Chief Executive Officer, Interim Chief Financial Officer
Principal Executive Officer, Principal Financial Officer and Principal
Accounting Officer 
Date: May 20, 2009.



21

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