**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**FORM 10-QSB**

(Mark One)

X__Quarterly report under section 13 or 15(d) of the Securities Exchange Act of 1934 for the
period ended March 31, 2002.

___Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934 for the
transition period from ______ to ______.

**T.Z.F.  INTERNATIONAL INVESTMENTS, INC.******

(Exact name of registrant as specified in its charter)

|Nevada                                         | 0-31353                  | 88-0404186                          
|---------------------------------------------- | ------------------------ | ------------------------------------
|(State or other jurisdiction of
incorporation) | (Commission File
Number) | (IRS Employer Identification
Number)

|Unit 1, 3071 No. 5 Road

Richmond, B.C., Canada | V6X 2T4   
|----------------------------------------------- | ----------
|(Address of principal executive offices)        | (Zip Code)

Registrant's telephone number, including area code:  (604) 718-2188

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act 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 ..X..  No ....

Applicable only to issuers involved in bankruptcy proceedings during the past five years.

Check whether the issuer has filed all documents and reports required to be filed by Section 12,
13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a
court.  Yes .....  No .....

Applicable only to corporate issuers

State the number of shares outstanding of each of the issuer's classes of common equity, as of the
latest practicable date:  At March 31, 2002, there were 35,498,505 shares outstanding.

Transitional Small Business Disclosure Format (Check one):  Yes .....     No ..X..

PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS AND EXHIBITS

(a)  The unaudited financial statements of registrant for the three  months ended March 31, 2002,
follow.  The financial statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the interim period presented.

T.Z.F.  INTERNATIONAL INVESTMENTS, INC.

(A Development Stage Company)

FINANCIAL STATEMENTS

Quarter Ended March 31, 2002

|INDEX TO FINANCIAL STATEMENTS:                            | 
|--------------------------------------------------------- | 
|                                                          | 
|Independent Accountants' Review Report                    | 
|ConsolidatedBalance Sheets                                | 
|Consolidated Statements of Operations                     | 
|Consolidated Statements of Retained Earnings (Deficit)    | 
|Consolidated Statements of Cash Flows                     | 
|Schedule of Fixed Assets/Intangible Assets                | 
|Consolidated Statement of Changes in Stockholders' Equity | 
|Notes to Consolidated Financial Statements                | 



**MOEN AND COMPANY**

********CHARTERED ACCOUNTANTS



|PO Box 10129            |            |              
|----------------------- | ---------- | -------------
|1400 IBM Tower          | Telephone: | (604)662-8899
|701 West Georgia Street | Fax:       | (604)662-8809
|Vancouver, BC   V7Y 1C6 |            |              



**INDEPENDENT ACCOUNTANTS' REVIEW REPORT**

Board of Directors and Stockholders

T.Z.F. International Investments, Inc.

(A Nevada Corporation)

We have reviewed the accompanying Consolidated Balance Sheets of T.Z.F. International
Investments, Inc. (A Nevada Corporation) as of March 31, 2002 and March 31, 2001, and the
Consolidated Statements of Operations, Retained Earnings, Cash Flows and Changes in
Stockholders' Equity for the three month periods then ended in accordance with Statements on
Standards for Accounting and Review Services issued by the America Institute of Public
Accountants.  All information included in these financial statements is the representation of the
management of T.Z.F. International Investments, Inc.

A review consists principally of applying analytical procedures to financial data and making inquiries
of persons responsible for financial and accounting matters.  It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we
do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the
accompanying financial statements in order for them to be in conformity with United States generally
accepted accounting principles (GAAP).

***"Moen and Company"***



Chartered Accountants

Vancouver, British Columbia, Canada

May 16, 2002



|******T.Z.F. INTERNATIONAL INVESTMENTS, INC.**                    
|------------------------------------------------------------------
|******(A Nevada Corporation)**                                    
|******Consolidated Balance Sheets**                               
|******March 31, 2002 and March 31, 2001**                         
|******(In US Dollars)**                                           
|******(Unaudited)**                                               
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|******Assets**                                                    
|Current Assets                                                    
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|TOTAL CURRENT ASSETS                                              
|Investment in Guangdon Hongkang Medical Company                   
|Fixed Assets - Schedule A                                         
|Intangible Assets - Schedule A                                    
|Goodwill, at cost (note 11)                                       
|TOTAL ASSETS (Pledged as security for bank loans - Note 17)       
|******Liabilities and Stockholders' Equity**                      
|Current Liabilities                                               
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|TOTAL CURRENT LIABILITIES                                         
|Long-term Liabilities                                             
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|Stockholders' Equity                                              
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|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        
|Approved on behalf of the board:                                  
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|See Accompanying Notes and Independent Accountants' Review Report.

|                                  |                          |  |  | **T.Z.F. INTERNATIONAL INVESTMENTS, INC.**    | 
|--------------------------------- | ------------------------ |  |  | --------------------------------------------- | 
|                                  |                          |  |  | **********(A Nevada Corporation)**           
|                                  |                          |  |  | ******Consolidated Statements of Operations**
|                                  |                          |  |  |                                               | 
|                                  |                          |  |  | ******(Unaudited)**                          
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|                                  |                          |  |  |                                               | 
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|Revenue                           |                          |  |  |                                               | 
|                                  | Sales                    |  |  |                                               | 
|                                  | Cost of sales            |  |  |                                               | 
|                                  |                          |  |  |                                               | 
|                                  | Other income             |  |  |                                               | 
|                                  |                          |  |  |                                               | 
|Expenses                          |                          |  |  |                                               | 
|                                  | Selling expenses         |  |  |                                               | 
|                                  | Administration Costs     |  |  |                                               | 
|                                  | Depreciation             |  |  |                                               | 
|                                  | Amortization of Goodwill |  |  |                                               | 
|                                  |                          |  |  |                                               | 
|                                  |                          |  |  |                                               | 
|Profit (loss) before income taxes |                          |  |  |                                               | 
|Income taxes                      |                          |  |  |                                               | 
|Net profit (loss) for the period  |                          |  |  |                                               | 
|                                  |                          |  |  |                                               | 
|Basic profit per share            |                          |  |  |                                               | 
|Diluted profit per share          |                          |  |  |                                               | 
|Weighted average number of        |                          |  |  |                                               | 
|                                  | common shares used to    |  |  |                                               | 
|                                  | compute profit per share |  |  |                                               | 
|                                  |                          |  |  | Basic                                         | 
|                                  |                          |  |  | Diluted                                       | 
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See Accompanying Notes and Independent Accountants' Review Report.



|**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**                    
|--------------------------------------------------------------
|******(A Nevada Corporation)**                                
|******Consolidated Statements of Retained Earnings (Deficit)**
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|******(Unaudited)**                                           
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|Retained earnings (deficit),                                  
|beginning of period                                           
|Net profit (loss) for the period                              
|Retained earnings,                                            
|end of period                                                 
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See Accompanying Notes and Independent Accountants' Review Report.



|******T.Z.F. INTERNATIONAL INVESTMENTS, INC.**
|----------------------------------------------
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|Cash derived from (used for)                  
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|Cash, increase (decrease)                     
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|Cash, beginning of period                     
|Cash, end of period                           
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See Accompanying Notes and Independent Accountants' Review Report.

|**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**
|------------------------------------------
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|******As at March 31, 2002**              
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|Intangible Assets                         
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See Accompanying Notes and Independent Accountants' Review Report.

|**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**                            
|----------------------------------------------------------------------
|**(A Nevada Corporation)**                                            
|**Consolidated Statement of Changes in Stockholders' Equity**         
|******From Date of Inception on September 15, 1998 to March 31, 2002**
|**(In U.S. Dollars)******                                             
|**(Unaudited)******                                                   
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|Balance, December 31, 1998                                            
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|Balance, December 31, 1999                                            
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|Balance, April 30, 2000                                               
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|05/15/00 10 to 1 forward split                                        
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|Balance, December 31, 2000                                            
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|Balance, December 31, 2001                                            
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|Balance, March 31, 2002                                               
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**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

**(a Nevada Corporation)**

**Notes to Consolidated Financial Statements**

**March 31, 2002**

**(In U.S. Dollars)**

**(Unaudited)**

Note 1.	ORGANIZATION AND NATURE OF BUSINESS

The Company was incorporated under the laws of the State of Nevada on September 15, 1998,
as Sabai Sabai Enterprises, Corp., and on May 25, 2000, changed its name to T.Z.F. International
Investments, Inc.

Pursuant to a stock purchase agreement dated March 30, 2000, T.Z.F. International Herbs
Investment Inc., ("BC Company") purchased 1,000,000 shares of the issued and outstanding
common stock of the Company.  These shares were purchased in anticipation of the subsequent
completion of a share exchange transaction between the Company and the BC Company.  In
conjunction with completion of the share exchange transaction these shares were cancelled,
effective April 30, 2000, and as a result, the amount of the par value of $1,000 attributable to such
shares was transferred to paid-in capital.

Pursuant to the terms of the share exchange which was effective as of April 30, 2000, the
Company acquired all of the issued and outstanding stock of the BC Company in exchange for
the issuance of 18,451,843 shares of its authorized but previously unissued sharesof common
stock, which shares were valued at $5,352,932 for purposes of the acquisition.  Assets and
liabilities of the BC Company at the date of acquisition on April 30, 2000, were as follows:

|Assets                                                                                                                       |                                             |                                               |           | 
|---------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------------- | --------- | 
|                                                                                                                             | Cash and short term deposits                | $1,040,372                                   
|                                                                                                                             | Accounts receivable                         | 13,217                                       
|                                                                                                                             | Capital stock subscriptions receivable      | 374,546                                      
|                                                                                                                             | Prepaid expense and deposit                 | 5,382                                        
|                                                                                                                             | Inventories                                 | 206,532                                      
|                                                                                                                             | Deferred lease expense, net of amortization | 5,047                                        
|                                                                                                                             |                                             | Fixed assets, net of accumulated depreciation | 59,927   
|                                                                                                                             |                                             | Intangible assets, technology rights          | 4,038,229
|                                                                                                                             |                                             |                                               |           | 
|Liabilities                                                                                                                  |                                             |                                               |           | 
|                                                                                                                             | Accounts payable and accrued                |                                               | 114,917  
|                                                                                                                             | Accrued payroll deductions payable          | 45,767                                       
|                                                                                                                             | Management fees payable                     |                                               | 168,205  
|                                                                                                                             | Due to related parties                      |                                               | 60,755   
|                                                                                                                             |                                             |                                               |           | 
|Net assets including cumulative translation                                                                                  | 5,353,608                                  
|Cumulative translation, included in above,

Booked in stockholders' equity of Sabai Sabai                                    | (676)                                      
|Net value in exchange for 18,451,843 common

Shares off Sabai Sabai and net equity on date of

acquisition of the BC Company | $5,352,932                                 

In May 2000, the Company completed a 10:1 forward split of its outstanding stock. This forward
split increased the number of issued and outstanding shares from 600,000 (1,600,000 previously
outstanding less the 1,000,000 shares which were cancelled) to 6,000,000.

Subsequent to completion of the share exchange on April 30, 2000, the BC Company (the
Company's wholly-owned subsidiary) received subscriptions for 340,000 additional shares.  The
Company elected to convert such shares to shares of its own common stock on the same terms
as it completed the share exchange.  Therefore, effective as of July 4, 2000 the Company issued
340,000 additional shares in exchange for shares of the BC Company

In May 2000, following completion of the forward split, the Company authorized the issuance of
250,000 restricted shares as compensation for consulting services at a price of CAD$1.50 per
share, to the following:

|Name           | Number of Shares | Consideration CAD $ | Equivalent US $
|-------------- | ---------------- | ------------------- | ---------------
|Robert Gelfand | 50,000           | $75,000             | $50,480        
|Fred Fisher    | 200,000          | 300,000             | 201,920        
|               | 250,000          | $ 375,000           | $ 252,400      

Accordingly, the amount of $252,400 was recorded as stock-based compensation in the financial
statements for the year ended December 31, 2000.

T.Z.F. International Herbs Investment Inc., which is now a wholly-owned subsidiary of the
Company, owns the formula and all distribution and intellectual property rights, including
trademark, patent and industry design rights, for Snow Lotus Tea products.

The Company and its wholly-owned subsidiary, the BC Company, are both based in Richmond,
British Columbia, Canada.

On December 21, 2000 the BC Company acquired 100% of issued and outstanding shares of
Tianan Investment Limited ("Tianan"), a British Virgin Islands company with an office in Hong
Kong for the total price of HK$21,500,000 (US$2,758,847),which was paid in cash in three
installments. The BC Company paid the first installment totaling HK $6,638,318.09
(approximately US $851,100) in two parts, on July 7 and July 10, 2000. The second installment
of HK $6,261,681.91 (approximately US $802,800), and the final installment of
HK$8,600,000.00 (approximately US $1,104,947), which were paid on October 20, 2000 and
December 20, 2000, respectively, were both paid by Xin Chen, one of the principal shareholders.

The sole asset of Tianan is its 100% ownership of Tianan Pharmacy (Xiamen) Co., Ltd. ("Tianan
Pharmacy"), a manufacturer of Chinese biological and herbal medicine products. Tianan
Pharmacy has a plant which is located in the Torch High Tech Development Zone of Xiamen,
China, where it currently conducts research and development and produces herbal and biological
medicines which it distributes and sells in China.

As a result of the closing of this purchase transaction, Tianan became a wholly-owned subsidiary.

Assets and liabilities ofTiananat the date of acquisition on December 21, 2000, were as follows:

|Assets |                                       |                                               |           | 
|------ | ------------------------------------- | --------------------------------------------- | --------- | 
|       | Cash and cash equivalents             | $ 103,910                                    
|       | Accounts receivable, trade            | 198,910                                      
|       | Short-term loans                      | 831,875                                      
|       | Prepaid expense and deposit           | 5,069                                        
|       | Inventories                           | 449,147                                      
|       | Deferred expense, net of amortization | 27,957                                       
|       |                                       | Fixed assets, net of accumulated depreciation | 1,405,851
|       |                                       | Rights of use of land - 50 years              | 370,508  
|       |                                       |                                               |           | 

|Liabilities                        |                               |        |         | 
|---------------------------------- | ----------------------------- | ------ | ------- | 
|                                   | Accounts payable, trade       |        | 9,921  
|                                   | Accounts payable, others      | 42,176
|                                   | Taxes payable                 |        | 33,222 
|                                   | Deferred liabilities, pension |        | 212,562
|                                   | Bank loan                     |        |         | 
|                                   | 781,557                      
|Net assets                         | 2,611,670                    
|Goodwill on acquisition            | 147,177                      
|Total cash payments on acquisition | $2,758,847                   

On December 31, 2000, the BC Company completed the purchase of all of the shares of T.Z.F.
International Herbs (Jiangsu) Co. Ltd. ("TZF Jiangsu") (formerly Second Pharmacy Factory of
Yancheng City), ("Second Pharmacy"), a Chinese corporation. The assets were purchased from
The People's Government of JianWu County, JiangSu Province, the People's Republic of China.
The purchase was completed pursuant to the terms of an Acquisition and Investment Agreement
dated September 12, 2000.

In accordance with the Acquisition and Investment Agreement, the purchase price was a total of
RMB14,000,000.00 (US $1,786,591), which was paid in cash in two installments, plus
assumption of liabilities totaling approximately RMB400,000 (approximately US$48,000). The
first cash installment totaling RMB3,000,000.00 (approximately US $362,000) , was paid on
September 18, 2000. The second cash installment of

RMB11,000,000.00 (approximately US $1,376,591) was paid in two parts, on November 22 and
November 28, 2000.

The purchase price for the assets of TZF Jiangsu was determined through arms length negotiation
with the seller.

The cash purchase price for the assets of TZF Jiangsu was paid on our behalf by Xin Chen, one
of the principal shareholders. These payments were part of a total of US$5,000,000 which Mr.
Chen paid or advanced on behalf of the Company during the fiscal year ended December 31,
2000.

The assets of TZF Jiangsu consist primarily of an automated assembly line used for the production
of various pharmaceutical products. The Company will continue to use this equipment and factory
for the production of pharmaceutical products and will seek to expand and improve the
operations.

In addition to payment of the initial purchase price of RMB14,000,000 for purchase of the
existing assets of TZF Jiangsu, the Acquisition and Investment Agreement contemplates that
during the next three years we will invest an additional sum of RMB14,000,000 in fixed assets,
technological improvements, research and development and marketing in order to improve and
expand the operations of TZF Jiangsu. In return for the Company's commitment to make this
additional capital investment, the seller, The People's Government of JianWu County, JiangSu
Province, the People's Republic of China has agreed to grant the Company various incentives,
including rent free occupancy of certain new plant space for 50 years, an agreement to refund
certain Value Added Tax for 3 years, a 100% exemption from income taxes for three years
commencing in 2001, a 50% exemption from income taxes for an additional 3 years thereafter,
an exemption from the Industrial and Commercial Administration Charge and other industry fees
for one year, and an exemption from a variety of other fees and surcharges during the period that
the new plant space is under construction.

Assets and liabilities ofTZF Jiangsu at the date of acquisition on December 31, 2000, were as
follows:

|Assets |                                               |             |  | 
|------ | --------------------------------------------- | ----------- |  | 
|       | Cash and cash equivalents                     | $ 1,005,456
|       | Accounts receivable, trade                    | 1,675,847  
|       | Short-term loans                              | 701,927    
|       | Inventories                                   | 79,095     
|       | Construction in progress                      | 861,460    
|       | Fixed assets, net of accumulated depreciation | 548,421    
|       | Fixed assets, other                           | 239,261    
|       | Rights of use of land - 50 years              | 1,239,942  

|Liabilities |                                        |         |         | 
|----------- | -------------------------------------- | ------- | ------- | 
|            | Accounts payable, trade                |         | 913,669
|            | Accounts payable, others               | 350,001
|            | Taxes payable                          |         | 389,934
|            | Payroll and payroll deductions payable |         | 94,821 
|            | Long-term liabilities                  |         | 306,138
|            | Bank loans                             |         |         | 
|            | 3,150,089                             
|Net assets  | 5,119,694                             

|Gain - Negative goodwill on acquisition added to

paid-in capital in these financial statements | 3,333,103 
|----------------------------------------------------------------------------------------------- | ----------
|Total cash payments on acquisition                                                              | $1,786,591

By an Acquisition and Investment Agreement dated December 31, 2000, the Company completed
the purchase of all of the shares of Shenzhen Tianzifu Network Technology Ltd., ("Shenzhen TZF
Net") (formerly Shenzhen Xinhaihu Industry Trading & Development Co., Ltd.), a Chinese
corporation.  The purchase price is $3,000,000, of which, $2,481,410 was paid, and the balance
of $518,590 is recorded as payable on acquisition as a current liability in these financial
statements.



The major businesses of Shenzhen TZF Net are in China and include pharmaceutical businesses,
material supply, computer network software and hardware development and related business
information consulting.

Shenzhen TZF Net.****owns and operates a major health food and medicine online sales network,
as outlined below through which Chinese products are marketed and brand products from North
America and the rest of the world will be distributed under licenses. It also serves as T.Z.F's
China headquarters, and will administer the operations of all current and future T.Z.F. subsidiaries
in China.

Shenzhen TZF Net operates a Chinese-Language health food Web site. Its objective is to
centralize the management of the entire T.Z.F. network in China and to improve its efficiency and
economic scale, including that of the manufacturing, sales and marketing functions. It proposes
to expand the existing distribution network and channels of distribution of all current subsidiaries
of T.Z.F. in China with its competitive edge and unique resources.  It will carry out the T.Z.F.
plan of building 200 chain counters and stores in the top 200 major department stores nationwide,
and to open 50 licensed drug stores, 60 chain stores and 20 distribution centers in selected
locations in China. After Shenzhen TZF Net has completed building the sales network platform
domestically in China, it will then focus on attracting international suppliers of health food or
related health care products that wish to export their products to China,  and use this expanding
international network to market Chinese health food products and herbal medicines.  Shenzhen
TZF Net proposes to be the flagship operation of an effective, competitive China-North America
manufacturing, sales and marketing network.

Shenzhen TZF Net will apply the computer network and database technology that it has
developed and is currently using in-house to consolidate, standardize and specialize its
management and distribution systems in order to maximize operating efficiencies. It will
implement a Retailer Management System, an Electronic Ordering System and an Electronic Data
Interchange. Network Technology's head office will control the organization of the chain stores.
Its online network will be able to present a virtual sales platform for the eventual B2B and B2C
transaction.  Shenzhen TZF Net proposes to have seven departments: marketing, merchandise,
sales, information center, distribution center, general management/administration and accounting.

Hongkang Pharmaceutical Company, is an 88% owned subsidiary of Shenzhen TZF Net. It was
formed in 1995 and is located in Guangdong Province. It has a staff of 60 and is one of only few
pharmaceutical wholesalers/retailers (out of 990 wholesale enterprises and 3,760 retailers) in
Guangdong Province to meet the GSP requirements.  Hongkang Pharmaceutical wholesales and
retails chemical pharmaceutical preparation, antibiotic pharmaceutical preparations, Chinese
traditional medicine preparations, Chinese traditional medicine tablets and health products
throughout Southern China including Guanxi, Fujian and Hunan provinces. Hongkang
Pharmaceutical plans to expand its facilities and market share in order to meet the growing
demand for medicines and to become a major pharmaceutical distributor and wholesaler in
Southern China.

During the fourth quarter of 2001, due to the problems of the approval from Chinese regulatory
bodies relating to the acquisition of Hongkang Pharmaceutical Company.  Directors and
Management of Shenzhen TZF Net decided to cancel the acquisition.  All the figures of
Hongkang Pharmaceutical Company consolidated into the financial statements of Shenzhen TZF
Net for the nine month period ended September 30, 2001, have been reversed during the fourth
quarter of 2001.  These resulted in negative sales in the consolidated financial statements for the
fourth quarter of 2001.

The annual adjusted figures for Shenzhen TZF Net are disclosed in the Condensed Statement of
Operations of subsidiaries in note 28, hereto.

Assets and liabilities ofShenzhen TZF Netat the date of acquisition on December 31, 2000, were
as follows:

|Assets      |                                                                    |              |  | 
|----------- | ------------------------------------------------------------------ | ------------ |  | 
|            | Cash and cash equivalents                                          | $    416,994
|            | Accounts receivable, trade                                         | 274,132     
|            | Short-term loans                                                   | 517,487     
|            | Short-term investment                                              | 1,354,293   
|            | Inventories                                                        | 12,033      
|            | Prepaid expenses                                                   | 23,260      
|            | Fixed assets, net of accumulated depreciation                      | 78,193      
|            | Investment in subsidiary,

Meixian Hengkang Pharmaceutical Company | 532,044     
|            | Deferred Website development costs                                 | 74,724      
|            |                                                                    | 3,283,160   
|Liabilities |                                                                   
|            | Accounts payable, trade                                            | 6,829       
|            | Accounts payable, others                                           | 1,183,904   
|            | Taxes payable                                                      | 151,804     
|            |                                                                    | 1,342,537   
|            | Net assets                                                         | 1,940,623   
|            | Goodwill on acquisition (note )                                    | 1,059,377   
|            | Total payments required on acquisition                             | $ 3,000,000 
|            | Amounts paid by December 31, 2000                                  | 2,481,410   
|            | Amount unpaid at December 31, 2000                                 |             
|            | and paid during the year ended December 31, 2001                   | $518,590    

**Principles of consolidation**

The accompanying consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary, T.Z.F. International Herbs Investment Inc.,Tianan Investment
Limited (and its wholly-owned subsidiary Tianan Pharmacy (Xiamen) Co. Ltd.),TZF
International Herbs (Jiangsu) Co. Ltd. and Shenzhen Tianzhifu Network Technology Ltd.  All
intercompany transactions and balances have been eliminated.

**Basis of presentation**

These consolidated financial statements have been prepared in accordance with Accounting
Principles Generally Accepted in the United States ("USGAAP).

**Development stage company**

The consolidated financial statements of the Company to December 31, 2001 were been
prepared in accordance with the provisions of Statement of Financial Accounting Standard
No. 7, "Accounting and Reporting by Development Stage Enterprises", which included
cumulative figures for the statement of operations and cash flows from the date of inception
on September 15, 1998 to December31, 2001.  Commencing January 1, 2002, the Company is
not considered to still be a development stage company and, accordingly, figures from date of
inception are not disclosed.

**Business Combinations**

The Company uses the Purchase Method in accounting for its acquisitions.

Goodwill will be subject to review for impairment.  This review would be at the lowest
reporting level or levels that include the acquired business (i.e., the reporting unit).  Goodwill
would be considered impaired and subject to write-down if the fair value of the reporting
unit's goodwill is less than its carrying amount.  The fair value of goodwill would be
determined by subtracting the fair value of the recognized net assets of the reporting unit
(excluding goodwill) from the fair value of the reporting unit.  The amount of the impairment
would be the difference between the carrying amount and the fair value of the goodwill.

**Use of estimates**

The preparation of financial statements in conformity with USGAAP 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 dates of the financial statements and the
reported amounts of revenues and expenses during the reporting periods.  Actual results could
differ from those estimates.

**Cash and cash equivalents**

Cash and cash equivalents consists of cash on deposit and highly liquid short-term interest
bearing securities with a maturity at the date of purchase of three months or less.

**Income Taxes**

Provisions for income taxes are based on taxes payable or refundable for the current year and
deferred taxes on temporary differences between the amount of taxable income and pretax
financial income and between the tax bases of assets and liabilities and their reported amounts
in the financial statements.  Deferred tax assets and liabilities are included in the financial
statement at currently enacted income tax rates applicable to the period in which the deferred
tax assets and liabilities are expected to be realized or settled as prescribed in FASB Statement
No. 109, Accounting for Income Taxes.  As changes in tax laws or rate are enacted, deferred
tax assets and liabilities are adjusted through the provision for income taxes.

**Compensated absences**

Employees of the corporation are entitled to paid vacations, sick days and other time off
depending on job classification, length of service and other factors.  It is impractical to
estimate the amount of compensation for future absences, and accordingly, no liability has
been recorded in the accompanying financial statements.  The corporation's policy is to
recognize the costs of compensated absences when paid to employees.

**Net earnings per share**

The Company adopted Statement of Financial Accounting Standards No. 128 that requires the
reporting of both basic and diluted earnings per share.  Basic earnings per share is computed
by dividing net income available to common shareowners by the weighted average number of
common shares outstanding for the period.  Diluted earnings per share reflects the potential
dilution that could occur if securities or other contacts to issue common stock were exercised
or converted into common stock.  In accordance with FASB 128, any anti-dilution effects on
net loss per share are excluded.

**Disclosure about fair value of financial instruments**

The Company has financial instruments, none of which are held for trading purposes. The
Company estimates that the fair value of all financial instruments at December 31, 2001 as
defined in FASB 107, does not differ materially from the aggregate carrying values of its
financial instruments recorded in the accompanying balance sheets.  The estimated fair value
amounts have been determined by the Company using available market information and
appropriate valuation methodologies.  Considerable judgment is required in interpreting
market data to develop the estimates of fair value, and accordingly, the estimates are not
necessarily indicative of the amounts that the Company could realize in a current market
exchange.

**Fixed assets**

Fixed assets are stated at cost less accumulated depreciation.  Depreciation is recorded on the
following rates, based upon the useful life of the assets.

|Office equipment      | - 20% per annum on the declining balance basis             
|--------------------- | -----------------------------------------------------------
|Leasehold improvement | - allocated on a straight-line basis over the term of lease
|Vehicles              | - 30% per annum on the declining balance basis             
|Computer equipment    | - 30% per annum on the declining balance basis             
|Buildings             | - 4.75% per annum on the straight-line basis               
|Mechanical devices    | - 19% per annum on the straight-line basis                 
|Electric devices      | - 19% per annum on the straight-line basis                 
|Shipping devices      | - 19% per annum on the straight-line basis                 
|Other devices         | - 19% per annum on the straight-line basis                 

**Long-lived assets**

Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," requires that long-lived
assets be reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount of the asset in question may not be recoverable.  This standard does not
have a material effect on the Company's results of operations, cash flows or financial position
in these financial statements.

**Foreign currency translation**

The functional currency of the parent Company T.Z.F. International Investments, Inc. is the
United States Dollar and of T.Z.F. International Herbs Investment Inc. is the Canadian Dollar,
Tiana Pharmacy (Xiamen) Co. Ltd, T.Z.F. International Herbs (Jiangsu) Co. Ltd. and
Shenzhen Tianzifu Network Technology Ltd. are in Chinese Yuan and the reporting currency
on a consolidated basis is the United States Dollar.

The assets, liabilities, and operations of the Company are expressed in the functional currency
of the Company in United States Dollars.  Operations of the subsidiary, T.Z.F. International
Herbs Investment Inc. are in Canadian Dollars and in conformity with US GAAP they are
translated into the reporting currency, the United States Dollar.

Monetary assets and liabilities are translated at the current rate of exchange.

The weighted average exchange rate for the period is used to translate revenue, expenses, and
gains or losses from the functional currency to the reporting currency.

The gain or loss on translation is reported as a separate component of stockholders' equity and
not recognized in net income.  Gains or losses on remeasurement are recognized in current net
income.

Gains or losses from foreign currency transactions are recognized in current net income.

Fixed assets are measured at historical exchange rates that existed at the time of the
transaction.

Depreciation is remeasured at historical exchange rates that existed at the time the underlying
related asset was acquired.

An analysis of the changes in the cumulative translation adjustment as disclosed as part of
stockholders' equity, is as follows:

|                           | Three months Ended

March 31,
|-------------------------- | -----------------------------
|                           | 2002                         
|Balance, Beginning of year | $  4,987                     
|Change during the year     |                              
|Balance, End of period     | $  4,987                     

The effect of exchange rate changes on cash balances is reported in the statement of cash
flows as a separate part of the reconciliation of change in cash and cash equivalents during the
period.

**Concentration of credit risk**

Financial instruments that potentially subject the Company to a significant concentration of
credit risk consist primarily of cash and cash equivalents which are not collateralized.  The
Company limits its exposure to credit loss by placing its cash and cash equivalents with high
credit quality financial institutions.

**Inventories**

The inventories are recorded at the lower of cost or market. As at March 31, 2002 the
inventories total $2,117,601 (March 31, 2001 - $1,566,665) (see note 7)

**Revenue Recognition**

The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) 101,
Revenue Recognition in Financial Statements, in December 1999.  The SAB summarizes
certain of the SEC staff's views in applying generally accepted accounting principles to
revenue recognition in financial statements.  During the current year, the Company performed
a review of its revenue recognition policies and determined that it is in compliance with SAB
101.

**Web Site Development Expenses**

Web site development expenses relate to the development of new online services and consist
principally of employee compensation, as well as costs for content, facilities and equipment.  The
consensus in the Financial Accounting Standards Board Emerging Issues Task Force (EITF) Issue
No. 00-2, Accounting for Web Site Development Costs, requires that certain costs to develop
Web sites be capitalized or expensed, depending on the nature of the costs.  Development
expenses of $67,809 have been capitalized and will be either expensed in 2002 or amortized over
a period of 30 months after completion the Web Site (note 13)

**Shipping and Handing Fees and Costs**

In September 2000, the Financial Accounting Standards Board Emerging Issues Task Force
(EITF) reached a final consensus on EITF Issue No. 00-10, Accounting for Shipping and
Handling Fees and Costs.  This consensus requires that all amounts billed to a customer in a sale
transaction related to shipping and handling, be classified as revenue.  The Company historically
has netted shipping charges to customers with shipping and handling costs which are included in
operating expenses in the Statements of Operations.  With respect to the classification of costs
related to shipping and handling incurred by the seller, the EITF determined that the classification
of such costs is an accounting policy decision that should be disclosed.  The Company adopted
the consensus in the Issue in fiscal 2001.

**Segmented Information**

The Company's identifiable assets as at March 31, 2002 are located in the following countries:

|Canada            | $4,697,701 
|----------------- | -----------
|China             | 15,747,048 
|The United States | 12,144     
|                  | $20,456,893

The total for cash and equivalents as at March 31, 2002, is made up as follows:

|                    | TZF  US
Company | The BC
Company | Tian'an     | JZF Jiangsu | Shenzhen
TZF Net | Total    
|------------------- | --------------- | -------------- | ----------- | ----------- | ---------------- | ---------
|Petty cash          | $               | $        417   | $        83 | $ 29,532    | $ 827            | $ 30,859 
|Cash in trust       |                 | 8,217          |             |             |                  | 8,217    
|Cash in bank        | 3,317           | 55,297         | 169,370     | 88,093      | 6,597            | 322,674  
|Short-term
deposits |                 |                |             | 27,686      |                  | 27,686   
|Total               | $ 3,317         | $ 63,931       | $169,453    | $ 145,311   | $   7,424        | $ 389,436

Note 4.  ACCOUNTS RECEIVABLE - $3,862,582 (March 31, 2001 - $5,617,569)

This balance represents the following:

|                                  | TZF  US
Company | The BC
Company | Tian'an  | JZF
Jiangsu | Shenzhen
TZF Net | Total     
|--------------------------------- | --------------- | -------------- | -------- | ----------- | ---------------- | ----------
|Accounts receivable,
trade        | $   8,827       | $ 593,140      | $511,619 | $1,248,347  | $ 7,046          | $2,368,979
|Accounts receivable,
Canadian GST |                 | 28,179         |          |             |                  | 28,179    
|Short-term loans                  |                 |                | 3,531    |             | 551,878          | 555,409   
|Accounts receivable,
others       |                 | 12,452         |          | 897,563     |                  | 910,015   
|Total                             | $ 8,827         | $633,771       | $515,150 | $2,145,190  | $ 558,924        | $3,862,582

Note 5.  PREPAID EXPENSES AND DEPOSITS - $2,227,110

The balance of prepaid expense and deposit as at March 31, 2002, is as follows:

|                                                     | The BC
Company | Tian'an | Shenzhen
TZF  Net | Total        
|---------------------------------------------------- | -------------- | ------- | ----------------- | -------------
|Rental deposits                                      | $ 5,157        | $       | $                 | $       5,157
|Prepaid to Beijing Zhong Buo for
website development |                |         | 1,211,914         | 1,211,914    
|Prepaid new medicine application fees                |                | 846,433 |                   | 846,433      
|Deposit for supplies                                 |                | 130,872 | 32,734            | 163,606      
|Total                                                | $5,157         | 977,305 | $1,244,648        | $2,227,110   

As at March 31 2002, Shenzhen TZF Net paid $1,211,914 (11,872,120 Yuan) to Beijing
Zhongbuo Merchants Promotion Internet Co. Ltd. for the setting up of website and computer
systems.  This project is in progress as at March 31, 2002 and, accordingly, is recorded as a
prepaid expense.

As at March 31, 2002, Tianan paid $846,433 (7,000,000 Yuan) to three medical companies as
prepayment for three new product certificate.  The medical companies would provide the
certificate within six months, otherwise they will return the money, plus interest at the prime bank
rate, calculated from the date of prepayment.

Note 6.  SUBSCRIPTIONS RECEIVABLE

As at September 11, 2000, Mr. Chung Yiu Chung signed a subscription agreement with the
Company, whereby he subscribed for 561,798 common share of the Company at a price of
CAD$1.50 per share, of which, 162,994 common shares were issued and paid.  The balance of
$406,434 is unpaid.  As at December 31, 2001 the latter amount has been reversed and the issued
share capital reduced, accordingly.

Note 7.  INVENTORIES - $2,117,601

The inventories as at March 31, 2002, are made up as follows:

|                    | The BC
Company | Tian'an   | TZF Jiangsu | Shenzhen
TZF Net | Total     
|------------------- | -------------- | --------- | ----------- | ---------------- | ----------
|Raw materials       | $              | $ 71,242  | $ 100,850   | $                | $172,092  
|Packaging materials | 22,947         | 24,532    | 711,558     |                  | 759,037   
|Finished products   |                | 390,699   | 259,835     |                  | 650,534   
|Other               |                |           | 337,053     | 198,885          | 535,938   
|Total               | $     22,947   | $ 436,473 | $1,409,296  | $198,885         | $2,117,601

Note 8.  FIXED ASSETS

The totals for fixed assets and accumulated depreciation as at March 31, 2002, are made up as
follows:

|                           | The BC
Company | Tian'an   | TZF
Jiangsu | Shenzhen
TZF Net | Total    
|-------------------------- | -------------- | --------- | ----------- | ---------------- | ---------
|**Cost**                   |                |           |             |                  |          
|Computer equipment         | $ 14,364       | $         | $           | $                | $14,364  
|Office equipment           | 14,286         |           |             |                  | 14,286   
|Vehicles                   | 19,025         |           |             |                  | 19,025   
|Buildings and
improvements | 38,426         | 1,312,794 |             |                  | 1,351,220
|Mechanic devices           |                | 321,187   |             |                  | 321,187  
|Shipping devices           |                | 21,685    |             |                  | 21,685   
|Electronic devices         |                |           |             | 100,072          | 100,072  
|Other                      |                | 316,326   | 837,130     |                  | 1,153,456
|Total                      | 86,101         | 1,971,992 | 837,130     | 100,072          | 2,995,295

|**Accumulated
Depreciation** |          |            |           |          |           
|---------------------------- | -------- | ---------- | --------- | -------- | ----------
|Computer equipment           | 6,033    |            |           |          | 6,033     
|Office equipment             | 5,337    |            |           |          | 5,337     
|Vehicles                     | 7,804    |            |           |          | 7,804     
|Buildings and
improvements   | 12,152   | 305,234    |           |          | 317,386   
|Mechanic devices             |          | 142,851    |           |          | 142,851   
|Shipping devices             |          | 19,517     |           |          | 19,517    
|Electronic devices           |          |            |           | 20,107   | 20,107    
|Other                        |          | 272,055    | 55,132    |          | 327,187   
|Total                        | 31,326   | 739,657    | 55,132    | 20,107   | 846,222   
|**Net book value**           |          |            |           |          |           
|Computer equipment           | 8,331    |            |           |          | 8,331     
|Office equipment             | 8,949    |            |           |          | 8,949     
|Vehicles                     | 11,221   |            |           |          | 11,221    
|Buildings and
improvements   | 26,274   | 1,007,560  |           | 0        | 1,033,834 
|Mechanic devices             |          | 178,336    |           | 0        | 178,336   
|Shipping devices             |          | 2,168      |           | 0        | 2,168     
|Electronic devices           |          | 0          |           | 79,965   | 79,965    
|Other                        |          | 44,271     | 781,998   | 0        | 826,269   
|Total (to Schedule A)        | $ 54,775 | $1,232,335 | $ 781,998 | $ 79,965 | $2,149,073

Note 9.  FIXED ASSETS - OTHERS

As at March 31, 2002, other fixed assets of $552,436 as disclosed in Schedule A, in addition to
the above, represent the residual value of fixed assets located at TZF Jiangsu.

Note 10.  FIXED ASSETS - CONSTRUCTION IN PROGRESS

The construction in progress of $1,973,878 as at March 31, 2002, applies to new buildings and
related equipment located at TZF Jiangsu and will not be depreciated until the building has been
completed and the equipment put into use.  Certificate of completion is expected by mid 2002.

Note 11.  GOODWILL

As at March 31, 2002, goodwill of $1,206,554 is made up as follows:

|                         | Tian'an  | Shenzhen TZF  Net | Total     
|------------------------ | -------- | ----------------- | ----------
|Goodwill on acquisitions | $147,177 | $1,059,377        | $1,206,554

The goodwill will be evaluated on an annual basis as to any possible impairment.  The earnings
of Tianan justify the goodwill.  Shenzhen is expected to attain earnings to continue to justify the
amount of goodwill and, accordingly, no adjustment has been made to the goodwill booked for
Shenzhen.

Note 12.   INTANGIBLE ASSETS - DEFERRED COSTS

As at March 31, 2002, deferred costs of $100,560 are made up as follows:

|                                                                                              | Tian'an  | Shenzhen
TZF  Net | Total  
|--------------------------------------------------------------------------------------------- | -------- | ----------------- | -------
|Website development - to be amortized over 30 months

after completion of the Website in 2002 | $        | $67,809           | $67,809
|Net product development costs - to be expensed in
2002                                        | 32,751   |                   | 32,751 
|Amortization                                                                                  |          | (3,737)           | (3,737)
|Net book value (to schedule A)                                                                | $ 32,751 | $ 64,072          | $96,823

Note 13.  INTANGIBLE ASSETS - TECHNOLOGY RIGHTS

By agreement dated December 15, 1999, Shenzhen Hengyunda Enterprises Co. Ltd. of P.R. China
agreed to sell and assign certain information and rights relating to a series of products known as
the Snow Lotus Tea series products to the BC Company.

The BC Company agreed to pay consideration of $4,038,229 for acquisition of these assets,
through the issuance of 6,000,000 shares of its Class B common stock, which were valued for
purposes of the acquisition at a price of CAD$1.00 per share, for total consideration of
CAD$6,000,000 (US$4,038,229).

Shenzhen Hengyunda Enterprises Co. Ltd. has warranted that there are no charges or
encumbrances against the rights being acquired.

This agreement includes the sale, assignment and transfer of all the right, title and interest in and
to the Product Information and all the rights to use, exploit, develop or otherwise deal with the
Product Information or the Project, including the right to register any Intellectual Property in
connection with the Product, the same to be held and enjoyed by the BC Company and its
successors and assigns as fully and effectively as the same would have been held and enjoyed by
Shenzhen Hengyunda Enterprises Co. Ltd. had this transfer and assignment not been made.

Shenzhen Hengyunda Enterprises Co. Ltd. further agrees to execute and deliver all such
documents and further assurances as may be necessary or desirable to give effect to the sale and
assignment.

Amortization of the cost of the technology will commence when the products relating to the
technologies are available to be marketed; which is expected to be effective in 2002.  The
amortization period is for ten years on a straight-line basis.  No amortization of these technology
rights is included in these financial statements for the period ended March 31, 2002.

Note 14.   ACCOUNTS PAYABLE AND ACCRUED

Details of the total of accounts payable and accrued as at March 31, 2002, are as follows:

|                | TZF  US
Company | The BC
Company | Tian'an  | TZF
Jiangsu | Shenzhen
TZF Net | Total     
|--------------- | --------------- | -------------- | -------- | ----------- | ---------------- | ----------
|A/P, trade      |                 |                | $ 70,686 | $1,203,819  | $ 46,961         | $1,321,466
|Accrued payroll |                 |                | 7,815    | 22,790      | 9,928            | 40,533    
|Taxes payable   |                 |                | 11,827   | 133,173     | 68,693           | 213,693   
|Other payables  | 7,674           | 598            | 48,332   | 467,906     | 285,265          | 809,775   
|Total           | 7,674           | 598            | 138,660  | 1,827,688   | 410,847          | 2,385,467 

Note 15.  MANAGEMENT FEES PAYABLE

There are no management fees incurred for the quarter ended March 31, 2002.

Note 16.  RELATED PARTY TRANSACTIONS

a)	The amount of $314,706 represents loans to the Company by related parties as at
March 31, 2002, is unsecured, non interest bearing, with no specific terms of repayment.

b)	The principal shareholders offered to all warrant holders to exchange their warrants
for shares held by the principal shareholders pursuant to such ratio so that, with the completion
of the warrant/share exchange, the per share cost of the share/warrant held by the minority
shareholder effectively stands at CAD$0.75 per share.  The share/warrant change became
effective as of December 17, 2000.

c)During the fiscal year ended December 31, 2000, Mr. Xin Chen, Director and
Chairman of Board of Directors of the Company, advanced a total of approximately $5,500,000
on behalf of the Company. These funds were used in part for purchase of the assets of TZF
Jiangsu, and in part for purchase of all of the issued and outstanding stock of Tian'an Investments
Limited, a British Virgin Islands Corporation (which was completed on December 21, 2000) and
part of the payment on the acquisition of 100% issued and outstanding shares of Shenzhen T.Z.F.
Network Technologies Co., Ltd.

On December 28, 2000, the Company signed a Debt Settlement Agreement with Mr. Xin
Chen.  Mr. Chen agreed to take 10,000,000 common shares of the Company at a price of
CAD$0.75 (US$0.50) per share to repay $5,000,000 of his loan.  These shares have warrants
attached entitling the holder to purchase additional 10,000,000 common shares of the Company
at a price of CAD$1.50 per share until December 28, 2001 (expired), and thereafter, at a price of
CAD$2.50 per share until December 28, 2002.

Note 17.  BANK LOANS

Details of bank loans as at March 31, 2002, are as follows:

- Tianan

As at March 31, 2002, Tianan has bank loans, as follows, secured by its assets:

|                        | Period of Loan     | Principal

Chinese
RMB | Principal

Equivalent to
US $ | Interest
Rate/Monthly
|----------------------- | ------------------ | ---------------------- | ----------------------------- | ---------------------
|Bank of China           | 12/30/00 - 4/30/02 | 2,700,000              | 326,481                       | 0.558%               
|China Construction
Bank | 5/18/01 - 5/18/02  | 3,000,000              | 362,757                       | 0.53625%             
|Total                   |                    | 5,700,000              | 689,238                       |                      

- TZF Jiangsu

As at March 31, 2002, TZF Jiangsu has bank loans, as follows, secured by its assets:

|                                              | Period of Loan    | Principal

Chinese
RMB | Principal

Equivalent to
US $ | Interest
Rate/Monthly
|--------------------------------------------- | ----------------- | ---------------------- | ----------------------------- | ---------------------
|Industries and Commerce
Bank of Jianhu, China | 6/30/01 - 6/30/02 | 9,060,000              | 1,095,526                     | 0.63375%             

Management of the company proposes to apply for renewal of these loans prior to their due date.

- Summary of Bank loans

|                                       | Tian'an   | TZF Jiangsu | Total     
|-------------------------------------- | --------- | ----------- | ----------
|Bank of China Xiamen Branch            | $ 326,481 | $           | $ 326,481 
|Industries and Commerce Bank of Jianhu |           | 1,095,526   | 1,095,526 
|China Construction Bank                | 362,757   |             | 362,757   
|Total                                  | $ 689,238 | $1,095,526  | $1,784,764

Note 18.  LONG-TERM LIABILITIES

a)	The long-term debt of $254,219 represents long-term accounts payable owing by Second
Pharmacy.

b)	The deferred liabilities for pensions applies to Tianan.  This is a provision for pension
liabilities.

Note 19.  CAPITAL STOCK

a)	Authorized:  100,000,000 common shares with a par value of $0.0001 each per share.

b)	Issued and outstanding common shares as at March 31, 2002 are as follows:

|                                  | Issued
Date | Number of
Shares | Par
Value | Additional
Paid-in
Capital | Total      
|--------------------------------- | ----------- | ---------------- | --------- | -------------------------- | -----------
|Private placement                 | 9/25/98     | 1,000,000        | $1,000    | $1,500                     | $2,500     
|**Balance**                       | 12/31/98    | 1,000,000        | 1,000     | 1,500                      | 2,500      
|Private placement                 | 2/17/99     | 600,000          | 600       | 59,400                     | 60,000     
|**Balance**                       | 12/31/99    | 1,600,000        | 1,600     | 60,900                     | 62,500     
|Cancellation of common
stock      | 4/30/00     | (1,000,000)      | (1,000)   | 1,000                      |            
|**Balance, before forward
split** | 4/30/00     | 600,000          | $600      | $61,900                    | $62,500    
|10:1 forward split                | 5/15/00     | 6,000,000        | 600       | 61,900                     | 62,500     
|Issuance of stock for
services    | 5/15/00     | 250,000          | 25        | 252,375                    | 252,400    
|Acquisition of the BC
Company     | 5/15/00     | 18,451,843       | 1,845     | 5,351,087                  | 5,352,932  
|Issuance for cash                 | 7/4/00      | 340,000          | 34        | 343,216                    | 343,250    
|Issuance for cash                 | 9/30/00     | 615,466          | 62        | 621,286                    | 621,348    
|Issuance for cash                 | 10/19/00    | 10,000           | 1         | 10,999                     | 11,000     
|Issuance for cash                 | 11/19/00    | 230,000          | 23        | 252,977                    | 253,000    
|Issuance for debt                 | 12/28/00    | 10,000,000       | 1,000     | 4,999,000                  | 5,000,000  
|Negative goodwill                 | 12/31/00    |                  |           | 3,333,103                  | 3,333,103  
|Capital contributed               | 1/1/01      |                  |           | 177,946                    | 177,946    
|Capital contribution
adjustment   | 12/31/01    |                  |           | (158,505)                  | (158,505)  
|Cancellation of common
stock      | 12/31/01    | (398,804)        | (40)      | (406,394)                  | (406,394)  
|**Balance**                       | 12/31/01    | 35,498,505       | $ 3,550   | $14,838,990                | $14,842,540

c)	Outstanding Warrants at March 31, 2002

290,007  warrants to purchase 290,007 common shares exercisable at CAD$1.50 per share until
December 17, 2001 (expired and subsequently extended, see note 30)

10,000,000	warrants to purchase 10,000,000 common shares exercisable at CAD$2.50 per
shares until December 28, 2002.

10,290,007

Note 20.  INCOME TAXES

a)	The most recent Federal Income Tax filing for the Company for the US was for he year
ended December 31, 2000, disclosing no income taxes payable to the US Internal Revenue
Service.

b)	The BC Company has filed Federal Income Tax Returns for the years ended December
31, 1999 and 2000.  To December 31, 2000, the BC Company had a total loss of CAD$482,634
(equivalent to US$321,756).  No provision for Canadian Income Taxes is provided for in these
consolidated financial statements as the profit is reduced by the losses brought forward and other
costs of the Company.

Note 21.  FINANCIAL INSTUMENTS

The Company's financial instruments consist of cash and cash equivalents, accounts receivable,
prepaid expenses and deposits, inventories, bank loans, accounts payable and accrued, balances
due to related parties and long-term liabilities.  It is management's opinion that the Company is
not exposed to significant interest, currency or credit risks arising from these financial
instruments.  The fair value of these financial statements approximates their carrying values.

Note 22.  LEASE OBLIGATIONS

a)Canon Copier (NP-3825) Lease

On October 1, 1999, the Company entered into a 48 month lease with Dominion Technologies
for a Canon Copier to be used by the Company.  Lease payments are expensed as they are
incurred.  Lease obligations are as follows:

|2002 | CAD$  1,327 
|---- | ------------
|2003 | CAD$     995

b) 	Computer Lease

On October 1, 1999, the Company entered into a 36 month lease with Dominion Technologies
for computer equipment to be used by the Company.  Lease payments are expensed as they are
incurred.  Lease obligations are as follows:

|2002 | CAD$2,210
|---- | ---------

c)	Vehicle Leases

On July 29, 1999, the Company entered into a 36 month lease with Mercedes-Benz Credit of
Canada Inc. for two vehicles to be used by the Company.  Lease payments are expensed as they
are incurred.  Lease obligations are as follows:

|2002 | CAD$     12,207
|---- | ---------------

- Lease of Premises

The Company entered into a lease for offices on April 26, 1999 with Omnia Overseas Trading
Ltd. for three years for monthly rent and costs of CAD$3,133.51, that commenced on July 1,
1999.

The first and the last months rent of CAD$6,631.15 is due at the time of signing.  This amount
has been paid and is recorded as prepaid expense and deposit as at March 31, 2002.

Summary of lease obligations

|Year | CDN$    | Equivalent US$
|---- | ------- | --------------
|2002 | $34,545 | $23,250       
|2003 | 995     | 670           
|     | $35,540 | $23,920       

These lease payments are not capitalized, but are expensed as they are incurred.

Note 23.  PENSION AND EMPLOYMENT LIABILITIES

The Company has liabilities which are deferred as at March 31, 2002, for pension, post-employment benefits or post-retirement benefits in Tianan in the amount of $212,562.  This
liability is unchanged from March 31, 2002.  The parent company and other subsidiary
companies, (except for Tianan) do not have any liabilities for pensions and related costs.

Note 24.  DISTRIBUTORSHIP AGREEMENTS

The Company and/or its subsidiaries enter into various distributorship agreements with
independent third parties to market products of the Company and its subsidiaries.

Note 25.  LAWSUITS

Expediter Sales Ltd. ("Expediter") v. the BC Company

There is a claim filed against the BC Company by Expediter alleging a breach of contract and
misrepresentation.  Expediter is seeking damages for alleged loss of profits, loss of business and
goodwill, misrepresentation, set-up expenses and the alleged wrongful use of Expediter's name,
and an injunction to prevent the BC Company from selling an herbal tea in Canada.  The BC
Company terminated the contract of Expediter for non-performance and has, accordingly,
counterclaimed against Expediter for outstanding debts unpaid by Expediter.  No provision has
been made in these financial statements for any potential costs or contingent assets relating to this
matter as the results of the claim and counterclaim are not determinable at this time.

Note 26.  SALES IN CANADA

The Company maintains a products analysis and quality control system in Canada, for its products
to be distributed, in order to ensure that its products conform to relevant regulatory and health
requirements.  Where any products are found not to meet the regulatory requirements, the
Company will immediately take such measures as necessary, or cause such measures to be taken,
so that the said regulatory requirements are complied with.

Note 27.  REVENUES OF ACQUISITIONS

The Company has acquired four subsidiary companies and they are recorded as a purchase.
Operating figures of these acquisitions are disclosed from the date of acquisition.  Details of the
operating figures for the Company and the four subsidiary companies for the three months ended
March 31, 2002, extracted from the applicable financial statements of those companies, are as
follows:

|                           | TZF US
Company | The BC
Company | Tian'an   | TZF
Jiangsu | Shenzhen
TZF Net | Total     
|-------------------------- | -------------- | -------------- | --------- | ----------- | ---------------- | ----------
|Revenue                    |                |                |           |             |                  |           
|Sales                      | $              | $              | $ 160,146 | $ 877,376   | $  11,228        | $1,048,750
|Cost of sales              |                |                | 71,258    | 613,376     | 11,465           | 696,099   
|Gross profit               |                |                | 88,888    | 264,000     | (237)            | 352,651   
|Other income               |                | 7,551          | 3,825     |             |                  | 11,376    
|                           |                | 7,551          | 92,713    | 264,000     | (237)            | 364,027   
|Selling
expenses           |                |                | 23,764    | 76,727      | 9,703            | 110,194   
|Administrative
costs       |                | 54,397         | 14,654    | 53,624      | 22,622           | 145,297   
|Depreciation               |                | 3,408          | 37,019    | 38,871      | 8,497            | 87,765    
|                           |                | 57,805         | 75,437    | 169,222     | 40,822           | 343,286   
|Profit before
income taxes |                | (50,254)       | 17,276    | 94,778      | (41,059)         | 20,741    
|Income taxes               |                |                | 37,142    |             | 46,922           | 84,064    
|Net profit for
the period  | $              | $ (50,254)     | $ 17,276  | $94,778     | $(41,059)        | $ 20,741  

Refer to note 1, showing reconciliation of operations of Shenzhen TZF Net due to cancellation of
proposed acquisition of Hengkang Pharmaceutical Company.

Note 28  DISTRIBUTION AGREEMENTS

a)	By agreement dated December 15, 2000, effective January 1, 2001, Trophic Canada Ltd. ("the
Supplier"), granted TZF International Investments, Inc. ("TZF") the exclusive right to promote,
distribute, and sell the supplier's products within the "Territory" of China, which includes Hong
Kong, SAR, for a period of five years.  Continuation of this exclusive right is continent upon
meeting or exceeding the purchase of products for a minimum of CAD$50,000 within the first
distribution year, a minimum of CAD$200,000 within the second distribution year, and increases
of approximately 20% in each of the subsequent distribution years.

The supplier may terminate the distribution agreement if TZF breaches any terms of the
agreement, including but not restricted to the annual sales requirements, if any breaches are not
remedied within three months after written notice.

TZF cannot assign the agreement or subcontract its obligations under the agreement without the
consent in writing of the supplier.  The supplier is an arms length party unrelated to TZF.

b)	By agreement dated June 22, 2001, effective June 22, 2001, Puresource Inc. ("the Supplier")
granted TZF International Investments, Inc. ("TZF") the exclusive right to promote, distribute,
and sell the supplier's products within the "Territory" of China, which includes Hong Kong, SAR,
for a period of five years.  Continuation of this exclusive right is continent upon meeting or
exceeding the purchase of products for a minimum of US$20,000 within 12 months after the
initial Product has been approved for sale in the Territory by the appropriate Government
department.

The supplier may terminate the distribution agreement if TZF breaches any terms of the
agreement, including but not restricted to the annual sales requirements, if any breaches are not
remedied within 45 days after written notice.

This agreement shall be renewed for additional successive renewal periods of five year terms
upon written notice by either of the parties, delivered at lease 60 days prior to the expiration of
the preceding period and in any case the Distributor will always have the first choice of renewal.

c)	By agreement dated July 25, 2001 effective July 25, 2001, Flora Manufacturing and
Distributing Ltd. ("the Supplier"), granted TZF International Investments, Inc. ("TZF") the
exclusive right to promote, distribute, and sell the supplier's products within the "Territory" of
the Peoples' Republic of China (excluding Hong Kong and Macao) for a period of three years.
Continuation of this exclusive right is continent upon meeting or exceeding the purchase of
products for a minimum of US$50,000 within 12 months after the initial Product has been
approved for sale in the Territory by the appropriate government department and in the next two
years thereafter or US$200,000 in the second year and US$400,000 in the third year.

The supplier may terminate the distribution agreement if TZF breaches any terms of the
agreement, including but not restricted to the annual sales requirements, if any breaches are not
remedied within three months after written notice.

This agreement shall be renewed for additional successive renewal periods of three year terms
upon written notice by either of the parties, delivered at least 60 days prior to the expiration of the
preceding period and, in any case, the Distributor will always have the first choice of renewal.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward Looking Statements.

Certain statements in this report, including statements in the following discussion which are
not statements of historical fact, are what are known as "forward looking statements,"which are
basically statements about the future, and which for that reason, involve risk and uncertainty,
since no one can accurately predict the future.  Words such as "plans," "intends," "will," "hopes,"
"seeks," "anticipates," "expects," "goal" and "objective" often identify such forward looking
statements, but are not the only indication that a statement is a forward looking statement.  Such
forward looking statements include statements of our plans and objectives with respect to the
present and future operations of the Company, and statements which express or imply that such
present and future operations will or may produce revenues, income or profits.  Numerous factors
and future events could cause the Company to change such plans and objectives, or fail to
successfully implement such plans or achieve such objectives, or cause such present and future
operations to fail to produce revenues, income or profits.  Therefore, the reader is advised that the
following discussion should be considered in light of the discussion of risks and other factors
contained in this Form 10QSB and in the Company's other filings with the Securities and
Exchange Commission, and that no statements contained in the following discussion or in this
Form 10QSB should be construed as a guarantee or assurance of future performance or future
results.

General.  In the fiscal year ended December 31, 2001, the Company began the process of
consolidating and reorganizing the business of the various subsidiaries it acquired in late 2000.
During the fiscal year ended December 31, 2001, the Company deeply studied the existing
operations of each of its subsidiaries, including, all aspects of productions, marketing and sales
and focused efforts on reorganizing those operations.  Primarily as a result of its focus on
reorganization efforts, overall sales and profits for the fiscal year ended December 31, 2001 were
significantly lower than results for the preceding fiscal year.  However, management has modified
its business plan to focus more of its efforts on marketing, and believes that financial results will
begin to show improvement during the fiscal year ended December 31, 2002.  The expected
improvement in financial results was not evident in the financial results for the first quarter of the
2002 fiscal year, and as a result, the Company's overall financial condition did not improve during
the period.

During the period, the Company had revenues of $1,048,750, and a net profit before taxes of
$20,741, as compared to revenues of $1,286,546 and a net profit of $229,872 during the first
quarter of the previous fiscal year.   Total current assets were $8,596,729 as of the end of the
quarter and were essentially unchanged from total current assets of $8,590,515 as of the end of
the fiscal year.  However, the composition of total current assets changed.   Cash on hand declined
from $437,409 as of the end of the fiscal year to $389,436 as of the end of the first quarter and
accounts receivable declined from $4,069,810 as of the end of the fiscal year to $3,862,582 as of
the end of the first quarter.  However, prepaid expenses increased during the quarter from
$2,093,425 to $2,227,110, and inventories increased from $1,989,871 to $2,117,601.

The results of operations of the parent company and each of the subsidiaries for the first
quarter of 2002 are outlined below:

TZF International Investments, Inc.  TZF International Investments, Inc., is the parent
company.   On July 25, 2001, the Company entered into an agreement with Flora Manufacturing
and Distributing Ltd. which granted the Company the exclusive right to promote, distribute, and
sell the supplier's products within China (excluding Hong Kong and Macau) for a period of three
(3) years, subject to certain sales volume conditions. Continuation of the exclusive right is
continent upon the ability of the Company to meet or exceed certain minimum purchase quotas.
In order to maintain its exclusivity, the Company must purchase a minimum of US$50,000 of
products within 12 months after the initial Product has been approved for sale in the designated
territory.  The quota is US$200,000  in the second year and US$400,000 in the third year.

On June 22, 2001 the Company signed a distribution agreement with Puresource pursuant to
which the Company has the exclusive rights to distribute the Puresource's products in China and
Hong Kong.  The Company intends to seek to become the largest distributor of Canadian health
products into China.  Puresource is Canada's leading health products wholesaler and broker,
founded in 1989.  Puresource delivers Canadians over 4500 brand name health products  through
an extensive network of dedicated health food retailers located from coast to coast. Puresource
offers a broad range of products covering herbal, nutritional and sport supplements, herbal and
medicinal teas, homeopathics, personal care products, non-dairy beverages and energy bars.
Leading manufacturers represented by Puresource include; Herbal Select, Now Foods, Nonu
International, Select Teas, Uncle Lee's Tea, Algonquin Tea Company, Homeocan, Natra-Bio,
Naturade, Tea Tree Therapy, Rachel Perry, Imagine Foods, Pacific Foods, Vitasoy, Peak Bar, Clif
Bar, Balance Foods and PowerBar.

During the fiscal year ended December 31, 2001, the parent company had separate sales of
$146,234 and net profits of $27,391, as compared to 0 revenue and a net loss of $300,962 during
the fiscal year ended December 31, 2000.   For the first quarter of the 2002 fiscal year, this entity
had no separate revenues or expenses.

T.Z.F. International Medical (Xiamen) Co. Ltd.	In the fiscal year ending December 31,
2001,  this subsidiary company maintained the existing market for the products of this subsidiary
and began the process of developing new markets.  As part of this process, this company changed
some existing sales policies and set up a more suitable sales network. At same time, the company
focused on cost controls and new product research and development.  It completed the second
stage testing of its LingLong product, which it hopes to have available for distribution during the
fiscal year ending December 31, 2001.

During the fiscal year ended December 31, 2001, this subsidiary had sales revenue of
$1,160,518, and a net profit from operations of $206,032, as compared to sales revenue of
$1,251,866 and a net profit of $359,041 during the fiscal year ended December 31, 2000.   During
the first quarter of the 2002 fiscal year, this subsidiary had revenues of $160,146 and a net profit
before taxes of $17,276, as compared to revenues of $246,175 and a net profit before taxes of
$70,310 for the first quarter of the previous fiscal year.

T.Z.F. International Herbs (Jiangsu) Co. Ltd.	In April of 2001, this subsidiary acquired a
license from the government of Jiangsu province for production of pills, capsules and syrups.  The
injection production line of this subsidiary also received GMP approval from both the Jiangsu
province government and from the national government of China.  Sales of injection product
represent approximately 60% of total sales of this subsidiary.  During the fiscal year ended
December 31, 2001, this subsidiary company evaluated its product costs and elected to lower its
prices in order to increase its market size.  This subsidiary is also in the process of seeking new
products for production and sale.

Revenue of this subsidiary during the first half of the fiscal year ended December 31, 2001,
was decreased compared as the first half of 2000.  The reason for the reduction was that during
the first half of 2001 this subsidiary moved its operations to a new facility and  concentrated on
obtaining GMP approval for its injection production line.   During the second half of the year, this
subsidiary increased its sales of injection products to almost 60,000 bottles per day, and as a
result, revenues during the second half of the year were substantially higher than during the first
half of the year.  Overall, for the fiscal year ended December 31, 2001, this subsidiary had sales
revenue of $1,621,745 and a net profit of $125,354, as compared to revenues of $3,637,046 and
a net profit of $1,407,119 during the fiscal year ended December 31, 2000.

During the first quarter of the 2002 fiscal year, the results of operation of this subsidiary
continued to improve.  It had revenues of $877,376 and a net profit before taxes of $94,778 for
the quarter, as compared to revenues of $240,972 and a net profit before taxes of $126,577 for the
first quarter of the previous fiscal year.

T.Z.F. (Shenzhen) Co., Ltd.	As the Company's headquarters in China,  T.Z.F. (Shenzhen)
(sometimes referred to herein as "Shenzhen TZF Net") reorganized its operations during the fiscal
year ended December 31, 2001 in order to improve its ability to manage the business of all the
subsidiaries in China.  This subsidiary has opened product counters southwest and central China
and plans to continue to expand its operations to include counters in the northeast and south, and
in the cities of Guangdong, Beijing and Shanghai.  This subsidiary has also focused efforts on
strengthening its product line and on attempting to locate some good local health products for
distribution on its counters.

The revenues and profits of this subsidiary for the fiscal year ended December 31, 2001 were
significantly less than anticipated for two reasons.  During the fourth quarter of 2001, this
subsidiary elected to cancel its acquisition of Hongkang Pharmaceutical Company because of
problems in obtaining approval of the acquisition from Chinese regulatory bodies.  As a result,
the financial results of Hongkang Pharmaceutical Company for the nine month period ended
September 30, 2001, which had previously been consolidated into the financial statements of
Shenzhen TZF Net, were reversed during the fourth quarter resulting in negative sales for the
fourth quarter (See Note 1 to the Financial Statements).  In addition, this subsidiary spent a
significant amount of time and money on establishing on the process of building and opening its
initial product counters.   Company management believes that these counters will begin to provide
positive returns prior to the end of 2002.

After eliminating the results of Hongkang Pharmaceutical Company from the financial results,
total revenues of this subsidiary for the fiscal year ended December 31, 2001, were $951,954 as
compared to total revenues of $1,347,541 for the fiscal year ended December 31, 2000.    For the
first quarter of the 2002 fiscal year, this subsidiary had revenues of $11,228 and a net loss of
$41,059.  Comparable results for the first quarter of 2001 are not available because the results for
that period included revenues from Hongkang Pharmaceutical Company.  As discussed above,
during the fourth quarter of 2001 the Company elected to cancel its acquisition of Hongkang
Pharmaceutical Company.  Accordingly, the reported results for the first quarter of 2002 do not
include any results of operation of Hongkang Pharmaceutical Company.

TZF International Herbs Co., Ltd.	On June 6, 2001, this subsidiary acquired the exclusive
distribution rights for the product named "Bitter Melon Powder" in North American.  This
subsidiary has applied to the Canadian government for the necessary permits to distribute this
product in Canada and has also begun initial efforts to develop a market for this product.

During the fiscal year ended December 31, 2001, this subsidiary had revenues of $1,233,791
and a net loss of $14,513, as compared to revenues of $1,633,897 and a net profit of $606,584 for
the fiscal year ended December 31, 2000.  During the first quarter of the 2002 fiscal year, this
subsidiary had no sales revenue and a net loss of $50,254, as compared to sales of $210 and a net
loss of $163,639 for the first quarter of 2001.

PART II

ITEM 1.	LEGAL PROCEEDINGS

Expediter Sales Ltd. ("Expediter") v. the BC Company

There is a claim filed against the BC Company by Expediter alleging a breach of contract and
misrepresentation.  Expediter is seeking damages for alleged loss of profits, loss of business and
goodwill, misrepresentation, set-up expenses and the alleged wrongful use of Expediter's name,
and an injunction to prevent the BC Company from selling an herbal tea in Canada.  The BC
Company terminated the contract of Expediter for non-performance and has, accordingly,
counterclaimed against Expediter for outstanding debts unpaid by Expediter.  No provision has
been made in these financial statements for any potential costs or contingent assets relating to this
matter as the results of the claim and counterclaim are not determinable at this time.

ITEM 2.  	CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  	DEFAULTS UPON SENIOR SECURITIES

None.

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

No matters were submitted to a vote of the security holders of the Company during the
third quarter ending March 31, 2002.

ITEM 5.	OTHER INFORMATION

None.

ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K.

There were no reports on Form 8-K filed during the quarter endedMarch 31, 2002.

******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.

**T.Z.F. INTERNATIONAL INVESTMENTS, INC.**

By:/S/ CHUNG YU

Chung Yu, President, Chief Executive Officer, and a Director

By: /S/ XIN CHEN

Xin Chen, Chairman of the Board

By: /S/ HONG LI

Hong Li, a Director

By: /S/ CHUN SHENG GUO

Chun Sheng Guo, a Director

By: /S/ QING LIU

Qing Liu, Vice President and a Director

Date:	May 21, 2002