---

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 December 31, 2008

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 of February 16,
2009



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PART I  FINANCIAL INFORMATION

|ITEM 1. Financial Statements
|----------------------------



---

China Health Care Corp

Unaudited Financial Statements

December 31, 2008 and 2007

(Stated in US Dollars)

---

China Health Care Corp

|Contents                                                      | Pages     
|------------------------------------------------------------- | ----------
|Report of Registered Independent Public
      Accounting Firm | F-1       
|Consolidated Balance Sheets                                   | F-2 - F-3 
|Consolidated Statements of Operations                         | F-4       
|Consolidated Statements of Stockholders Equity               | F-6       
|Consolidated Statements of Cash Flows                         | F-7       
|Notes to the Financial Statements                             | F-8  F-25

---

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 December 31, 2008 and September 30, 2008, and the related interim consolidated statements of operations, changes in stockholders’ equity, and cash flows for the three-month periods ended December 31, 2008 and 2007.  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   
|------------------------------- | ----------------------------
|February 14, 2009               | Certified Public Accountants

---

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

|                                                                |  |         |   | At           |  |   | At            | 
|--------------------------------------------------------------- |  | ------- | - | ------------ |  | - | ------------- | 
|                                                                |  |         |   | December 31, |  |   | September 30, | 
|Assets                                                          |  | Note    |   | 2008         |  |   | 2008          | 
|                                                                |  |         |   | (unaudited)  |  |   |               | 
|Current assets                                                  |  |         |   |              |  |   |               | 
|Cash                                                            |  | 2 (d)   | $ | 61,284       |  | $ | 229,567       | 
|Accounts receivable                                             |  | 2 (e),3 |   | 131,339      |  |   | 193,050       | 
|Prepaid expenses                                                |  | 4       |   | 14,957       |  |   | 78,717        | 
|Total current assets                                            |  |         |   | 207,580      |  |   | 501,334       | 
|                                                                |  |         |   |              |  |   |               | 
|Non-current assets                                              |  |         |   |              |  |   |               | 
|Property and equipment                                          |  | 2 (f),5 |   | 777,092      |  |   | 842,710       | 
|Goodwill                                                        |  | 6       |   | 155,197      |  |   | 154,809       | 
|Rent and utility deposits                                       |  |         |   | 867          |  |   | 867           | 
|Total assets                                                    |  |         | $ | 1,140,736    |  | $ | 1,499,720     | 
|                                                                |  |         |   |              |  |   |               | 
|                                                                |  |         |   |              |  |   |               | 
|Liabilities and Stockholders Deficit                           |  |         |   |              |  |   |               | 
|                                                                |  |         |   |              |  |   |               | 
|Current liabilities                                             |  |         |   |              |  |   |               | 
|Accounts payable                                                |  |         |   | 568,594      |  |   | 570,894       | 
|Dividends payable                                               |  |         |   | 19,914       |  |   | 24,884        | 
|Related party payables                                          |  | 7       |   | 2,579,958    |  |   | 2,510,978     | 
|Accrued liabilities                                             |  | 8       |   | 511,288      |  |   | 703,469       | 
|Convertible preferred stock - $0 par value,
      10,000 shares |  |         |   |              |  |   |               | 
|authorized; 600 and 4,605 shares issued and outstanding at      |  |         |   |              |  |   |               | 
|December 31, 2008, and September 30, 2008,
      respectively   |  | 9       |   | 1,503,226    |  |   | 1,503,226     | 
|Total current liabilities                                       |  |         |   | 5,182,980    |  |   | 5,313,451     | 
|                                                                |  |         |   |              |  |   |               | 
|                                                                |  |         |   |              |  |   |               | 
|Liabilities of discontinued
      operations                    |  |         |   |              |  |   |               | 
|Accounts payable                                                |  |         |   | 917,754      |  |   | 839,219       | 
|Accrued liabilities                                             |  | 14      |   | 22,539       |  |   | 20,504        | 
|                                                                |  |         |   | 940,293      |  |   | 859,723       | 
|                                                                |  |         |   |              |  |   |               | 
|Total liabilities                                               |  |         | $ | 6,123,273    |  | $ | 6,173,173     | 

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

F-2

---

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

|                                                              |  |      |  |   | At           |   |   | At            |  
|------------------------------------------------------------- |  | ---- |  | - | ------------ | - | - | ------------- | -
|                                                              |  |      |  |   | December 31, |   |   | September 30, |  
|                                                              |  | Note |  |   | 2008         |   |   | 2008          |  
|                                                              |  |      |  |   | (unaudited)  |   |   |               |  
|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 December 2008 and September 30, 2008,          |  |      |  |   |              |   |   |               |  
|respectively                                                  |  |      |  |   | 50,148       |   |   | 50,148        |  
|Additional paid in capital                                    |  |      |  |   | 21,632,697   |   |   | 21,632,697    |  
|Accumulated deficits                                          |  |      |  |   | (26,653,873  | ) |   | (26,310,851   | )
|Accumulated other comprehensive income (loss)                 |  |      |  |   | (11,509      | ) |   | (45,448       | )
|Total stockholders' deficit                                   |  |      |  |   | (4,982,537   | ) |   | (4,673,454    | )
|                                                              |  |      |  |   |              |   |   |               |  
|Total liabilities and stockholders' deficit                   |  |      |  | $ | 1,140,736    |   | $ | 1,499,720     |  

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

F-3

---

|China Health Care Corp                                           
|-----------------------------------------------------------------
|Consolidated Statements of Operations                            
|for the three-month period ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                           

|                                                       |  |          |   | Three months |   |   |                |  
|------------------------------------------------------ |  | -------- | - | ------------ | - | - | -------------- | -
|                                                       |  |          |   | ended        |   |   | Three months   |  
|                                                       |  |          |   | December 31, |   |   | ended December |  
|                                                       |  |          |   | 2008         |   |   | 31, 2007       |  
|Revenue                                                |  | 2 (g),15 | $ | 107,165      |   | $ | 147,049        |  
|Cost of revenue                                        |  | 2 (h)    |   | 41,256       |   |   | 37,133         |  
|Gross profit                                           |  |          |   | 65,909       |   |   | 109,916        |  
|Selling expenses                                       |  | 2 (i)    |   | 17,853       |   |   | 57,920         |  
|General and administrative expenses                    |  | 2 (j)    |   | 444,862      |   |   | 247,873        |  
|Total operating expenses                               |  |          |   | 462,715      |   |   | 305,793        |  
|Other income (expenses)                                |  |          |   |              |   |   |                |  
|Other income                                           |  |          |   | 5,507        |   |   | 181,986        |  
|Interest income                                        |  |          |   | 26           |   |   | 229            |  
|Interest expense                                       |  |          |   | (11,995      | ) |   | (167,342       | )
|Other expenses                                         |  |          |   | (2,311       | ) |   | (12,399        | )
|Total other income (expenses)                          |  |          |   | (8,773       | ) |   | 2,474          |  
|                                                       |  |          |   |              |   |   |                |  
|Loss before income tax and minority interest           |  |          |   | (405,579     | ) |   | (193,403       | )
|                                                       |  |          |   |              |   |   |                |  
|Provision for income tax (tax benefit)                 |  | 2 (k)    |   | -            |   |   | -              |  
|Loss before minority interest                          |  |          |   | (405,579     | ) |   | (193,403       | )
|less: Minority interest in net income (loss)           |  |          |   | -            |   |   | 22,634         |  
|Loss from continuing operations                        |  |          | $ | (405,579     | ) |   | (170,769       | )
|                                                       |  |          |   |              |   |   |                |  
|Gain (loss) from discontinued operations, net of taxes |  | 14       |   | 62,557       |   |   | (242,232       | )
|Net income (loss)                                      |  |          | $ | (343,022     | ) |   | (413,001       | )
|                                                       |  |          |   |              |   |   |                |  
|Earnings (loss) per share                              |  | 2 (l),13 |   |              |   |   |                |  
|Basic and diluted                                      |  |          | $ | (0.0068      | ) | $ | (0.0105        | )
|Weighted average shares outstanding                    |  |          |   |              |   |   |                |  
|Basic and diluted                                      |  |          |   | 50,148,000   |   |   | 39,390,000     |  

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

F-4

---

|Statement of Comprehensive Loss               |  | Note  |   | December 31, |   |   | December 31, |  
|--------------------------------------------- |  | ----- | - | ------------ | - | - | ------------ | -
|Income
      (Loss):                          |  |       |   | 2008         |   |   | 2007         |  
|Net income (loss)                             |  |       | $ | (343,022     | ) | $ | (413,001     | )
|Other comprehensive income (loss)             |  | 2 (m) |   |              |   |   |              |  
|Foreign currency translation
      adjustment |  | 2 (n) |   | 33,939       |   |   | 268,516      |  
|Total comprehensive income                    |  |       | $ | (309,083     | ) | $ | (144,485     | )

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

F-5

---

|China Health Care Corp                                           
|-----------------------------------------------------------------
|Consolidated Statements of Changes in Stockholders
      Equity 
|for the three-month period ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                           

|                                        |  | Common Stock |  |   | Paid   |  |   |            |  |   | Other       |   |   |               |  
|--------------------------------------- |  | ------------ |  | - | ------ |  | - | ---------- |  | - | ----------- | - | - | ------------- | -
|                                        |  | Shares       |  |   | Par    |  |   | in         |  |   | Accumulated |   |   | Comprehensive |  
|                                        |  | Outstanding  |  |   | Amount |  |   | Capital    |  |   | Deficit     |   |   | Income (loss) |  
|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       | )
|Conversion of preferred stock           |  |              |  |   |        |  |   |            |  |   |             |   |   |               |  
|Issuance of common stock                |  |              |  |   |        |  |   |            |  |   |             |   |   |               |  
|Net loss                                |  |              |  |   |        |  |   |            |  |   | (343,022    | ) |   |               |  
|Foreign currency translation adjustment |  |              |  |   |        |  |   |            |  |   |             |   |   | 33,939        |  
|Balance, September 30, 2008             |  | 50,148,000   |  | $ | 50,148 |  | $ | 21,632,697 |  | $ | (26,653,873 | ) | $ | (11,509       | )

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

F-6

---

|China Health Care Corp                                     
|-----------------------------------------------------------
|Consolidated Statements of Cash Flows                      
|for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                     

|                                                                                  |   | Three months   |   |   | Three months   |  
|--------------------------------------------------------------------------------- | - | -------------- | - | - | -------------- | -
|                                                                                  |   | ended December |   |   | ended December |  
|                                                                                  |   | 31, 2008       |   |   | 31, 2007       |  
|Cash Flow from Operating Activities                                               |   |                |   |   |                |  
|Net income (loss)                                                                 | $ | (343,022       | ) | $ | (413,001       | )
|                                                                                  |   |                |   |   |                |  
|Adjustments to reconcile net loss to net cash used in
      operating activities: |   |                |   |   |                |  
|                                                                                  |   |                |   |   |                |  
|Depreciation                                                                      |   | 72,754         |   |   | 64,412         |  
|Decrease/(Increase) in accounts receivable                                        |   | 61,711         |   |   | 63,588         |  
|Decrease/(Increase) in related
      party receivable                             |   | -              |   |   | (16,753        | )
|Decrease/(Increase) in prepaid expenses                                           |   | 63,760         |   |   | (304,596       | )
|(Decrease)/Increase in accounts
      payables                                    |   | 76,235         |   |   | (23,864        | )
|(Decrease)/Increase in accrued liabilities                                        |   | (190,148       | ) |   | (80,917        | )
|(Decrease)/Increase in related
      party payable                                |   | 68,980         |   |   | 112,152        |  
|(Decrease)/Increase in dividend payable                                           |   | (4,970         | ) |   | -              |  
|Cash Sourced from/(Used in)
      operating activities                            |   | (194,700       | ) |   | (598,979       | )
|                                                                                  |   |                |   |   |                |  
|Cash Flows from Investing Activities                                              |   |                |   |   |                |  
|Rent and utility
      (deposits paid)/deposits refund                            |   |                |   |   | (1,211         | )
|(Acquisition of minority
      interest at premium generating goodwill)           |   |                |   |   |                |  
|Proceeds from
      Intangible Assets                                             |   | (387           | ) |   |                |  
|Proceeds from sales of/(purchase
      of) equipment                              |   | (7,135         | ) |   | (1,444         | )
|Cash Sourced
      from/(Used in) investing activities                            |   | (7,522         | ) |   | (2,655         | )
|                                                                                  |   |                |   |   |                |  
|Cash Flows from Financing Activities                                              |   |                |   |   |                |  
|Proceeds from issuance of stock                                                   |   | -              |   |   |                |  
|Issuance of
      convertible preferred stock                                     |   | -              |   |   |                |  
|Paid Dividend                                                                     |   | -              |   |   |                |  
|Cash Sourced
      from/(Used in) Financing Activities                            |   | -              |   |   | -              |  
|                                                                                  |   |                |   |   |                |  
|Net Increase/(Decrease) in Cash &
      Cash Equivalents for the Period           |   | (202,222       | ) |   | (601,634       | )
|                                                                                  |   |                |   |   |                |  
|                                                                                  |   |                |   |   |                |  
|Effect of Currency Translation                                                    |   | 33,939         |   |   | 268,516        |  
|                                                                                  |   |                |   |   |                |  
|Cash & Cash Equivalents at Beginning of Period                                    |   | 229,567        |   |   | 416,705        |  
|                                                                                  |   |                |   |   |                |  
|Cash & Cash Equivalents at End of Period                                          |   | 61,284         |   |   | 83,587         |  

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

F-7

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|China Health Care Corp                        
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|(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.
- On March 19, 2004, UPMG International (Guangdong)
      Limited (UPMGIG) increased its ownership of UPMG (Guangdong) Company Limited
      (UPMGGC) from 99% to 100%.

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

F-8

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

- 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 December 31, 2008:

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 
        UPMGI15
      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 
        PMEHK


F-9

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

No.
      Company Code
      Company Name
      Place of Incorporation
      Date of Incorporation
      Remark17
      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

F-10

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

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 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.

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 $343,022 and a negative cash flow from
  operations of $194,700 for the period ended December 31, 2008 and a working
  capital deficiency of $4,975,400, and a shareholders deficit of $4,982,537 at
  December 31, 2008. 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.

F-11

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES
|-- | ------------------------------------------------
|   |                                                 
|   | (a)                                             
|   |                                                 
|   |                                                 
|   |                                                 
|   | (b)                                             
|   |                                                 
|   |                                                 
|   |                                                 
|   | (c)                                             
|   |                                                 
|   |                                                 
|   |                                                 
|   | (d)                                             
|   |                                                 
|   |                                                 
|   |                                                 
|   | (e)                                             
|   |                                                 
|   |                                                 

F-12

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(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 depreciation expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-13

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

| |     | 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.                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | 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                                                                                                                                                                                                                                                                                                                                                                                       

F-14

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

included in foreign currency
  translation adjustment in other comprehensive income, a component of
  stockholders equity.

| |                       |  | December 31, |  |  | September 30, | 
| | --------------------- |  | ------------ |  |  | ------------- | 
| |                       |  | 2008         |  |  | 2008          | 
| | HKD-USD Year End Rate |  | 7.75070      |  |  | 7.77010       | 
| | HKD-USD Average Rate  |  | 7.75461      |  |  | 7.79297       | 
| | RMB-USD Year End Rate |  | 6.85420      |  |  | 6.85510       | 
| | RMB-USD Average Rate  |  | 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 accounting pronouncements on
      its consolidated results of operations and financial
      condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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

| |                                 |   | At December 31, |  |   | At September 30, | 
| | ------------------------------- | - | --------------- |  | - | ---------------- | 
| |                                 |   | 2008            |  |   | 2008             | 
| | Total Accounts Receivable-Trade | $ | 131,339         |  | $ | 193,050          | 
| | Less: Allowance for Bad Debt    |   | -               |  |   | -                | 
| |                                 | $ | 131,339         |  | $ | 193,050          | 
| |                                 |   |                 |  |   |                  | 
| | Allowance for Bad Debts         |   |                 |  |   |                  | 
| | Beginning Balance               | $ | -               |  | $ | -                | 
| | Allowance Provided              |   | -               |  |   | -                | 
| | Less:Reversal                   |   | -               |  |   | -                | 
| | Ending Balance                  |   | -               |  |   | -                | 

F-15

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

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

| |                        |   | At December 31, |  |   | At September 30, | 
| | ---------------------- | - | --------------- |  | - | ---------------- | 
| |                        |   | 2008            |  |   | 2008             | 
| | Purchases of baby beds | $ | -               |  | $ | 74,689           | 
| | Various miscellaneous  |   | 14,957          |  |   | 4,028            | 
| |                        | $ | 14,957          |  | $ | 78,717           | 

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

| |                               |   | At December 31, |  |   | At September 30, | 
| | ----------------------------- | - | --------------- |  | - | ---------------- | 
| |                               |   | 2008            |  |   | 2008             | 
| | Category of Asset             |   |                 |  |   |                  | 
| | Furniture & fixtures          | $ | 493,864         |  | $ | 492,631          | 
| | Office equipment              |   | 8,321           |  |   | 8,738            | 
| | Computer software             |   | 43,838          |  |   | 42,470           | 
| | Leasehold improvement         |   | 241,812         |  |   | 241,208          | 
| | Center equipment              |   | 929,815         |  |   | 925,468          | 
| | Machinery                     |   | -               |  |   | -                | 
| |                               |   | 1,717,650       |  |   | 1,710,515        | 
| |                               |   |                 |  |   |                  | 
| | Less:Accumulated Depreciation |   |                 |  |   |                  | 
| | Furniture & fixtures          |   | 230,480         |  |   | 214,668          | 
| | Office equipment              |   | 1,915           |  |   | 1,503            | 
| | Computer software             |   | 21,105          |  |   | 18,661           | 
| | Leasehold improvement         |   | 100,755         |  |   | 94,474           | 
| | Center equipment              |   | 586,303         |  |   | 538,499          | 
| | Machinery                     |   | -               |  |   | -                | 
| |                               |   | 940,558         |  |   | 867,805          | 
| |                               |   |                 |  |   |                  | 
| | Equipment, net                | $ | 777,092         |  | $ | 842,710          | 

|6. | GOODWILL                                                                                                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                    
|   | Goodwill amounting to $155,197 and $154,810 as of
      December 31, 2008 and September 30, 2008 is related to the acquisition of
      the minority interest of PME-WX, for which the companys subsidiary,
      UMPGI, purchased the remaining 20% of interest from other stockholder in
      2004. Management annually reviews the carry value of goodwill using the
      sum

F-16

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

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.

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

| |                                       |   | **At September
      30,** |  |   | At September 30, | 
| | ------------------------------------- | - | -------------------------- |  | - | ---------------- | 
| |                                       |   | 2008                       |  |   | 2008             | 
| | Due to Director: Robert Yao Wing Wong |   | 991,157                    |  |   | 854,892          | 
| | Due to Director: Yuen Yee Wong        |   | -                          |  |   | -                | 
| | Loan from Innotech                    |   | 1,588,801                  |  |   | 1,656,086        | 
| |                                       | $ | 2,579,958                  |  | $ | 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.

On November 1, 2008, Innotech lowered
  the interest rates from 5% per annum to 2% per annum and extended the repayment
  until 29 April 2008.

During the period ended December 31,
  2008 and 2007, the Company incurred interest expense of $11,978 and $9,382
  respectively.

The following table summarizes the loan
  from related party: -

| |                          |   | At December 31, |  
| | ------------------------ | - | --------------- | -
| |                          |   | 2008            |  
| | Loan principal amount    | $ | 1,670,212       |  
| | Accrued interest payable |   | 11,920          |  
| | Repayment, net           |   | (82,963         | )
| | Translation difference   |   | (10,368         | )
| | Balance at June 30, 2008 | $ | 1,588,801       |  

F-17

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(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
      
      
      NewAgreement
      
      Amount (USD)
      
      
      Amount (HKFD)
      
      
      Repayment Date
      
      
      Repayment DateJune 20, 2007
      
      772,777
      
      
      (HK$6,000,000
      )
      
      December 22, 2008
      
      
      April 29, 2008January 10, 2008
      
      384,615
      
      
      (HK$3,000,000
      )
      
      July 9, 2009
      
      
      April 29, 2008January 25, 2008
      
      512,820
      
      
      (HK$4,000,000
      )
      
      July 24, 2009
      
      
      April 29, 2008$
      1,670,212


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

| |                            |   | At            |  |   | At            | 
| | -------------------------- | - | ------------- |  | - | ------------- | 
| |                            |   | September 30, |  |   | September 30, | 
| |                            |   | 2008          |  |   | 2008          | 
| | Regular operating expenses | $ | 357,457       |  | $ | 447,925       | 
| | Aliceb Kramer              |   | -             |  |   | 200,059       | 
| | Inter Pacific Capital Ltd  |   | 110,700       |  |   |               | 
| | Income taxes               |   | 14,721        |  |   | 40,799        | 
| | Business taxes             |   | 28,410        |  |   | 14,686        | 
| |                            | $ | 511,288       |  | $ | 703,409       | 

F-18

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

|9. | CONVERTIBLE PREFERRED STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | From June 30, 2005 to September 30, 2007, 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. The Company believes that based on the characteristics of the
      security, such as the mandatory redemption feature, liquidation preference
      ahead of common stockholders, and cumulative dividends are characteristics
      akin to liabilities. Accordingly, the Company recognizes the convertible
      preferred stock as a liability. Any corresponding preferred dividends are
      regularly accrued according to the terms of the agreement and the
      redemption features are booked when the securities are issued. The Company
      typically books the entries by recording a debit to interest expense and
      an offsetting credit to credit to preferred dividends payable.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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. All
      the preferred shares have been subsequently converted except for 600
      shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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 December 31, 2008 and September 30, 2008
      were $19,914 and $24,884.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-19

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

|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 for the years ended
      December 31, 2008 and 2007 since the Company continued to incur net
      operating losses during these years and prior years.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|11. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Resignation of Chief Executive Officer and Chief
      Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On February 1, 2009, Mr. Siew Man Pang resigned as our
      Chief Executive Office, 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 and Mr. Chans resignation, CHCC appointed Mr. Faith
      Lam as Acting Chief Executive Officer and Acting Chief Financial Officer.
      Before the new appointment, Mr. Lam was Vice President (Accounting &
      Procurement)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|12. | STOCK COMPENSATION EXPENSE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | During the three months ended December 31, 2007, the UPMG
      issued 38 shares of its common stock as compensation. The 38 shares of
      UPMG were equivalent to 76,000 shares of the Companys common stock. The
      value of the common stock was $28,619, or $1,428 on per share basis of
      UPMG common stock or equivalent to $0.7155 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 December 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-20

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

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

| |                                                                          |  | three months |   |  | three months |  
| | ------------------------------------------------------------------------ |  | ------------ | - |  | ------------ | -
| |                                                                          |  | ended        |   |  | ended        |  
| |                                                                          |  | December 31, |   |  | December 31, |  
| |                                                                          |  | 2008         |   |  | 2007         |  
| | Earnings (Loss) from continuing operations                               |  | (405,579     | ) |  | (170,769     | )
| |                                                                          |  |              |   |  |              |  
| | Net Loss                                                                 |  | (343,022     | ) |  | (413,001     | )
| |                                                                          |  |              |   |  |              |  
| | Original shares                                                          |  | 50,148,000   |   |  | 39,314,000   |  
| | - Addition to common stock from issuances                                |  | -            |   |  | 76,000       |  
| | Basic weighted average shares outstanding                                |  | 50,148,000   |   |  | 39,390,000   |  
| |                                                                          |  |              |   |  |              |  
| | Dilutive Shares:                                                         |  |              |   |  |              |  
| | - Addition to common stock if preferred stock had been
      converted * |  | -            |   |  | -            |  
| | Diluted Weighted Average Shares
      Outstanding:                       |  | 50,148,000   |   |  | 39,390,000   |  
| |                                                                          |  |              |   |  |              |  
| | Earnings (Loss) Per
      Share                                          |  |              |   |  |              |  
| |                                                                          |  |              |   |  |              |  
| | - basic                                                                  |  | (0.0068      | ) |  | (0.0105      | )
| | - diluted                                                                |  | (0.0068      | ) |  | (0.0105      | )
| | Weighted average shares outstanding                                      |  |              |   |  |              |  
| | - basic                                                                  |  | 50,148,000   |   |  | 39,390,000   |  
| | - diluted                                                                |  | 50,148,000   |   |  | 39,390,000   |  
| |                                                                          |  |              |   |  |              |  
| | Supplemental Data                                                        |  |              |   |  |              |  
| | Earnings (loss) per share from continuing operations                     |  | (0.0081      | ) |  | (0.0043      | )

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

F-21

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

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

| | VIP Birthing Centers                |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | ----------------------------------- |  | -------- | - |  | -------- | - |  | ------- | - |  | -------- | - |  | --------- |  | - | -------- | -
| | Results of Operations               |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | for the three months ended          |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | December 31, 2008                   |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| |                                     |  | Changsha |   |  | Hangzhou |   |  | Foshan  |   |  | Shanghai |   |  | Guangzhou |  |   | Total    |  
| | Revenue                             |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  | $ | -        |  
| | Cost of revenue                     |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | -        |  
| | Gross profit                        |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | -        |  
| |                                     |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | Selling expenses                    |  | 220      |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | 220      |  
| | General and administrative expenses |  | 2,943    |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | 2,943    |  
| | Total operating expenses            |  | 3,163    |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | 3,163    |  
| | Other income                        |  | -        |   |  | -        |   |  | 65,720  |   |  | -        |   |  | -         |  |   | 65,720   |  
| | Other expense                       |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | -        |  
| | Taxes                               |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | -        |  
| | Net income (loss)                   |  | (3,163   | ) |  | -        |   |  | 65,720  |   |  | -        |   |  | -         |  | $ | 62,557   |  
| |                                     |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | VIP Birthing Centers                |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | Results of Operations               |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | for the three months ended          |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | December 31, 2007                   |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| |                                     |  | Changsha |   |  | Hangzhou |   |  | Foshan  |   |  | Shanghai |   |  | Guangzhou |  |   | Total    |  
| | Revenue                             |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  | $ | -        |  
| | Cost of revenue                     |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | -        |  
| | Gross profit                        |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | -        |  
| |                                     |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | Selling expenses                    |  | -        |   |  | -        |   |  | 44      |   |  | -        |   |  | -         |  |   | 44       |  
| | General and administrative expenses |  | 2,572    |   |  | 13       |   |  | 26,489  |   |  | -        |   |  | -         |  |   | 29,074   |  
| | Total operating expenses            |  | 2,572    |   |  | 13       |   |  | 26,533  |   |  | -        |   |  | -         |  |   | 29,118   |  
| |                                     |  |          |   |  |          |   |  |         |   |  |          |   |  |           |  |   |          |  
| | Other income                        |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | 209       |  |   | 209      |  
| | Other expense                       |  | (52      | ) |  | -        |   |  | (36     | ) |  | (213,235 | ) |  | -         |  |   | (213,323 | )
| | Taxes                               |  | -        |   |  | -        |   |  | -       |   |  | -        |   |  | -         |  |   | -        |  
| | Net income (loss)                   |  | (2,624   | ) |  | (13      | ) |  | (26,569 | ) |  | (213,235 | ) |  | 209       |  | $ | (242,232 | )

The Company did not accrue additional
  allowance for doubtful accounts for the accounts receivable for discontinued
  operations.

F-22

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

|VIP Birthing Centers        |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|--------------------------- | - | -------- | - | - | -------- | - | - | ------- | - | - | -------- | - | - | --------- | - | - | -------- | -
|Financial Position          |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|At September 30, 2008       |   | Changsha |   |   | Hangzhou |   |   | Foshan  |   |   | Shanghai |   |   | Guangzhou |   |   | Total    |  
|Current assets              |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Accounts receivable         | $ | -        |   | $ | -        |   | $ | -       |   | $ | -        |   | $ | -         |   | $ | -        |  
|Related party receivables   |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|Prepaid expenses            |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|Total current assets        |   | -        |   |   | -        |   |   |         |   |   | -        |   |   | -         |   |   | -        |  
|                            |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Non-current assets          |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Property and equipment, net |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|                            |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Total assets                |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|                            |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Current liabilities         |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Accounts payable            |   | 2,401    |   |   | -        |   |   | 60,713  |   |   | 776,105  |   |   | -         |   |   | 839,219  |  
|Related party payable       |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|Accrued liabilities         |   | 1,287    |   |   | 772      |   |   | 1,287   |   |   | 12,960   |   |   | 4,198     |   |   | 20,504   |  
|Total current liabilities   |   | 3,688    |   |   | 772      |   |   | 62,000  |   |   | 789,065  |   |   | 4,198     |   |   | 859,723  |  
|                            |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Total liabilities           |   | 3,688    |   |   | 772      |   |   | 62,000  |   |   | 789,065  |   |   | 4,198     |   |   | 859,723  |  
|                            |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Net assets                  | $ | (3,688   | ) | $ | (772     | ) | $ | (62,000 | ) | $ | (789,065 | ) | $ | (4,198    | ) | $ | (859,723 | )
|VIP Birthing Centers        |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Financial Position          |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|At December 31, 2008        |   | Changsha |   |   | Hangzhou |   |   | Foshan  |   |   | Shanghai |   |   | Guangzhou |   |   | Total    |  
|Current assets              |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Accounts receivable         |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|Related party receivables   |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|Prepaid expenses            |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|Total current assets        |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|                            |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Non-current assets          |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Property and equipment, net |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|                            |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Total assets                |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|                            |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Current liabilities         |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Accounts payable            |   | 2,407    |   |   | -        |   |   | 35,534  |   |   | 879,813  |   |   | -         |   |   | 917,754  |  
|Related party payable       |   | -        |   |   | -        |   |   | -       |   |   | -        |   |   | -         |   |   | -        |  
|Accrued liabilities         |   | 1,516    |   |   | 774      |   |   | 1,348   |   |   | 14,692   |   |   | 4,209     |   |   | 22,539   |  
|Total current liabilities   |   | 3,923    |   |   | 774      |   |   | 36,882  |   |   | 894,505  |   |   | 4,209     |   |   | 940,293  |  
|                            |   |          |   |   |          |   |   |         |   |   |          |   |   |           |   |   |          |  
|Total liabilities           |   | 3,923    |   |   | 774      |   |   | 36,882  |   |   | 894,505  |   |   | 4,209     |   |   | 940,293  |  
|Net assets                  | $ | (3,923   | ) | $ | (774     | ) | $ | (36,882 | ) | $ | (894,505 | ) | $ | (4,209    | ) | $ | (940,293 | )

F-23

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(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 three months ended December 31, 2008, 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 nine months
      presented.

| |        |   |         |  |  | Percentage Contribution | 
| | ------ | - | ------- |  |  | ----------------------- | 
| | Center |   | Amount  |  |  | to Total Revenue        | 
| | Xiamen | $ | 7,324   |  |  | 6.83%                   | 
| | Wuxi   |   | 84,660  |  |  | 79.00%                  | 
| | Macau  |   | 15,181  |  |  | 14.17%                  | 
| |        | $ | 107,165 |  |  | 100.00%                 | 

F-24

---

|China Health Care Corp                                         
|---------------------------------------------------------------
|Notes to Consolidated Financial Statements                     
|At December 31, 2008 and September 30, 2008                    
|and for the three months ended December 31, 2008 and
      2007
|(Stated in US Dollars)                                         

|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 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.

F-25

---

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

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

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 Periods Ended
December 31, 2008 as compared to the Three-Month Periods Ended December 31,
2007.

|                |  | Three months ended |  |  | Increase (decrease) | 
|--------------- |  | ------------------ |  |  | ------------------- | 
|                |  | December 31,       |  |  |                     | 
|                |  | 2008               |  |  | 2007                | 
|                |  | ($)                |  |  | ($)                 | 
|                |  |                    |  |  |                     | 
|Revenue         |  | 107,165            |  |  | 147,049             | 
|Cost of revenue |  | 41,256             |  |  | 37,133              | 
|Gross profit    |  | 65,909             |  |  | 109,916             | 

2

---

|Selling expenses                             |  | 17,853   |   |  | 57,920   |   |  | (40,067 | ) |  | (69.18%  | )
|-------------------------------------------- |  | -------- | - |  | -------- | - |  | ------- | - |  | -------- | -
|General and administrative expenses          |  | 444,862  |   |  | 247,873  |   |  | 196,989 |   |  | 79.47%   |  
|Total other income (expenses)                |  | (8,773   | ) |  | 2,474    |   |  | (11,247 | ) |  | (454.61% | )
|Provision for income tax                     |  | 0        |   |  | 0        |   |  | 0       |   |  | 0%       |  
|Minority interests in net income (loss) of   |  |          |   |  |          |   |  |         |   |  |          |  
|Subsidiaries                                 |  | 0        |   |  | 22,634   |   |  | (22,634 | ) |  | (100%    | )
|Gain (loss) from discontinued operations,    |  |          |   |  |          |   |  |         |   |  |          |  
|net of taxes                                 |  | 62,557   |   |  | (242,232 | ) |  | 304,789 |   |  | 125.83%  |  
|                                             |  |          |   |  |          |   |  |         |   |  |          |  
|Net loss attributable to common shareholders |  | (343,022 | ) |  | (413,001 | ) |  | 69,979  |   |  | 16.94%   |  

Revenue

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.
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.

Revenue for the three-month period ended December 31, 2008 was
$107,165. Revenue for the three-month period ended December 31, 2007 was
$147,049. The decrease in revenue of $39,884 for the three-month period ended
December 31, 2008 was primarily due to the overall decrease in revenue
contribution from the Xiamen Center and the Wuxi Center.

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
December 31, 2008 was $41,256 whilst cost of revenue for the three-month period
ended December 31, 2007 was $37,133.

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 December 31, 2008
was $17,853 whilst selling expenses for the three-month period ended December
31, 2007 was $57,920. The decrease in selling expenses of $40,067 for the
three-month period ended December 31, 2008 as compared to 2007 was primarily due
to the decrease in business trip expenses in 2008.

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
December 31, 2008 was $444,862. General and administrative expenses for the
three-month period ended December 31, 2007 was $247,873. The increase in general
and administrative expenses of $196,989 for the three-month period ended
December 31, 2008 as compared to 2007 was primarily due to the increase in
consultancy fees and professional fees.

3

---

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, 2007, 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 three months ended
December 31, 2008 and we incurred dividend expenses of $148,324 for the three
months ended December 31, 2007. No dividend expense for the three months ended
December 31, 2008 was due to the conversion of some CPS to common shares and we
have stopped paying dividends to CPS holders since December 2007.

Income Tax

We account for income tax using an asset and liability approach
and allows 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 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 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 periods ended December 31,
2008 and 2007.

Minority Interest

No minority interest income was recorded for the for the three
month ended December 31, 2008 whilst the minority interest recorded an income of
$22,634 for the three month ended December 31, 2007. The decrease in minority
interest of $22,634 for the three months ended December 31, 2008 was primarily
due to there was no shared loss of a Subsidiary.

Net Loss Attributable to Common Shareholders

For the three-month period ended December 31, 2008, we incurred
a net loss attributable to common shareholders of $343,022. The loss was
primarily due to the increase in general and administrative expenses incurred
for the public company expenses and the consultancy service fees. For the
three-month period ended December 31, 2007, the Company incurred a loss of
$413,001. The loss was primarily due to the dividends paid to the convertible
preference shareholders and the professional fees for listing process.

Liquidity and Capital Resources

As of December 31, 2008, our total assets were $1,140,736 and
our total liabilities were $6,123,273 and we had a working capital deficit of
$4,975,400. Our financial statements report a net loss of $343,022 for the
quarter ended December 31, 2008, and a net loss of $26,653,873 for the period
from inception to December 31, 2008.

During the three month periods ended December 31, 2008 and
2007, 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.

4

---

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.

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

|                                                                   |  | Three Months       | 
|------------------------------------------------------------------ |  | ------------------ | 
|                                                                   |  | Ended December 31, | 
|                                                                   |  | 2008               | 
|Net cash used in operating activities                              |  | 194,700            | 
|Net cash used in investing activities                              |  | 7,522              | 
|Net cash provided by financing activities                          |  | 0                  | 
|Net decrease in cash and cash equivalents                          |  | 202,222            | 
|Cash and cash equivalents, beginning of
      period               |  | 229,567            | 
|Effect of exchange rate changes on cash and cash
      equivalents |  | 33,939             | 
|Cash and cash equivalents, at end of period                        |  | 61,284             | 

Our cash requirement is mainly for daily working capital. As at
December 31, 2008, we had $61,284 in cash and cash equivalents and a working
capital deficiency of $4,975,400, compared to $83,587 in cash and cash
equivalents and a working capital deficiency of $4,812,117 as of December 31,
2007.

Cash Flows from Operating Activities

For the three months ended December 31, 2008, our operating
activities used cash of $194,700. For the three months ended December 31, 2007,
our operating activities used cash of $598,979. The decrease in cash used in
operating activities of $404,279 for the three months ended December 31, 2008
was primarily due to no dividend expense was incurred for the three months ended
December 31, 2008 as we have stopped paying dividends to CPS holders since
December 2007.

Cash Flows from Investing Activities

For the three months ended December 31, 2008, our investing
activities used cash of $7,522. For the three months ended December 31, 2007,
our investing activities used cash of $2,655. The increase in cash used in
investing activities of $4,867 for the three months ended December 31, 2008 was
primarily due to the increase in purchase of equipment.

Cash Flows from Financing Activities

For the three months ended December 31, 2008 and 2007, our
financing activities did not generate any cash.

Capital Expenditures

During the three months ended December 31, 2008, we incurred
capital expenditures of $7,135. The capital expenditure principally consisted of
medical equipment and facilities, office equipment and leasehold improvement.
During the three months ended December 31, 2007, we incurred capital
expenditures of $1,444. Depending 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.

5

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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 $343,022 and a negative cash flow from operations of $202,222 for
the three month period ended December 31, 2008 and a working capital deficiency
of $4,975,400, and a shareholders deficit of $4,982,537 at December 31, 2008.
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.

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.                                                                                                                                                                                                                                                                            

6

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| | (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 depreciation expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

7

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| |     | 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.                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

8

---

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.

| |                       |  | December 31, |  |  | September 30, | 
| | --------------------- |  | ------------ |  |  | ------------- | 
| |                       |  | 2008         |  |  | 2008          | 
| | HKD-USD Year End Rate |  | 7.75070      |  |  | 7.77010       | 
| | HKD-USD Average Rate  |  | 7.75461      |  |  | 7.79297       | 
| | RMB-USD Year End Rate |  | 6.85420      |  |  | 6.85510       | 
| | RMB-USD Average Rate  |  | 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 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.

9

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ITEM 4. 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 December 31, 2008, 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.

Changes in Internal Control over Financial
Reporting

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

10

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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.

11

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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.

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 December
31, 2008, our cash available was approximately $61,284. 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 three month period ended December 31, 2008, 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.

12

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

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

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

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

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

If we fail to use the brand of Johns Hopkins
International, 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.

13

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

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

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

Risks Relating to the Peoples Republic of China

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

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

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

14

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legal protection that we enjoy either by law or contract.
However, because PRC administrative and court authorities have significant
discretion in interpreting and implementing statutory and contractual terms, it
may be more difficult to evaluate the outcome of administrative and court
proceedings and the level of legal protection we enjoy than in more developed
legal systems. In addition, such uncertainties, including the inability to
enforce our contracts, could materially and adversely affect our business and
operation. Also, intellectual property rights and confidentiality protections in
the PRC may not be as effective as in the United States or other countries.
Accordingly, we cannot predict the effect of future developments in the PRC
legal system, particularly with regard to the medical industry, including the
promulgation of new laws, changes to existing laws or the interpretation or
enforcement thereof, or the preemption of local regulations by national laws.
These uncertainties could limit the legal protections available to us.

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

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

Risks Relating to Our Common Shares

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

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

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

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

15

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

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

Trends, Risks and Uncertainties

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

ITEM 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

None.

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).

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)
|        |                                                                                                                                                                                                                                                                                                                             
|(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)                                                                                                                                                                                                                

16

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|Exhibit |                                                                                                                                                                                                                                                                                                                                                
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                
|(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)                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                
|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)                                 

17

---

|Exhibit |                                                                                                                                                                                                                                                                                                                                                                                                
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description                                                                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|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 Current Report on Form 8-K filed on
      July 31, 2008)                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|10.30   | Project Consultancy Agreement between PMEHK and PMEUS
      dated March 28, 2004. (incorporated by reference from our Current Report
      on Form 8-K filed on July 31, 2008)                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|(21)    | Subsidiaries of the Small Business Issuer                                                                                                                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                                                                
|        | UPMG International Limited                                                                                                                                                                                                                                                                                                                                                                     
|        | Proactive Medicare Enterprise (Hong Kong)
      Limited                                                                                                                                                                                                                                                                                                                                        
|        | Proactive Medicare (Shenzhen)
      Company Limited                                                                                                                                                                                                                                                                                                                                            
|        | Proactive Medicare (Changsha) Company Limited                                                                                                                                                                                                                                                                                                                                                  
|        | Proactive Medicare (Xiamen)
      Company Limited                                                                                                                                                                                                                                                                                                                                              

18

---

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

F19

---

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                 |              
|Principal Executive Officer                     |              
|Date: February 17, 2009.                        |              
|                                                |              
|                                                |              
|                                                |               | 
|By:                                             | /s/ Faith Lam | 
|Faith Lam                                       |              
|Interim Chief Financial Officer                 |              
|Principal Financial Officer and
      Principal |              
|Accounting Officer                              |              
|Date: February 17, 2009.                        |              

20

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