UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 FORM 10-QSB/A1

                                   (Mark One)

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

                  For the Quarterly Period Ended March 31, 2005

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

              For the Transition Period from _________ to _________

                         Commission file number: 0-49608

                            BASIC EMPIRE CORPORATION
             (Exact name of registrant as specified on its charter)

            Delaware                                             75-2955368
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)

                           Room 511, 5/F Wing on Plaza
                           62 Mody Road, Tsim Sha Tsui
                               Kowloon, Hong Kong
                    (Address of principle executive offices)

      (+852) 6555 1799(Registrant's telephone number, including area code)

                                   Copies to:

                                   Charles Law
                                King and Wood LLP
                               650 Page Mill Road,
                               Palo Alto, CA 94304



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 past 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes [_] No [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares  outstanding of each of the  registrant's  classes of
common equity, as of the latest  practicable  date:  12,374,903 shares of common
stock issued and outstanding as of March 31, 2005.


         Transitional Small Business disclosure format: Yes [ ] No [ X ]

<PAGE>


                            BASIC EMPIRE CORPORATION

                                TABLE OF CONTENTS

PART I     FINANCIAL INFORMATION

ITEM 1     Consolidated Balance Sheet -March 31, 2005 (unaudited)              1
           Consolidated Statements of Income
           - Three Months Ended March 31, 2005 and 2004 (unaudited)            3
           Consolidated Statements of Cash Flows
           - Three Months Ended March 31, 2005 and 2004 (unaudited)            4
           Notes to Interim Consolidated Financial Statements (unaudited)   5-11

ITEM 2     Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                           11-25

ITEM 3     Controls and Procedures                                         25-26

PART II    OTHER INFORMATION

ITEM 1     Legal proceedings                                                  26
ITEM 2     Unregistered Sales of Equity Securities and use of proceeds        26
ITEM 3     Defaults upon senior securities                                    26
ITEM 4     Submission of matters to a vote of security holders                26
ITEM 5     Other information                                                  26
ITEM 6     Exhibits and Reports on 8-K                                        27

SIGNATURES                                                                    30

EXHIBITS

================================================================================

Subsequent to the filing of the Quarterly  Report on Form 10-QSB for the quarter
ended  March 31,  2005,  it was found that the Company has omitted to record the
financial  advisory  fee  amounting  to $640,000 as per the  Financial  Advisory
Agreement,  dated  November 17, 2004,  and the first  amendment  thereto,  dated
December 23, 2004,  related to the quarter ended March 31, 2005. The Company has
understated its merger cost and the transaction should have been recorded in the
Company's  consolidated  financial  statements  for the quarter  ended March 31,
2005.  The Company is filing this  Amendment No. 1 on Form  10-QSB/A1 to restate
the previously filed  consolidated  financial  statements on Form 10-QSB for the
quarter ended March 31, 2005. The restatements relate to the following:

a. On November  17, 2004, a financial  advisory  agreement  was made and entered
into by and between HFG International Limited ("HFG") and China Tailong Holdings
Company  Limited  ("Tailong",  a subsidiary of the Company),  both companies are




                                       ii

<PAGE>

incorporated in Hong Kong, which agreement was subsequently  amended on December
23,  2004.  Under the  agreement , as  amended,  it was agreed that i) HFG would
consult on the development and  implementation of a restructuring plan resulting
in an  organizational  structure  that would allow the  Company to complete  the
Going Public  Transaction,  as defined therein,  ii) HFG would help facilitate a
combination  transaction between Tailong and a public shell corporation that was
domiciled in the United States of America,  obligated to file  periodic  reports
with the U.S. Securities and Exchange Commission and whose shares were quoted on
the Over-the-Counter  Bulletin Board . For its services, HFG was entitled to fee
compensation of $640,000.

b. The Company failed to record the financial advisory fee as merger cost in its
books  and  records.  This  expense  should  be  included  in  the  Consolidated
Statements  of Income for the three  months  ended March 31, 2005 and recorded a
liability of $640,000  less the amount  settled of $385,635  with the  unsettled
amount of $254,365 in the Consolidated Balance Sheet at March 31, 2005.

c. On February 3, 2005, the Company  completed the sale of 590,283 shares of its
restricted  common stock for $1.6941 per share for total cash of  $1,000,000  to
accredited  investors pursuant to the stock purchase agreement dated February 3,
2005. However, the Company failed to record this sale of shares in its books and
records.  This  sale of shares  for cash  should  be  recorded  as cash and cash
equivalents  of  $1,000,000,  and be  credited  as  share  capital  of $591  and
additional paid-in capital of $999,409.

All the information presented below in the consolidated financial statements and
the  related  notes  include  the  above  restatements  and Item 2 -  Management
Discussion and Analysis has been amended accordingly.

This Amendment No. 1 on Form 10-QSB/A1 does not reflect events  occurring  after
the filing of the  Company's  original  Quarterly  Report on Form 10-QSB for the
three months ended March 31, 2005,  or modify,  amend or update the  disclosures
therein in any way other than as set forth above.










                                      iii
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                            BASIC EMPIRE CORPORATION.
                           CONSOLIDATED BALANCE SHEET
                        As at March 31, 2005 (Unaudited)

                                                                      (Restated)
ASSETS
CURRENT ASSETS:
   Cash & cash equivalents                                           $ 1,023,374
   Accounts receivable, net                                            7,626,581
   Prepayments and other receivables                                     230,169
   Due from shareholders                                                 240,390
   Due from related party                                                    530
   Inventory                                                             150,282
                                                                     -----------
        Total current assets                                           9,271,326
PROPERTY AND EQUIPMENT, net                                            1,103,828
                                                                     -----------
                                                                     $10,375,154
                                                                     ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable                                                  $   608,201
   Accrued expenses and other payables                                 1,034,811
   Amount due to a shareholder                                           670,190
   Due to related company                                                172,758
   Income tax payable                                                    955,702
                                                                     -----------
        Total current liabilities                                      3,441,662

MINORITY INTEREST                                                        726,583




                                       1
<PAGE>

STOCKHOLDERS' EQUITY
    Common stock, $.001 par value;
     authorized shares 100,000,000;
     issued and outstanding 12,374,903 shares                             12,375
    Additional paid-in capital                                         1,485,907
    Accumulated other
    comprehensive income                                                  20,260
    Statutory reserves                                                   784,628
    Retained earnings                                                  3,903,739
                                                                     -----------
        Total stockholders' equity                                     6,206,909
                                                                     -----------
                                                                     $10,375,154
                                                                     ===========

















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

                                       2
<PAGE>

                            BASIC EMPIRE CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                    For the three-month periods
                                                          Ended March 31
                                                       2005            2004
                                                   ------------    ------------
                                                    (Restated)       (Restated)

Net revenue                                        $  4,985,120    $  2,161,774
Cost of revenue                                      (2,367,602)     (1,096,285)
                                                   ------------    ------------
Gross profit                                          2,617,518       1,065,489
Operating expenses
  Selling expenses                                     (366,814)       (222,594)
  General and administrative expenses                  (518,337)       (135,622)
                                                   ------------    ------------
Total operating expenses                               (885,151)       (358,216)
                                                   ------------    ------------
Income from operations                                1,732,367         707,273
Non-operating Income(expenses):
  Merger cost                                          (640,000)           --
  Finance cost                                               (3)           (975)
  Others                                                      9            --
                                                   ------------    ------------
Total non-operating income(expense)                    (639,994)           (975)
                                                   ------------    ------------
Income before taxation                                1,092,373         706,298
Income tax                                             (723,675)       (150,665)
                                                   ------------    ------------
Income after taxation                                   368,698         555,633
Minority interest                                      (146,928)           --
                                                   ------------    ------------
Net income                                         $    221,770    $    555,633
                                                   ============    ============
Basic and diluted weighted average
   shares outstanding                                12,158,466      10,606,158
                                                   ============    ============
Basic and diluted earnings
   per share *                                     $       0.02    $       0.05
                                                   ============    ============


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


                                       3
<PAGE>


                            BASIC EMPIRE CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2005 AND 2004
                                   (Unaudited)
                                                         2005           2004
                                                     -----------    -----------
                                                      (Restated)     (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                           $   221,770    $   555,633
Adjustments to reconcile net income to net cash
   used in operating activities:
Depreciation and amortization                             25,152         25,974
Minority interest                                        146,928           --
Loss of disposal of fixed assets                            --           36,000
 (Increase / decrease in current assets:
    Due from shareholders                               (233,461)          --
    Due from related party                                  (530)          --
    Accounts receivable                               (2,067,144)      (695,205)
    Inventories                                          401,860        591,862
    Prepayment and other receivables                      67,777        482,556
Increase / (decrease) in current liabilities:
    Accounts payable                                     218,810        (56,633)
    Accrued liabilities and other payables               768,522         98,309
    Income tax payable                                   469,890        176,477
    Due to shareholders                                  171,159         10,753
    Due to related companies                            (403,236)      (875,941)
    Due to directors                                        --         (342,424)
    Interest bearing loan from holding company              --          (59,036)
                                                     -----------    -----------
Net cash used in operating activities                   (212,503)       (51,675)
                                                     -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired from reverse acquisition of Tailong         38,065           --
Acquisition of property & equipment                         (528)          --
                                                     -----------    -----------
Net cash used in investing activities                     37,537           --
                                                     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of short term loan                                 --           50,258
Issuance of shares                                     1,000,000           --
                                                     -----------    -----------
Net cash provided by financing activities              1,000,000         50,258
                                                     -----------    -----------
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS       825,034         (1,417)
CASH & CASH EQUIVALENTS, BEGINNING BALANCE               198,340         10,601
                                                     -----------    -----------
CASH & CASH EQUIVALENTS, ENDING BALANCE              $ 1,023,374    $     9,184
                                                     ===========    ===========


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


                                       4
<PAGE>

                            BASIC EMPIRE CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2005
                                   (unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

         Basic Empire Corporation (the "Company") was incorporated on January 5,
1925  under the laws of the State of Nevada  as Argyle  Mining  Company  for the
development  of mining  claims.  In 1970,  the Company  experienced  a change in
control and focused its business  activities on the development of properties in
Southern  California.  None of these efforts were successful and the Company has
been dormant since 1986.

         The Company has experienced several corporate name changes as follows:-
Argyle  Corporation  in January 1960;  Basic Empire in November  1963; and Basic
Empire Corporation in December 1976.

         The Company has had no operations,  assets and liabilities  since 1986,
until the reorganization in February 2005 as described below.

On December 25, 2004,  the  Company,  China  Tailong  Holdings  Company  Limited
("Tailong"), and the Tailong stockholders entered into the Agreement and Plan of
Reorganization  ("Reorganization Agreement"), as amended and such Reorganization
became effective on February 3, 2005. The Reorganization  Agreement provided for
the  acquisition  by the  Company  from the Tailong  stockholders  of all of the
issued and outstanding Tailong shares in exchange for 10,606,158 shares of newly
issued restricted common stock of the Company.

As a result of the  combination  with Tailong,  the Company  became a fertilizer
manufacturer  and conducts  operations  in the  People's  Republic of China (the
"PRC")  through its  wholly-owned  subsidiary,  Tailong and  Tailong's 90% owned
subsidiary, Pacific Dragon Fertilizer Co., Ltd. ("Pacific Dragon").

Tailong was  incorporated  on October  27, 2003 under the laws of Hong Kong.  On
October  9,  2004,  Tailong  acquired  90% of Pacific  Dragon,  which  conducted
Tailong's only business operation.  Pacific Dragon is a foreign investment joint
venture  and was  incorporated  in the PRC on May 20,  1994.  Pacific  Dragon is
classified as a Foreign Invested Enterprise ("FIE") in the PRC and is subject to
the FIE laws of the PRC. Its legal  structure is similar to a limited  liability
company  organized  under  state  laws in the United  States.  The  Articles  of
Associations provide for a term of 15 years with registered capital of $500,000.
Pacific Dragon engages in the business of  manufacturing  and marketing a series
of organic liquid compound fertilizers.  These products are marketed and sold to
farmers in 11 provinces of China.  Pacific Dragon conducts on-going research and
development to enhance  concentration of the organic liquid compound  fertilizer
and lower the  manufacturing  cost. The principal  researchers in Pacific Dragon
are Liu Shuhua and Liu Kangde. The annual expense on research and development is
around RMB300,000 to 500,000 (approximately $36,276 to $60,460). As of September
30, 2004, we had an approximate  annual production  capacity of 5000 metric tons
("MT") for organic liquid compound fertilizers.




                                       5
<PAGE>

The  exchange  of  shares  with  Tailong  has been  accounted  for as a  reverse
acquisition  under the purchase method of accounting  since the  shareholders of
the Tailong obtained control of the consolidated entity. Accordingly, the merger
of the two companies has been recorded as a  recapitalization  of Tailong,  with
Tailong  being  treated  as the  continuing  entity.  The  historical  financial
statements  presented are those of Tailong.  The continuing company has retained
December  31 as its  fiscal  year end.  The  financial  statements  of the legal
acquirer are not significant;  therefore,  no pro forma financial information is
submitted.

NOTE 2 - BASIS OF PRESENTATION

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
a year-end of December 31.

The  accompanying  unaudited  financial  statements  of the  Company  have  been
prepared in accordance with generally accepted accounting principles for interim
financial information.  Accordingly,  they do not include all of the information
required by generally  accepted  accounting  principles  for complete  financial
statements. In the opinion of management,  all adjustments (consisting of normal
recurring  adjustments)  considered  necessary for a fair presentation have been
included.  Operating  results  for  the  interim  periods  are  not  necessarily
indicative of the results for any future period. These statements should be read
in conjunction with the Company's audited financial statements and notes thereto
for the fiscal year ended December 31, 2004.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates
----------------

The  preparation  of  consolidated   financial  statements  in  conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the consolidated  financial statements and the amount
of revenues and expenses during the reporting  periods.  Management  makes these
estimates  using the best  information  available at the time the  estimates are
made. However, actual results could differ materially from those results.


Stock-based compensation
------------------------

The Company  accounts  for  stock-based  compensation  plans under  Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation"  (SFAS 123).  SFAS No. 123  prescribes  accounting  and  reporting
standards for all  stock-based  compensation  plans,  including  employee  stock
options,  restricted stock, employee stock purchase plans and stock appreciation
rights. SFAS No. 123 requires  compensation expense to be recorded (i) using the
new fair value method or (ii) using the existing  accounting rules prescribed by





                                       6
<PAGE>

Accounting  Principles  Board  Opinion No. 25,  "Accounting  for stock issued to
employees"  (APB 25) and related  interpretations  with pro forma  disclosure of
what net income and earnings  per share would have been had the Company  adopted
the new  fair  value  method.  The  Company  uses  the  intrinsic  value  method
prescribed  by APB25 and has  opted  for the  disclosure.  The  Company  has not
granted any options through March 31, 2005.

Advertising Costs
-----------------

The Company expenses the cost of advertising as incurred or, as appropriate, the
first time the advertising takes place.  Advertising costs for the periods ended
March 31, 2005 and 2004 were insignificant.

Income Taxes
------------

The Company uses the asset and liability  method of accounting for income taxes.
At March 31, 2005 and December 31,  2004,  respectively,  the deferred tax asset
and deferred tax liability accounts,  as recorded when material to the financial
statements,  are  entirely  the  result  of  temporary  differences.   Temporary
differences  represent  differences in the recognition of assets and liabilities
for tax and financial reporting purposes, primarily accumulated depreciation and
amortization, allowance for doubtful accounts and vacation accruals.

As of March 31, 2005 and December 31,  2004,  the deferred tax asset  related to
the Company's net operating  loss  carryforward  is fully  reserved.  Due to the
provisions  of Internal  Revenue  Code  Section 338, the Company may have no net
operating  loss  carryforwards  available to offset  financial  statement or tax
return  taxable  income in  future  periods  as a result of a change in  control
involving 50 percentage points or more of the issued and outstanding  securities
of the Company.

Earning per share
-----------------

The Company has presented a dual  presentation of basic and diluted earnings per
share ("EPS") with a reconciliation  of the numerator and denominator of the EPS
computations.  Basic EPS amounts  are based on the  weighted  average  shares of
common  stock  outstanding.  Diluted  EPS assumes  the  conversion,  exercise or
issuance of all potential common stock instruments such as options, warrants and
convertible  securities,  unless  the  effect  is to  reduce a loss or  increase
earnings per share. As of March 31, 2005 and 2004 respectively,  the Company had
no warrants and /or options outstanding.

Statement of Cash Flows
-----------------------

In accordance with Statement of Financial Accounting Standards No. 95,"Statement
of Cash Flows," cash flows from the Company's  operations  is  calculated  based
upon  the  local  currencies.  As  a  result,  amounts  related  to  assets  and
liabilities  reported on the statement of cash flows will not necessarily  agree
with changes in the corresponding balances on the balance sheet.




                                       7
<PAGE>

Segment Reporting
-----------------

Statement of Financial  Accounting  Standards  No. 131 ("SFAS  131"),"Disclosure
About  Segments of an Enterprise  and Related  Information"  requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating  decisions and assessing  performance.  Reportable segments
are based on products  and  services,  geography,  legal  structure,  management
structure, or any other manner in which management disaggregates a company. SFAS
131 has no effect on the  Company's  consolidated  financial  statements  as the
Company consists of one reportable business segment.

Recent Accounting Pronouncements
--------------------------------

In March 2004, the Emerging  Issues Task Force  ("EITF")  reached a consensus on
Issue  No.  03-1,  "The  Meaning  of  Other-Than-Temporary  Impairment  and  its
Application  to Certain  Investments."  The EITF  reached a consensus  about the
criteria  that should be used to  determine  when an  investment  is  considered
impaired,  whether that impairment is other-than-temporary,  and the measurement
of an  impairment  loss and how that criteria  should be applied to  investments
accounted for under SFAS No. 115, "ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND
EQUITY  SECURITIES".   EITF  03-01  also  included   accounting   considerations
subsequent to the recognition of an other-than-temporary impairment and requires
certain  disclosures  about  unrealized  losses that have not been recognized as
other-than-temporary   impairments.   Additionally,   EITF  03-01  includes  new
disclosure  requirements  for  investments  that are  deemed  to be  temporarily
impaired.  In September  2004, the Financial  Accounting  Standards Board (FASB)
delayed  the  accounting  provisions  of  EITF  03-01;  however  the  disclosure
requirements remain effective for annual reports ending after June 15, 2004. The
Company will evaluate the impact of EITF 03-01 once final guidance is issued.

In November 2004, the FASB has issued FASB Statement No. 151,  "Inventory Costs,
an Amendment of ARB No. 43, Chapter 4" ("FAS No. 151").  The amendments  made by
FAS No. 151 are  intended to improve  financial  reporting  by  clarifying  that
abnormal amounts of idle facility expense,  freight,  handling costs, and wasted
materials  (spoilage)  should be  recognized  as  current-period  charges and by
requiring the allocation of fixed production overheads to inventory based on the
normal  capacity of the  production  facilities.  The guidance is effective  for
inventory  costs  incurred  during fiscal years  beginning  after June 15, 2005.
Earlier  application  is permitted for inventory  costs  incurred  during fiscal
years  beginning  after November 23, 2004. The provisions of FAS No. 151 will be
applied  prospectively.  The Company does not expect the adoption of FAS No. 151
to have a material impact on its  consolidated  financial  position,  results of
operations or cash flows.

In December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment,
an Amendment of FASB Statement No. 123" ("FAS No. 123R").  FAS No. 123R requires
companies to recognize in the statement of operations the grant-date  fair value
of stock options and other equity-based  compensation  issued to employees.  FAS
No. 123R is effective  beginning in the Company's second quarter of fiscal 2006.
The Company is in process of evaluating the impact of this pronouncements on its
consolidated financial position, results of operations or cash flows.




                                       8
<PAGE>

In December  2004,  the FASB  issued  SFAS  Statement  No.  153,  "Exchanges  of
Nonmonetary  Assets."  The  Statement  is an  amendment of APB Opinion No. 29 to
eliminate the exception for nonmonetary  exchanges of similar  productive assets
and replaces it with a general  exception  for exchanges of  nonmonetary  assets
that do not have commercial substance. The Company believes that the adoption of
this standard will have no material impact on its financial statements.


Fair Value of Financial Instruments
-----------------------------------

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.

NOTE 4 - AMOUNT DUE TO A SHAREHOLDER

The amount due to a  shareholder  was  non-interest  bearing  and  repayable  on
demand.

NOTE 5 - AMOUNT DUE TO A RELATED COMPANY

The amount due to a related  company was  non-interest  bearing and repayable on
demand.

NOTE 6 - COMMON STOCK

Pursuant to the Reorganization Agreement (as defined in Note 1 "Organization and
Description of Business"  above),  the Company issued 10,606,158 shares of newly
issued restricted common stock in exchange for all of the issued and outstanding
common stock of Tailong.

On February 3, 2005,  and following the  combination  with Tailong,  the Company
completed the sale of 590,283  shares of its restricted  common stock  ("Private
Placement Shares") for $1.6941 per share for a total of $1,000,000 to accredited
investors pursuant to the stock purchase agreement dated February 3, 2005.

NOTE 7 - INCOME TAXES

There is no income tax (benefit) expense for the periods ended March 31,2005 and
2004 respectively. As a result of various changes in control in prior years, the
Company  has a nominal  net  operating  loss  carrying  forward  for  income tax
purposes. The amount and availability of any net operating loss carrying forward



                                       9
<PAGE>

may be subject to limitations  set forth by the Internal  Revenue Code.  Factors
such as the number of shares  ultimately  issued  within a three-year  look-back
period;  whether  there is a  deemed  more  than  50%  change  in  control;  the
applicable  long-term tax exempt bond rate;  continuity of historical  business;
and subsequent income of the Company all entered into the annual  computation of
allowable utilization of the tax loss carrying forward.

The  Company  does not have any  temporary  differences  between  the  financial
statement  carrying  amounts  and  tax  bases  of  assets  and  liabilities  and
accordingly,  the Company did not have any deferred assets and liabilities as of
March 31, 2005 and December 31, 2004 respectively.

NOTE 8 - SUPPLEMENTAL DISCLOSURES OF CASH FLOWS

The Company  prepares its statements of cash flows using the indirect  method as
defined under the Financial Accounting Standard No. 95.

The Company paid $0 for income tax in the periods ended March 31, 2005 and 2004.
The Company  paid $0 for  interest  during the periods  ended March 31, 2005 and
2004.

NOTE 9 - EARNINGS PER SHARE

Earnings  per share for the three  months  period ended March 31, 2005 and 2004,
were  determined by dividing net income for the periods by the weighted  average
number  of both  basic and  diluted  shares of  common  stock and  common  stock
equivalents outstanding. Weighted average number of shares used to compute basic
and diluted  loss per share is the same since the effect of dilutive  securities
is anti-dilutive.
















                                       10
<PAGE>

NOTE 10 - RECLASSIFICATIONS

Certain  prior period  amounts have been  reclassified  to conform to the period
ended March 31, 2005 presentation.

NOTE 11 - CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

The Company's operations are carried out in the PRC. Accordingly,  the Company's
business, financial condition and results of operations may be influenced by the
political,  economic and legal  environments in the PRC, by the general state of
the PRC's  economy.  The  Company's  business  may be  influenced  by changes in
governmental  policies with respect to laws and  regulations,  anti-inflationary
measures,  currency  conversion and remittance  abroad, and rates and methods of
taxation, among other things.

NOTE 12 - RESTATEMENT

Subsequent to the issuance of the Company's  quarterly return on Form 10-QSB for
the three  months  ended March 31,  2005,  the Company  determined  that certain
transactions and presentation in the financial statements had not been accounted
for properly in the Company's  consolidated  financial  statements for the three
months ended March 31, 2005. Specifically,  the amount of financial advisory fee
amounting to $640,000 had been omitted and accordingly, merger cost had not been
recorded in the books and records.  Besides,  the sale of 590,283  shares of the
Company's  restricted  common  stock for  $1.6941  per  share for total  cash of
$1,000,000  had been  omitted  and as a result,  the cash and cash  equivalents,
share capital and additional paid-in capital had been understated.

The Company has restated its  consolidated  financial  statements  for the three
months ended March 31, 2005 for these adjustments. The effect of the corrections
of the above-mentioned errors is as follows:-

                                                As previously
                                                 reported ($)   As restated ($)
                                               ---------------  ---------------

Consolidated Balance Sheet
--------------------------
Current Assets
  Cash & cash equivalents                              23,374         1,023,374
  Due from shareholder/director                       188,844           240,390
  Due from related company                             32,892               530
  Total current assets                              8,252,142         9,271,326

Current Liabilities
  Accrued expenses and other payables                 780,446         1,034,811
  Amount due to a shareholder                         465,371           670,190
  Total current liabilities                         2,982,478         3,441,662
Minority Interest                                           0           726,583
Shareholders' Equity
  Common stock                                         11,784            12,375
  Additional paid-in capital                          400,956         1,485,907
  Accumulated other comprehensive income                 --              20,260
  Statutory reserves                                  576,322           784,628
  Retained earnings                                 4,727,128         3,903,739
  Total shareholders' equity                        5,716,190         6,206,909
Consolidated Statement of Operations
Operating expenses
  General and administrative expenses                (718,337)         (518,337)
Non-operating income (expenses)
  Merger cost                                            --            (640,000)
Extraordinary income
  Negative goodwill written back                    4,126,472              --
  Other payable written back                          126,530              --
Net income                                          4,914,772           221,770
Basic and diluted weighted average shares
  outstanding                                      11,784,520        12,374,903
Basic and diluted earnings per share                     0.42              0.02

                                       11

<PAGE>




Consolidate Statement of Cash Flows
-----------------------------------
Cash flows from operating activities:
  Net income                                        1,532,373           221,770
  Transfer to statutory reserve                         1,277              --
  Other receivable                                    (56,690)             --
  Deposit and prepayment                              124,467            67,777
  Accrued liabilities                                 525,585           768,522
  Income tax                                         (253,785)          469,890
  Due to shareholders                                (232,077)          171,159
  Due to related companies                               --            (403,236)
  Due from directors/shareholder                     (233,991)         (233,461)
  Due from related party                                 --                (530)
  Minority interest                                      --             146,928
Net cash provided by (used in) operating activities   (14,163)         (212,503)
Cash flow from Investing Activities
  Cash acquired from reverse acquisition of Tailong      --              38,065
Cash flows from financing activities:

  Issuance of shares for cash                            --           1,000,000








                                       12
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The  following  discussion  should  be read in  conjunction  with the  unaudited
condensed  consolidated financial statements and notes thereto set forth in Item
1of  this  Quarterly  Report.  In  addition  to  historical  information,   this
discussion and analysis contains forward-looking  statements that involve risks,
uncertainties  and  assumptions,  which  could  cause  actual  results to differ
materially from Management's expectations.  Factors that could cause differences
include,  but are not  limited  to,  expected  market  demand for the  Company's
services,  fluctuations  in pricing for products  distributed by the Company and
services  offered  by  competitors,   as  well  as  general  conditions  of  the
fertilizers marketplace.

Caution Regarding Forward-Looking Information
---------------------------------------------

Certain  statements  contained  in this  quarterly  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and words of similar importance,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include,  among others,  the following:  insufficient  funds; short
operating history;  governmental requirement; the loss of significant customers;
the Company's  dependency on only one factory,  a few suppliers;  the ability of
the  Company  to  sustain  or  manage  its  growth;   raw  material   costs  and
availability;  the  ability to protect  technology;  the  ability to attract and
retain qualified  personnel;  limited insurance  coverage,  weather  conditions,
business disruptions;  safety risks;  competition;  China's entry into the World
Trade Organization, new product development and introduction;  existing laws and
regulations and changes in, or the failure to comply with, laws and regulations;
change  in  China's  economic  reform  policies,  nationalization,  governmental
control on currency conversion and fluctuation of the Renminbi,  downturn in the
Chinese  economy,  any  occurrence  of  serious  infectious  diseases,   adverse
publicity; fluctuations and difficulty in forecasting operating results; changes
in business strategy or development  plans; and other factors referenced in this
and previous filings.

Given  these  uncertainties,  readers  of this Form  10-QSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

Results of operations The three months ended March 31, 2005 Compared to 2004

Revenue
-------

Our revenue of $4,985,120 and $2,161,774 for the period ended March 31, 2005 and
2004 represent sales of fertilizers.  Total sales amount  increased by 130% from
$2,161,774  for the period  ended  March 31, 2004 to  $4,985,120  for the period
ended March 31, 2005 mainly  because of the increase in sales volume since there



                                       13
<PAGE>

are few  competitors  in the  Company's  selected  markets  capable of producing
customized fertilizers. As a result, the Company can gain competitive advantages
and it expanded its  distribution  channels by developing  integrated  marketing
campaigns through  traditional  media.  Pacific Dragon established the market in
southern China in 2004.

Selling expenses
----------------

Total selling expenses increased by 65% from $222,594 for the period ended March
31, 2004 to $366,814 for the period  ended March 31, 2005 mainly  because of the
increase in business trips and  entertainment  for salesman and sales commission
which were in line with increase in sales.

General and administrative expenses
-----------------------------------

Total general and administrative  expenses increased by 282.2% from $135,622 for
the period  ended March 31, 2004 to $518,337 for the period ended March 31, 2005
and this was mainly  because of the  increase in rental  expenses  since the old
factory building collapsed in year ended December 31, 2004.

Income from Operations
----------------------

For the three  months  ended  March 31,  2005,  the  Company  had an income from
operations of  $1,532,367  as compared to an income from  operations of $707,273
for the three  months  ended  March  31,  2004.  The  increase  in  income  from
operations is attributable to increase in sales of $2,823,346.

Merger cost
-----------

For the period  ended  March 31,  2005,  the  Company  reported  merger  cost of
$640,000  incurred in relation to the  combination  with  Tailong on February 3,
2005 as further  described in Note 1 "Organization  and Description of Business"
above. No merger cost was incurred by the Company for the period ended March 31,
2004.

Accounts receivable and provision for doubtful debt
---------------------------------------------------

The  accounts  receivable  increased by 37% from  $5,559,437  for the year ended
December 31, 2004 to  $7,626,581  for the period ended March 31, 2005.  This was
mainly  because of the  increase  in sales for the period  ended  March 31, 2005
compared to period ended March 31, 2004 and the long credit period. Though based
on the company's credit policy, customers may theoretically be allowed to settle
in a period  up to 3 years  (product's  life  cycle).  In view of the  customary
business practices in China, we consider that such a long credit period, usually
over 1.5 years, is still within the normal credit and policy terms.




                                       14
<PAGE>

Provision for income taxes
--------------------------

The provision for income taxes increased by 96% from $485,812 for the year ended
December  31, 2004 to $955,702  for the period  ended March 31,  2005.  This was
mainly because of increase in income from  operations for the period ended March
31, 2005 and therefore additional provision for income taxes was required.

Minority interest
-----------------

For the period ended March 31, 2004, minority interest represented the profit of
the Company attributable to the 10% equity interest not owned by the Company. No
minority  interest  was  recorded  for year  ended  December  31,2004 as all the
shareholders collectively own 100% of Harebing Yinglong Enterprises Co. Ltd. And
China Tailong Holdings Co. Ltd.

Financial condition, liquidity, capital resources
-------------------------------------------------

For the period ended March 31, 2005, we used $14,163 from  operating  activities
and we used $528 to purchase property, plant and equipment.

On February 3, 2005,  and following the  combination  with Tailong,  the Company
completed the sale of 590,283  shares of its restricted  common stock  ("Private
Placement Shares") for $1.6941 per share for a total of $1,000,000 to accredited
investors pursuant to the stock purchase agreement dated February 3, 2005. As of
March 31, 2005, the funds of $1,000,000  from the sale of the Private  Placement
Shares were placed in escrow with the escrow agent.

As of March 31, 2005,  the Company has cash and cash  equivalents of $1,023,374.
Our current assets were $9,066,507 and our current  liabilities were $3,064,085,
which  resulted  in a  current  ratio of  2.96.  We had no  capital  expenditure
commitments  outstanding as of March 31, 2005.  Since the Company has a positive
working capital, management believes that there is currently not a going concern
issue.

The  Company's  need for  capital  may  change  dramatically  as a result of any
business acquisition or combination transaction.  There can be no assurance that
the Company will  identify any such  business,  product,  technology  or company
suitable for acquisition in the future.  Further, there can be no assurance that
the Company would be successful in  consummating  any  acquisition  on favorable
terms  or that it will be able  to  profitably  manage  the  business,  product,
technology or company it acquires.

Risks Related to Our Business and Industry

WE MAY NEED ADDITIONAL CAPITAL.

Based on  current  reserves  and  anticipated  cash  flow  from  operations,  we
currently  anticipate  that the  available  funds will be sufficient to meet our
anticipated  needs  for  working  capital,  capital  expenditures  and  business
expansion.  Thereafter,  we may need to raise  additional  funds  because we are
considering the possibility of setting up a farm products supermarket by the end
of 2005. If any of our assumptions  are incorrect,  we may need to raise capital
before the end of 2005. If additional  funds are raised  through the issuance of
equity  or  convertible  debt  securities,   the  percentage  ownership  of  our
stockholders will be reduced,  stockholders may experience  additional  dilution



                                       15
<PAGE>

and such securities may have rights,  preferences and privileges senior to those
of our common stock. There can be no assurance that additional financing will be
available  on  terms  favorable  to us or at  all.  If  adequate  funds  are not
available or are not available on acceptable  terms,  we may not be able to fund
expansion, take advantage of unanticipated acquisition opportunities, develop or
enhance services or products or respond to competitive pressures. Such inability
could have a material adverse effect on our business,  results of operations and
financial condition.

WE ARE THE  PRODUCT  OF A RECENT  REORGANIZATION,  AND HAVE A LIMITED  OPERATING
HISTORY ON WHICH TO EVALUATE OUR POTENTIAL FOR FUTURE SUCCESS.

On February 3, 2005, we completed a  reorganization  with Tailong pursuant to an
Agreement and Plan of Reorganization (the "Reorganization Agreement"). We intend
on continuing  the business  operations of Tailong in the PRC through its ninety
percent  owned  subsidiary,  Pacific  Dragon.  We have only a limited  operating
history as a combined  company  upon which you can  evaluate  our  business  and
prospects,  and we have yet to develop  sufficient  experience  regarding actual
revenues to be received from our combined operations.

You  must  consider  the  risks  and  uncertainties  frequently  encountered  by
companies in situations  such as ours,  including but not limited to the ability
to  grow  and  prosper  and  finance  such  growth.  If we are  unsuccessful  in
addressing these risks and  uncertainties,  our business,  results of operations
and financial condition will be materially and adversely affected.

OUR FERTILIZER  REGISTRATION  CERTIFICATE IS SUBJECT TO GOVERNMENTAL CONTROL AND
RENEWAL.

To produce  fertilizer  in China,  the  manufacturer  must  obtain a  Fertilizer
Registration  Certificate  issued by the  Ministry of  Agriculture  of PRC.  The
registration may be interim or formal. The interim registration is valid for one
year and  applies  to  fertilizer  in the  stage of  in-the-field  test and test
selling.  All  fertilizers  that can be sold on the market  upon  completion  of
in-the-field  test and test  selling  must be  formally  registered.  The formal
Fertilizer  Registration  Certificate  is valid for five years.  Within 6 months
before the formal Fertilizer  Registration  Certificate expires, the manufacture
may apply for  renewal.  If the  Ministry of  Agriculture  of PRC  approves  the
renewal  application,  the  registration  will be valid for another  five years.
Pacific Dragon holds a Formal Fertilizer Registration  Certificate issued by the
Ministry  of  Agriculture  of PRC on  September  3,  2002 and the  certificate's
expiration  date is December,  2007.  Although the Ministry of Agriculture  will
almost  always  approve the  application  for  renewal of the Formal  Fertilizer
Registration  Certificate,  there is no guarantee  that  Pacific  Dragon will be
granted the renewal.





                                       16
<PAGE>

WE SELL OVER 58% OF OUR PRODUCTS TO A CONCENTRATED NUMBER OF DISTRIBUTORS.

Currently we sell 58% of our  fertilizer  products  through our ten  established
major  distributors.  If we lose any one of these  relationships  with our major
distributors,  we will  have  difficulties  finding  new major  distributors  to
distribute  our  products  which would have a negative  impact on our  business.
Further,  our dependence on a few large  distributors could make it difficult to
negotiate  attractive prices for our products and could expose us to the risk of
substantial losses if our distributors stop conducting  business with us. We are
also subject to additional risks of such a concentrated  distributor base to the
extent such distributors do not make timely payments or any payments at all.

WE ARE DEPENDENT ON CERTAIN KEY PERSONNEL.

We are currently  highly  dependent upon the ability and experience of Chang Yu,
our CEO, President and chairman of the Board of Directors. Chang Yu entered into
an Employment  Contract with Tailong for the term of three years from January 6,
2005 to  January  5,  2008.  There can be no  assurance  that we will be able to
retain this officer after the expiration of the term of the Employment  Contract
with him. The loss of this officer could have a material  adverse  effect on our
business,  financial  condition  and  results of  operations.  We must  attract,
recruit and retain a sizeable workforce of technically competent employees.  Our
ability to effectively  implement our business  strategy will depend upon, among
other factors,  the successful  recruitment  and retention of additional  highly
skilled and  experienced  management and other key  personnel.  We cannot assure
that we will be able to hire or retain such employees.

WE DEPEND ON ONLY ONE FACTORY TO MANUFACTURE OUR PRODUCTS.

We  conduct  all of our  operations  from one  factory  in  Harbin,  China.  Any
disruption of the operations in the factory could have a negative  impact on our
business.  We currently maintain insurance to protect against damage and loss of
our manufacturing facility, machinery and other leasehold improvements. However,
any material damage to, or the loss of, the factory due to fire, severe weather,
flooding or other cause,  would have a material  adverse effect on our financial
condition, business and prospects.

THE FAILURE TO MANAGE  GROWTH  EFFECTIVELY  COULD HAVE AN ADVERSE  EFFECT ON OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

If we are  successful  in obtaining  rapid market  growth of our organic  liquid
compound  fertilizers,  we will be required to deliver  large volumes of quality
products to customers on a timely basis at a reasonable cost to those customers.
Such demand can also create working  capital issues for us, as we need increased
liquidity to fund  purchases of raw materials and  supplies.  We cannot  assure,
however,  that  business  will  rapidly  grow  or that  our  efforts  to  expand
manufacturing and quality control  activities will be successful or that we will
be able to satisfy  commercial  scale  production  requirements  on a timely and
cost-effective  basis.  We will  also be  required  to  continue  improving  our
operations, management and financial systems and controls. The failure to manage
growth  effectively  could have an  adverse  effect on our  business,  financial
condition and results of operations.




                                       17
<PAGE>

WE DEPEND ON A FEW SUPPLIERS AND ANY DISRUPTION WITH OUR SUPPLIERS COULD HAVE AN
ADVERSE EFFECT ON OUR BUSINESS.

We depend on a few suppliers, and any disruption with those suppliers could have
an adverse effect on our business. We have developed relationships with a single
or limited  number of  suppliers  for  materials  that are  otherwise  generally
available. We have volume purchase agreements with our major suppliers. Although
we believe that  alternative  suppliers are available to supply  materials,  any
interruption  in the supply from any supplier could delay product  shipments and
adversely affect our relationships with our customers.

WE CANNOT CONTROL THE COST OF OUR RAW MATERIALS  WHICH MAY ADVERSELY  IMPACT OUR
PROFIT MARGIN AND FINANCIAL POSITION.

The main raw  materials  of our  products  are humic acid and other  organic and
inorganic elements. Our main suppliers of humic acid, chemical raw materials and
plastic goods (i.e. plastic bottles and barrels) are  Inner-Mongolia  Humic Acid
Factory,  Beijing  Zhongxin  Chemical  Industry  and  Technological  Development
Company,  Harbin office of Mudanjiang  Longjiang Chemical Industry Factory,  and
Harbin Huangyan Plastic Manufacturing Company,  respectively. The prices for our
raw materials are subject to market forces largely beyond our control, including
energy costs, organic chemical feedstocks, market demand, and freight costs. The
prices for these raw materials may vary  significantly in the future. We may not
be able to adjust our product  prices,  especially in the short term, to recover
the increased  costs in these raw  materials.  Our future  profitability  may be
adversely  affected  to the extent we are unable to pass on higher raw  material
and energy costs to our customers.  Further, the quality of the raw materials is
also beyond our control. If the quality of these raw materials is poor, it could
have an adverse effect on our business.

OUR BUSINESS IS HIGHLY DEPENDENT UPON PROPRIETARY TECHNOLOGIES.

Our business is highly  dependent  upon  proprietary  technologies.  Our success
depends on the knowledge, ability, experience and technological expertise of our
employees  and  on  the  legal  protection  of  proprietary   rights.  We  claim
proprietary rights in various unpatented  technologies,  know-how, trade secrets
and  trademarks  relating to products  and  manufacturing  processes.  We cannot
guarantee the degree of protection  these various claims may or will afford,  or
that competitors will not independently  develop or patent technologies that are
substantially  equivalent  or  superior  to  our  technology.   We  protect  our
proprietary   rights  in  our  products  and  operations   through   contractual
obligations,  including  nondisclosure  agreements.  There  is a  non-disclosure
clause in the License  Agreement  between Pacific Dragon and Chang Yu. There can
be no assurance as to the degree of protection these contractual measures may or
will afford.  We do not have patents  issued or patent  applications  pending in
China.  If we are found to be infringing  third party  patents,  there can be no
assurance  that we will be able to obtain  licenses with respect to such patents
on acceptable  terms, if at all. The failure to obtain necessary  licenses could
delay product shipment or the introduction of new products,  and costly attempts
to design around such patents could  foreclose the  development,  manufacture or
sale of products.




                                       18
<PAGE>

WE HAVE LIMITED INSURANCE COVERAGE FOR PRODUCTS DEFECTS.

We offer warranties of our products against any defects of the products. We have
obtained a policy of product  liability  insurance to cover losses from personal
injuries or product  damage caused by our  products.  For the year between March
25, 2004 and March 24, 2005, the insurance limit is RMB4,000,000  [approximately
$483,091]  in total.  Though  there  was no claim in the  past,  in the event we
experienced a  significant  increase in warranty  claims,  there is no assurance
that our insurance  coverage is sufficient.  This could have a material  adverse
effect on our business, financial condition and results of operations.

OUR HOLDING COMPANY STRUCTURE CREATES RESTRICTIONS ON THE PAYMENT OF DIVIDENDS.

Our holding company structure creates  restrictions on the payment of dividends.
We have no direct business  operations,  other than our ownership of Tailong and
Pacific Dragon.  While we have no current intention of paying dividends,  should
we decide in the  future to do so our  ability to pay  dividends  and meet other
obligations depends upon the receipt of dividends or other payments from Tailong
and Pacific Dragon. In addition, Pacific Dragon, our operating subsidiary,  from
time  to  time,  may  be  subject  to   restrictions  on  its  ability  to  make
distributions,   including  as  a  result  of  restrictive   covenants  in  loan
agreements,  restrictions on the conversion of local currency into U.S.  dollars
or other hard currency and other  regulatory  restrictions.  If future dividends
are paid in Renminbi,  fluctuations  in the exchange rate for the  conversion of
Renminbi  into U.S.  dollars may  adversely  affect the amount  received by U.S.
stockholders upon conversion of the dividend payment into U.S. dollars.

WE MAY SUFFER AS A RESULT OF WEATHER CONDITIONS.

Weather may cause a major  adverse  effect on demand for our  products.  Weather
conditions may delay the application of fertilizer or render it unnecessary.  If
any natural disaster such as flood, draught,  hail, tornado, or earthquake takes
place, crop yields will be adversely  impacted.  We in some cases will allow our
distributors  to  purchase  products   partially  on  credit.   Similarly,   the
distributors  may sell the  fertilizer  to farmers  partially on credit.  If any
natural  disaster  occurs,  our  distributors  will not be able to  collect  the
payments from the farmers.  As a result, we may suffer  financially due to delay
or failure of repayment.

ANY MATERIAL  DISRUPTION OR SLOWDOWN IN OUR ORDER  PROCESSING  SYSTEMS MAY CAUSE
ORDERS TO BE LOST OR TO BE SHIPPED OR DELIVERED LATE.

Any material  disruption or slowdown in our order processing  systems  resulting
from labor  disputes,  mechanical  problems,  human  error or  accidents,  fire,
natural  disasters,  or  comparable  events could cause delays in our ability to
receive and  distribute  orders and may cause orders to be lost or to be shipped
or delivered  late. As a result,  customers may cancel orders or reject goods on
account of late  shipments,  which would  result in a reduction of net sales and
could increase administrative and shipping costs.






                                       19
<PAGE>

FERTILIZERS POSE CERTAIN SAFETY RISKS THAT COULD AFFECT OUR BUSINESS.

Manufacturing  of  fertilizers  poses certain safety risks that could affect our
business. Although we incorporate safety procedures in research, development and
manufacturing  processes that are designed to minimize  safety risks,  we cannot
assure that accidents will not occur. Any accident, whether at the manufacturing
facilities or from the use of the products, may result in significant production
delays or claims for  damages  resulting  from  injuries.  These types of losses
could have a material  adverse effect on our business,  financial  condition and
results of operations.

THE FERTILIZER BUSINESS IS HIGHLY COMPETITIVE.

Despite having  advanced  technology  and producing high quality  organic liquid
compound  fertilizers,  we face competition from domestic competitors as well as
multinational fertilizer producers. Competition is based on a variety of factors
including  maintenance  of  product  quality,   competitive  pricing,   delivery
efficiency,  customer  service  and  satisfaction  levels  and  the  ability  to
anticipate   technological   changes.   We  are  subject  to  competition   from
approximately 300 domestic small-sized fertilizer  manufacturers.  The number of
these small  companies  changes  from time to time.  If their  numbers  increase
significantly,  our sales and profits may be adversely affected. Our competitors
also  include  some   manufacturers   that  produce  poor  quality   fertilizers
counterfeiting our trademark. These counterfeit products damage our good will in
the market and may  adversely  affect our business.  Furthermore,  we are facing
more severe  competition  from  international  producers  and traders who import
fertilizers  into China from abroad.  The products  that are imported and traded
range from single chemical elements like urea,  phosphate and potash to standard
nitrogen  phosphate,  potassium  ("NPK")  compound  fertilizers.   Qualities  of
imported   products  are   generally   higher  and  more  stable  than  domestic
fertilizers.

WE MAY SUFFER AS A RESULT OF CHINA'S  ENTRY  INTO THE WORLD  TRADE  ORGANIZATION
(WTO).

After China was  accepted  into the WTO,  the Chinese  government  has  lessened
protection for the domestic fertilizer manufacturing industry.  According to the
commitment of Chinese government, by December 11, 2006, the retail and wholesale
markets of fertilizer  will be open to foreign  companies.  This will  adversely
affect the  profitability  of the domestic  fertilizer  industry in China.  This
industry will be further adversely  impacted because China will gradually reduce
tariff  and  quota  for  foreign   chemical   fertilizers  due  to  China's  WTO
commitments.  As a result,  fertilizer import to China will arise  significantly
after  China's  accession  of  WTO  and  foreign  fertilizer   manufactures  and
distributors  may  directly  compete  with  domestic  fertilizer   manufactures.
Competition in the fertilizer market in China will be continuously increased.




                                       20
<PAGE>

WE MAY NOT BE SUCCESSFUL IN DEVELOPING AND INTRODUCING NEW PRODUCTS.

We are developing new products such as Magic  Nutrition  Organic  Seeding Plate.
But we cannot  guarantee  that the  attempt to develop  and  introduce  such new
products will be successful.  If the attempt  fails,  we will not get any return
for the cost of research and development.

Risks Related to Doing Business in China

Pacific Dragon operates from facilities that are located in China.  Accordingly,
its operations must conform to the governmental regulations and rules of China.

THE PRC LEGAL  SYSTEM HAS  INHERENT  UNCERTAINTIES  THAT  COULD  LIMIT THE LEGAL
PROTECTIONS AVAILABLE.

The Chinese 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  the  late  1970s,  the  Chinese  government  began  to
promulgate a comprehensive  system of laws and regulations  governing commercial
matters.  The overall effect of  legislation  enacted over the past 20 years has
significantly  enhanced the protections afforded to foreign invested enterprises
in China. However, these laws, regulations and legal requirements are relatively
recent  and are  evolving  rapidly,  and their  interpretation  and  enforcement
involve  uncertainties.  These  uncertainties  could limit the legal protections
available to foreign investors.

The  practical  effect of the PRC's legal system on our business  operations  in
China can be viewed from two separate but intertwined considerations.  First, as
a matter of  substantive  law,  the Foreign  Invested  Enterprise  laws  provide
significant  protection from government  interference.  In addition,  these laws
guarantee the full enjoyment of the benefits of corporate articles and contracts
to Foreign Invested  Enterprise  participants.  These laws,  however,  do impose
standards  concerning   corporate  formation  and  governance,   which  are  not
qualitatively  different from the  corporation  laws found in the United States.
Similarly,  PRC accounting laws mandate accounting  practices,  which may not be
consistent  with  US  Generally  Accepted  Accounting   Principles.   The  China
accounting  laws  require  that an  annual  "statutory  audit" be  performed  in
accordance  with PRC  accounting  standards  and that the  books of  account  of
Foreign   Invested   Enterprises  are  maintained  in  accordance  with  Chinese
accounting  laws.  Article 14 of the PRC  Wholly  Foreign-Owned  Enterprise  Law
requires a Wholly  Foreign-Owned  Enterprise to submit certain  periodic  fiscal
reports and statements to designate  financial and tax authorities,  at the risk
of business license revocation.

Second,  while the enforcement of substantive  rights may appear less clear than
United States procedures,  Foreign Invested Enterprises and Wholly Foreign-Owned
Enterprises are Chinese registered companies that enjoy the same status as other
Chinese registered  companies in  business-to-business  dispute resolution.  The
Chinese legal  infrastructure  is significantly  different in operation from its
United  States  counterpart,  and may present a  significant  impediment  to the
operation of Foreign Invested Enterprises.

Pacific  Dragon is  organized  under the laws of the PRC and is  governed by its
articles of association.



                                       21
<PAGE>

NEGATIVE IMPACT UPON ECONOMIC REFORM POLICIES OR NATIONALIZATION COULD RESULT IN
A TOTAL INVESTMENT LOSS IN OUR COMMON STOCK.

Since 1979, the Chinese  government has reformed its economic  systems.  Because
many reforms are unprecedented or experimental,  they are expected to be refined
and improved.  Other political,  economic and social factors,  such as political
changes, changes in the rates of economic growth,  unemployment or inflation, or
in the disparities in per capita wealth between regions within China, could lead
to further  readjustment of the reform measures.  This refining and readjustment
process may negatively affect our operations.

Although the Chinese government owns the majority of productive assets in China,
including  mines and quarrying  sites,  in the past several years the government
has implemented  economic reform  measures that emphasize  decentralization  and
encourage private economic activity.  Because these economic reform measures may
be inconsistent or ineffectual, there are no assurances that:

         -        We will be able to capitalize on economic reforms;
         -        The Chinese  government  will continue its pursuit of economic
                  reform  policies;
         -        The economic policies, even if pursued, will be successful;
         -        Economic policies will not be significantly  altered from time
                  to time; and
         -        Business  operations  in China will not become  subject to the
                  risk of nationalization.

Over the last few years,  China's  economy has  registered  a high growth  rate.
Recently, there have been indications that rates of inflation have increased. In
response,  the  Chinese  government  recently  has taken  measures  to curb this
excessively expansive economy.  These measures have included restrictions on the
availability of domestic credit,  reducing the purchasing  capability of certain
of its  customers,  and limited  re-centralization  of the approval  process for
purchases of some foreign products. These austere measures alone may not succeed
in slowing down the economy's excessive expansion or control inflation,  and may
result in severe dislocations in the Chinese economy. The Chinese government may
adopt   additional   measures  to  further  combat   inflation,   including  the
establishment  of freezes or  restraints on certain  projects or markets.  These
measures may adversely affect our operations.

There can be no  assurance  that the  reforms to China's  economic  system  will
continue  or that we will  not be  adversely  affected  by  changes  in  China's
political,  economic,  and social  conditions  and by changes in policies of the
Chinese government, such as changes in laws and regulations,  measures which may
be introduced to control  inflation,  changes in the rate or method of taxation,
imposition of additional  restrictions  on currency  conversion  and  remittance
abroad, and reduction in tariff protection and other import restrictions.

YOU MAY EXPERIENCE DIFFICULTIES IN EFFECTING SERVICE OF LEGAL PROCESS, ENFORCING
FOREIGN JUDGMENTS OR BRINGING ORIGINAL ACTIONS IN THE PRC BASED ON U.S. OR OTHER
FOREIGN LAW AGAINST OUR MANAGEMENT AND US.

Pacific Dragon,  our operating  company,  is incorporated  under the laws of the
PRC,  and  substantially  all of our assets are located in the PRC. In addition,
many of our directors,  managers,  and executive officers reside within the PRC,
and substantially all of the assets of these persons are located within the PRC.



                                       22
<PAGE>

As a result,  it may not be  possible  to effect  service of process  within the
United States or elsewhere outside the PRC upon certain  directors,  supervisors
or executive  officers,  including  with respect to matters  arising  under U.S.
federal securities laws or applicable state securities laws.  Moreover,  the PRC
does not have treaties providing for the reciprocal  recognition and enforcement
of judgments of courts with the United States, the United Kingdom, Japan or many
other  countries.  As a  result,  recognition  and  enforcement  in  the  PRC of
judgments  of a court in the United  States  and any of the other  jurisdictions
mentioned  above in  relation  to any matter  may be  difficult  or  impossible.
Furthermore,  an  original  action  may be brought  in the PRC  against  us, our
directors,  managers, or executive officers only if the actions are not required
to be arbitrated by PRC law and Pacific  Dragon's  articles of association,  and
only if the facts alleged in the complaint  give rise to a cause of action under
PRC law. In  connection  with any such  original  action,  a PRC court may award
civil liability, including monetary damages.

GOVERNMENT  CONTROL OF CURRENCY  CONVERSION AND THE  FLUCTUATION OF THE RENMINBI
MAY MATERIALLY AND ADVERSELY AFFECT OUR OPERATIONS AND FINANCIAL RESULTS AS WELL
AS THE VALUE OF OUR SECURITIES.

We receive substantially all of our revenues in Renminbi, which currently is not
a freely  convertible  currency.  The Chinese government may, at its discretion,
restrict  access  in the  future  to  foreign  currencies  for  current  account
transactions.  If this were to  occur,  we may not be able to pay  dividends  in
foreign currencies to our shareholders.

The  value  of the  Renminbi  against  the  U.S.  dollar  and  other  currencies
fluctuates  and is  affected  by,  among  other  things,  changes  in the  PRC's
political and economic  conditions.  Since 1994, the conversion of Renminbi into
foreign  currencies,  including  Hong Kong and U.S.  dollars,  has been based on
rates  set by the  People's  Bank of China,  which  are set  daily  based on the
previous day's  inter-bank  foreign  exchange market rates and current  exchange
rates on the world financial markets. Since 1994, the official exchange rate for
the  conversion  of Renminbi to U.S.  Dollars  generally  has been  stable.  Any
devaluation of the Renminbi,  however,  may materially and adversely  affect the
value of, and any dividends  payable on, our shares in foreign  currency  terms,
since  we will  receive  substantially  all of our  revenues,  and  express  our
profits, in Renminbi. Our financial condition and results of operations also may
be  affected  by  changes  in the value of  certain  currencies  other  than the
Renminbi.  Our results may be adversely affected by changes in the political and
social conditions in the PRC, and changes in governmental  policies with respect
to laws and regulations,  anti-inflationary  measures,  currency  conversion and
remittance abroad, and rates and methods of taxation, among other things.

A DOWNTURN IN THE CHINESE ECONOMY MAY SLOW DOWN OUR GROWTH AND PROFITABILITY.

The growth of the Chinese economy has been uneven across geographic  regions and
economic sectors.  For example,  during the years between 1978 and 2000, the per
capital GDP growth rate of Fujian  Province in  Southeastern  China is 12% while
that of  Gansu  Province  in  Northwestern  China  is 5.3%  (Source:  New  China



                                       23
<PAGE>

Statistical   Materials   Compilation   for  50  Years  and  2001  China  Annual
Statistics).  There can be no assurance that growth of the Chinese  economy will
be steady or that any downturn will not have a negative  effect on our business.
Our  profitability  may decrease due to a downturn in the Chinese economy.  More
specifically, the expansion of our sales area in the less economically developed
central and western provinces of China will depend on those provinces  achieving
certain income levels.

ANY  OCCURRENCE  OF SERIOUS  INFECTIOUS  DISEASES,  SUCH AS RECURRENCE OF SEVERE
ACUTE  RESPIRATORY  SYNDROME (SARS) CAUSING  WIDESPREAD  PUBLIC HEALTH PROBLEMS,
COULD ADVERSELY AFFECT OUR BUSINESS AND RESULTS OF OPERATIONS.

A renewed outbreak of SARS or other widespread  public health problems in China,
where all of our revenue is derived,  and in Harbin,  where our  operations  are
headquartered,  could have a negative effect on our  operations.  Our operations
may be  impacted by a number of public  health-related  factors,  including  the
following:

         o        quarantines or closures of our factories or subsidiaries which
                  would severely disrupt its operations;

         o        the sickness or death of the key officers and employees; and

         o        general slowdown in the Chinese economy.

Any of the foregoing  events or other  unforeseen  consequences of public health
problems could adversely affect our business and results of operations.

CHINA IS EXPERIENCING SIGNIFICANT SOCIAL CHANGE

China faces a "major threat" from a growing gender  imbalance.  According to the
findings of China's fifth national census,  conducted in 2000, the ratio between
female and male  newborns is 100 to 117 on national  average.  This ratio is far
beyond the normal ratio of 100 females to 104-107 males (Source:  People's Daily
Online, May 26, 2004. http://English.people.com.cn/200405/26/eng20040526_144450.
html).  The  severe  imbalance  between  males and  females  in China  will have
enormous  impact on China in the future years to come.  It is estimated  that by
2020,  the number of marriage  age men will  exceed the number of  marriage  age
women by 30,000,000 to 40,000,000.  The skewed ratio of men to women may lead to
social  instability  and upheaval.  Our business may suffer if this imbalance is
not rectified.

WE MAY SUFFER AS A RESULT OF ADDITIONAL ENVIRONMENTAL REGULATION

National, provincial and local laws impose various environmental controls on the
manufacture, storage, use and disposal of fertilizer and/or of certain chemicals
used in the  manufacture of fertilizer.  Although we believe that our operations
are in substantial compliance with current environmental regulations,  there can
be no assurance that changes in such laws and regulations will not impose costly
compliance requirements on us or otherwise subject us to future liabilities.  In
addition,   China  is  experiencing   substantial  problems  with  environmental
pollution.  Accordingly,  it is likely that the national,  provincial  and local
governmental  agencies will adopt stricter pollution  controls.  There can be no



                                       24
<PAGE>

assurance that additional or modified  regulations  relating to the manufacture,
transportation,  storage,  use and disposal of materials used to manufacture our
products or restricting  disposal of any waste will not be imposed. Our business
may be  adversely  affected  if  additional  or modified  environmental  control
regulations are imposed upon us.

Risks Related to Our Common Stock

THE MARKET PRICE FOR OUR COMMON STOCK MAY BE VOLATILE.

The  market  price for our  common  stock is likely  to be highly  volatile  and
subject to wide fluctuations in response to factors including the following:

         o        actual or anticipated  fluctuations in our quarterly operating
                  results,

         o        announcements of new products by us or our competitors,

         o        changes in financial estimates by securities analysts,

         o        conditions in the fertilizer market,

         o        changes in the economic  performance  or market  valuations of
                  other companies involved in fertilizer production,

         o        announcements by our competitors of significant  acquisitions,
                  strategic partnerships, joint ventures or capital commitments,

         o        additions or departures of key personnel, or

         o        potential litigation,

In  addition,  the  securities  markets  have  from  time  to  time  experienced
significant price and volume  fluctuations that are not related to the operating
performance  of  particular  companies.   These  market  fluctuations  may  also
materially and adversely affect the market price of our common stock.

STOCKHOLDERS COULD EXPERIENCE SUBSTANTIAL DILUTION.

We may issue additional shares of our capital stock to raise additional cash for
working  capital.  If we issue  additional  shares  of our  capital  stock,  our
stockholders will experience dilution in their respective  percentage  ownership
in us.

A  LARGE  PORTION  OF OUR  COMMON  STOCK  IS  CONTROLLED  BY A SMALL  NUMBER  OF
STOCKHOLDERS.

A large  portion of our common stock is held by a small number of  stockholders.
For instance,  Chang Yu holds 77% of the Company's common stock,  Timothy Halter
holds 6.5%, Xiaorong Teng and Wong Tak Shing Eddie each holds 4.3%. As a result,
these  stockholders  are able to influence the outcome of  stockholder  votes on



                                       25
<PAGE>

various  matters,  including  the  election  of  directors  and other  corporate
transactions  including business  combinations.  In addition,  the occurrence of
sales of a large number of shares of our common stock,  or the  perception  that
these sales could occur, may affect our stock price and could impair our ability
to obtain capital  through an offering of equity  securities.  Furthermore,  the
current  ratios of  ownership  of our common  stock  reduce the public float and
liquidity  of our common  stock which can in turn affect the market price of our
common stock.

THERE IS CURRENTLY A LIMITED TRADING MARKET FOR OUR COMMON STOCK.

Our  common  stock  is  traded  in  the  over-the-counter   market  through  the
Over-the-Counter  Electronic  Bulletin  Board.  While there is an active trading
market for our common stock it is small. Further, there can be no assurance that
an active  trading  market  will be  maintained.  We cannot  assure you that our
common stock will ever be included for trading on any stock  exchange or through
any other quotation  system  (including,  without  limitation,  the NASDAQ Stock
Market).

WE ARE LIKELY TO REMAIN SUBJECT TO "PENNY STOCK" REGULATIONS.

As long as the trading  price of our common stock is below $5.00 per share,  the
open-market  trading  of our common  stock will be subject to the "penny  stock"
rules. The "penny stock" rules impose additional sales practice  requirements on
broker-dealers  who sell securities to persons other than established  customers
and accredited investors (generally those with assets in excess of $1,000,000 or
annual income exceeding  $200,000 or $300,000  together with their spouse).  For
transactions  covered  by these  rules,  the  broker-dealer  must make a special
suitability  determination  for the purchase of securities and have received the
purchaser's   written   consent  to  the   transaction   before  the   purchase.
Additionally,  for any transaction  involving a penny stock,  unless exempt, the
broker-dealer  must  deliver,  before the  transaction,  a  disclosure  schedule
prescribed by the Securities and Exchange Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered  representative  and current quotations for the
securities.  Finally,  monthly  statements must be sent disclosing  recent price
information  on the limited  market in penny stocks.  These  additional  burdens
imposed on broker-dealers may restrict the ability of broker-dealers to sell the
common stock and may affect a stockholder's ability to resell the common stock.

Stockholders  should  be  aware  that,  according  to  Securities  and  Exchange
Commission  Release No.  34-29093,  the market for penny  stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i) control
of the market for the  security  by one or a few  broker-dealers  that are often
related  to  the  promoter  or  issuer;  (ii)  manipulation  of  prices  through
prearranged  matching  of  purchases  and sales and false and  misleading  press
releases;  (iii) boiler room practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differential and markups by selling broker-dealers;  and (v)
the wholesale  dumping of the same  securities  by promoters and  broker-dealers
after prices have been manipulated to a desired level,  along with the resulting
inevitable  collapse of those prices and with consequent  investor  losses.  Our
management is aware of the abuses that have occurred  historically  in the penny
stock market.




                                       26
<PAGE>

WE ARE RESPONSIBLE FOR THE INDEMNIFICATION OF OUR OFFICERS AND DIRECTORS.

Our  Bylaws  provide  for  the  indemnification  of  our  directors,   officers,
employees, and agents, under certain circumstances,  against attorney's fees and
other  expenses  incurred by them in any litigation to which they become a party
arising  from  their  association  with or  activities  on  behalf  of us.  This
indemnification policy could result in substantial expenditures, which we may be
unable to recoup.

WE HAVE NO PRESENT INTENTION TO PAY DIVIDENDS.

We do not expect to  declare or pay any  dividends  in the  foreseeable  future.
Should we decide in the future to do so, our ability to pay  dividends  and meet
other  obligations  depends upon the receipt of dividends or other payments from
our operating subsidiaries and other holdings and investments.  In addition, our
operating  subsidiaries,  from time to time, may be subject to  restrictions  on
their ability to make  distributions to us, including as a result of restrictive
covenants in loan  agreements,  restrictions on the conversion of local currency
into U.S. dollars or other hard currency and other regulatory  restrictions.  We
intend to retain any future  earnings for working capital and to finance current
operations and expansion of our business.

COMPLIANCE WITH SARBANES-OXLEY ACT

The US Public  Company  Accounting  Reform and Investor  Protection Act of 2002,
better  known as  Sarbanes-Oxley,  is the most  sweeping  legislation  to affect
publicly traded companies in 70 years.  Sarbanes-Oxley  created a set of complex
and burdensome  regulations.  Compliance with such regulations requires hundreds
of  thousands  of dollars,  additional  personnel  and  hundreds of man hours of
effort.  There can be no assurance  that we will have the  personnel,  financial
resources or expertise to comply with these regulations.

ITEM 3 - CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange  Act,  within the 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the participation of the Company's management, including the Company's President
and  Chief  Executive  Officer  and Chief  Financial  Officer.  Based  upon that
evaluation,  the  Company's  President  and Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  are  effective.  There  have  been  no  significant  changes  in the
Company's  internal  controls or in other  factors,  which  could  significantly
affect  internal  controls  subsequent  to the date the Company  carried out its
evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information  required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,



                                       27
<PAGE>

without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive and Chief Financial Officer as appropriate,  to allow timely decisions
regarding required disclosure.

                           PART II. OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

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

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

Pursuant to the Reorganization Agreement (as defined in Note 1 "Organization and
Description  of  Business"  above),  on  February 3, 2005,  the  Company  issued
10,606,158 shares of newly issued restricted common stock in exchange for all of
the issued and outstanding common stock of Tailong.

On February 3, 2005,  and following the  combination  with Tailong,  the Company
completed the sale of 590,283  shares of its restricted  common stock  ("Private
Placement Shares") for $1.6941 per share for a total of $1,000,000 to accredited
investors pursuant to the stock purchase agreement dated February 3, 2005.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On April 21,  2005,  the  Company  filed a form  definitive  14C to  effect  the
followings:

         (1)      change the name of the  Company  to China  Agritech,  Inc.  in
                  order  to  reflect  its  new  business  of  manufacturing  and
                  marketing liquid fertilizer products;

         (2)      allow the Board of Directors to set the number of directors in
                  accordance with the Company's bylaws;

         (3)      amend and restate the Certificate of Incorporation; and

         (4)      effect a forward  stock split whereby each share of issued and
                  outstanding  common stock is converted into 1.14 shares of the
                  Company's common stock.


The definitive  14C became  effective on May 12, 2005 when the Company filed its
amended and restated  Certification of  Incorporation  with the Secretary of the
State of Delaware.



                                       28
<PAGE>

ITEM 5 - OTHER INFORMATION

On November 17, 2004, the Company's wholly owned  subsidiary,  Tailong,  entered
into a financial  advisory  agreement with HFG  International,  Limited ("HFG"),
under which  Tailong  retained  HFG to provide  certain  financial  advisory and
consulting  services.  Copies of this agreement and the first amendment thereto,
dated December 23, 2004, are filed as exhibits to this report.

We filed a Form 8-K and a Form  8-K/A on  February  3,  2005 and  March 1,  2005
respectively.  These  reports  stated that on December  25,  2004,  the Company,
Tailong,  and the Tailong  stockholders  entered into the  Agreement and Plan of
Reorganization,  as amended and such Reorganization became effective on February
3, 2005.  The  Reorganization  Agreement  provided  for the  acquisition  by the
Company  from the  Tailong  stockholders  of all of the issued  and  outstanding
Tailong  shares in exchange for  10,606,158  shares of newly  issued  restricted
common stock of the Company.

We filed a form 8K and a Form  8-K/A  on  March  10,  2005  and  April  6,  2005
respectively.  These reports stated that effective as of March 5, 2005, Weinberg
& Co., P.A.  ("Weinberg")  was dismissed as the Company's  principal  accountant
engaged  to audit the  Company's  financial  statements.  On the same  day,  the
Company  engaged  Kabani & Company,  Inc.,  whose  address is 17011 Beach Blvd.,
Suite  1230,  Huntington  Beach,  CA  92647,  to audit the  Company's  financial
statements.

We  filed a form 8K on May 23,  2005 to  disclose  that  our  previously  issued
financial  statements  covering  the first  quarter of 2005  should no longer be
relied upon because of errors in such  financial  statements  and because of the
review  of  such  financial  statements  by  our  U.S.  independent   registered
accountant was incomplete at the time of filing.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         10.1 - Financial  Advisory  Agreement entered into by and between China
         Tailong Holdings Company Limited and HFG International Limited dated as
         of November 17, 2004.

         31.1 - Certification of Chief Executive Officer pursuant to Rule 13a-14
         and Rule 15d-14(a) of the Exchange Act.

         31.2 - Certification of Chief Financial Officer pursuant to Rule 13a-14
         and Rule 15d-14(a) of the Exchange Act.

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

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

(b)      Reports on Form 8-K


See Item 5.

                                       29
<PAGE>

                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



/s/ Chang Yu                                     June 8, 2005
-------------------------------------
Chang Yu
Chief Executive Officer and President



/s/ Lijun Peng                                   June 8, 2005
-------------------------------------
Lijun Peng
Chief Financial Officer




















                                       30